EDITORIAL - Improving competitiveness

The Philippines continues to improve in competitiveness, according to the annual global index drawn up by the World Economic Forum. In the latest Global Competitiveness Report, the Philippines climbed seven notches to 52nd  out of 140 economies. The WEF noted that the country was among the biggest gainers, with reforms since 2010 paying off.

The Philippines, however, remains behind several of its Southeast Asian neighbors. Singapore, not surprisingly, ranked only behind Switzerland as the world’s most competitive economy. Malaysia, which improved by four notches, ranked 20th. Thailand climbed six places to 31st while Indonesia rose by four spots to 34th. That’s still a wide lead over 52nd  place. The Philippines did better than Vietnam, which was up by two spots at 68th.

Although the WEF cited the reforms implemented since 2010 for boosting the Philippines’ economic fundamentals, the government can look at the criteria for the rankings to see where there’s still a wide room for improvement.

The positive scores were on the economic pillars: macroeconomic environment, market size, business sophistication, financial market development, innovation, and technical readiness.

Despite improvements, the country’s scores were still middling in the institutions pillar, protection of property rights and government efficiency. In ethics and corruption, the country scored a low 81st. The security pillar was worse, with the country ranking 89th. It scored a mediocre 91st in both infrastructure and the labor market, and 110th in the cost that the threat of terrorism imposes on business.

The scores reflect observations made by business groups and other sectors on the reforms that must still be done to raise national competitiveness. Since 2010, the Philippines has improved by 33 notches in the annual competitiveness ranking. But other countries in the region also continue to improve. The goal for the Philippines should be not only to catch up with those ahead but also to overtake its better performing neighbors.