The Philippines is fifth most competitive economy in Southeast Asia and 56th out of 140 economies worldwide, according to the latest Global Competitiveness Report published by the World Economic Forum.
With an overall score of 62.1 out of 100, the Philippines follows Singapore (83.5, 2nd), Malaysia (74.4, 25th), Thailand (67.5, 38th), and Indonesia (64.9, 45th.); overtaking four of its ASEAN peers, namely: Brunei Darussalam (61.4, 76th), Vietnam (58.1, 77th), Cambodia (50.2, 110th), and Lao PDR (49.3, 112th).
The GCR contained an assessment of the competitiveness landscape of countries based on several productivity indicators grouped under 12 key pillars—institutions, infrastructure, ICT adoption, macroeconomic stability, health, education and skills, product market, labor market, financial system, market size, business dynamism, and innovation capability.
Of these pillars, the Philippines excelled in the market and innovation ecosystem components, particularly on the following indicators: market size (32nd), labor market (36th), financial system (39th), and business dynamism (39th).
On the other hand, the country faces its biggest challenge with respect to the quality of its institutions which has a ranking of 101st, the lowest score among all pillars.
According to the WEF, public sector efficiency and the absence of corruption are critical determinants of institutional quality.
To improve the quality of services of Philippine public institutions, the government is taking the necessary steps to minimize, and ultimately eliminate, red tape and corruption in the bureaucracy. Among these are the implementation of the Anti-Red Tape Act and the Ease of Doing Business Act of 2018, the establishment of the National Identification System, and the launch of the PhilGEPS Virtual Store.
In addition, the government—through the initiative of Budget Secretary Benjamin Diokno—is pushing for the immediate passage of the Budget Modernization Bill.
The BMB aims to institutionalize an annual cash-based budgeting system, which limits incurring contractual obligations and disbursing payments, to goods delivered and services rendered and inspected within the fiscal year.
This means that contracts should be fully delivered by the end of the fiscal year, ensuring the prompt delivery of public goods and services.
This year’s GCR was generated using the new Global Competitiveness Index 4.0, which introduces emerging drivers of growth and productivity. It highlights human capital, innovation, resilience, and agility as “defining features of economic success in the Fourth Industrial Revolution.”
With the transition to a new competitiveness index, this year’s results are not directly comparable with previous years’ reports.
Nevertheless, applying the current measurements to 2017, the Philippines improved by 12 notches, the WEF noted.
The WEF further explains that competitiveness is relevant as “rising competitiveness means rising prosperity.” Competitive economies are those that are most likely to grow sustainably and inclusively, in the sense that everyone in society will benefit from the fruits of economic growth.