EDITORIAL - Competing for investments

With economies reopening as Omicron-driven infections decelerate, competition is stiff in attracting investments that will create decent jobs. The Philippines needs to ramp up efforts in this area, as indicated in the 2022 Global Opportunity Index.

Drawn up by California-based nonprofit think tank Milken Institute, the latest index showed the Philippines slipping a notch to 83rd place out of 126 economies, from 82nd out of 145 in the previous year. Of 15 economies in East Asia-Pacific, the Philippines ranked a dismal 13th, ahead of only Cambodia and Laos, which placed 95th and 98th overall, respectively. Some of the 145 countries in the 2021 index were excluded due to insufficient data.

The rankings are based on 100 variables organized under five major categories and 14 sub-categories. They cover economic fundamentals, institutional framework, financial services, business perception, international standards and policy. The country placed lowest, at 95th, in institutional framework, or the extent by which institutions assist or hamper businesses.

In “emerging Southeast Asia,” the Philippines ranked far behind Malaysia, which placed 25th overall in providing opportunities for attracting foreign investors; Thailand, which placed 34th; Indonesia, 57th, and Vietnam, 67th.

In the past years, two laws have been passed to cut red tape and make it easier to do business in the Philippines, but the country continues to trail most of its neighbors as an investment destination. New developments may improve the situation, such as the passage of laws liberalizing retail trade and allowing 100 percent foreign ownership in more sectors. The law amending the Public Service Act is waiting for President Duterte’s signature.

More measures, however, are needed to draw significant levels of foreign investment. How countries manage the pandemic will also be a factor; those that recover quicker will be considered more efficient and consequently more attractive. Many analysts, however, see the Philippines emerging as the regional laggard in terms of pandemic recovery. The Global Opportunity Index is just the latest alarm bell ringing for urgent action on long-awaited reforms.