Philippines drops to 80th in economic freedom index

MANILA, Philippines — The Philippine economy remained “moderately free” even as the country dropped seven spots in the latest economic freedom index by Washington-based think tank The Heritage Foundation.

From 73rd last year, the country dropped to 80th out of 177 countries included in the 2022 index, which measures economic freedom based on 12 factors grouped into four broad categories.

These include rule of law (property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business freedom, labor freedom, monetary freedom) and open markets (trade freedom, investment freedom, financial freedom).

The Philippines was ranked 15th among 39 countries in the Asia-Pacific region, and sixth among Southeast Asian nations after Singapore (1st globally), Malaysia (42nd), Brunei (62nd), Indonesia (63rd) and Thailand (70th).

The Philippines obtained an overall score of 61.1 out of 100, down three points from last year.

Its scores improved in all three factors under regulatory efficiency, while it dropped in all three under rule of law.

The country’s scores also dropped in government spending, fiscal health and trade freedom, while it remained the same in tax burden, investment freedom and financial freedom.

“Economic growth in the Philippines slowed from 2017 through 2019, turned negative in 2020 and rebounded in 2021. Over the same five-year period, economic freedom has slipped,” read the report.

“Dragged down by decreased scores for fiscal health and monetary freedom, the Philippines has recorded a 4.5-point overall loss of economic freedom since 2017 and has fallen to the bottom ranks of the ‘Moderately Free’ countries. The tax burden is not heavy and trade freedom is a bright spot, but judicial effectiveness and government integrity exhibit weaknesses,” it added.

Most data used in the 2022 index covered the second half of 2020 through the first half of 2021, the index said.