EDITORIAL - Challenge for the next administration

As the ninth anniversary of the second people power revolt came and went, the administration installed through EDSA II touted its accomplishments. Considering that the past nine years have been marked by constant political instability, the accomplishments can be deemed considerable. Last year, in the face of a global economic downturn, the Philippines managed to post modest growth, with the figure expected to improve this year.

Even when the country posted its highest growth since 1997, however, the government’s economic managers themselves admitted that the fruits of growth were not trickling down to the grassroots. The growth could not keep pace with population growth, corruption was siphoning away billions that could have been used for poverty alleviation and infrastructure improvement, and most of the country’s neighbors were doing better in attracting job-generating investments.

The 2010 Index of Economic Freedom attributed this to the Philippine government’s failure to liberalize the economy, and said the failure to attract more foreign investment in basic industries and infrastructure has contributed to the country’s continued “long slide from being one of Asia’s richest economies to being one of its poorest.”

The report, released on Wednesday by the Washington-based think-tank Heritage Foundation and The Wall Street Journal, ranked the Philippines 109th out of 183 countries in terms of economic freedom. The countries were rated in terms of freedom in labor, business, trade and investment; fiscal, monetary and financial freedom; property rights, government spending, and freedom from corruption. The Philippines garnered an overall score of 56.3 points, fractionally lower than in 2009, and was ranked 20th out of 41 countries in the Asia-Pacific. The report also noted that the Philippines relied heavily on overseas workers’ remittances, which reflected a lack of domestic economic dynamism. It noted the weakness of the judicial system, adding that organized crime is a serious problem.

The ranking in the index is consistent with other studies showing that the Philippines has been left behind by many of its neighbors in terms of competitiveness, level of foreign direct investments, and human development indicators.

Yesterday Malacañang defended the record of the Arroyo administration. The past nine years have indeed been marked by accomplishments. But seen in comparison with other countries, the Philippines has been outperformed by most of its neighbors. Making the country catch up is a challenge that will face the next administration.