Overshadowed by the various international events and the crusade against drugs and crime were the results of the Fourth Round of Cities and Municipalities Competitiveness Index (CMCI) in the Philippines. The results were released on July 14, at the Philippine International Convention Center (PICC). As it was in the past three years, the event drew audiences from the private business sector, national government agencies and local governments. This year the number of participating local government units (LGUs) has expanded to 1,389, from only 285 in 2013. The current number now represents about 85 percent of all local governments in the country. With this larger number and a longer time frame for assessment, the National Competitiveness Council (NCC) is now able to rank provinces, as well as award the most improved LGUs.
Competitiveness, as defined in the CMCI framework, follows Michael Porter’s perspective that it is based on location and the productivity that companies located there can achieve. Location is the source of resources of a governance unit, and productivity is how the governance unit uses these resources.
Hence, a location may have rich resources, but the existing productivity levels are low, implying that the resources are not being properly utilized. It is also possible that a location may not have quality resources, but the productivity is high due to the governance mechanism and the availability of necessities for business. In the CMCI, location and productivity are further broken down into three main pillars of economic dynamism, governance and infrastructure, with corresponding indicators for each. Indicators of economic dynamism generally look at the aspects of the amount and number of businesses and the number of jobs created; governance indicators look at the processes and times for local government to act on different priorities, including business permits; and infrastructure indicators look at the capacities of localities to absorb new investments and expansions. Along these contexts, competitiveness can be analyzed regardless of the governance unit from municipalities to countries. Similarly, the competitiveness of local governments can be aggregated to come up with provincial, regional and national competitiveness.
In the last four years of implementation, we have observed how local governments have taken the index seriously as a way of measuring their performance. It should be noted that the awards do not provide any monetary award for the winners. Yet, it continues to attract more LGUs every year. This last round already saw the participation of all cities in the country. It is likely that a 100-percent participation will be easily attained in the next two years.
Beyond the winners and the awards, the CMCI have actually realized the following key outcomes: a) Competitiveness database—The four years of implementation now provides the NCC with a database that can be used to analyze movements of productivity across different localities in the country. This should enable national planners to isolate out the laggards from the movers and juxtapose said information to identify potential government assistance. It will also help in designing the type of assistance that can be provided. In addition, regional development councils and provinces can also use the data for the same purpose at their governance levels; b) Data consciousness—One of the key elements of the index is the availability of data at the local level. Winners are those that have carefully improved their database-management system, either by making them electronic or by simply making them accessible and organized. This means that even if you have the best information about your locality but you have not organized and databased them, they will not be reflected in the rankings. This will make the locality lose points, as the ranking is based purely on the scores accumulated per indicator. No data means no score, and eventually a lower ranking.
The complaint of some observers was that the winners do not “look” competitive from their perspective. However, this is not a matter of observation but of availability of data. Past winners who have lower rankings in the later rounds have admitted that they have to consistently update their database and ensure that they have inputs to all the indicators required. If all the participating LGUs will have a consistent database of their own, maintain them and update them regularly, then the CMCI would have succeeded in starting a management revolution at the local government levels. For, indeed, we cannot manage what we cannot measure.
These have made every participating LGU a winner. By submitting themselves into this ranking, these LGUs are now in the right track of measuring their own economic growth; finding their own strength and weakness in using local resources; and be able to market their locality as an investment destination for both local and foreign investors. The full results of the 2016 CMCI can be accessed at https://www.competitive.org.ph/cmcindex.