Philippines classified as lower middle income country

MANILA, Philippines - The Philippines has been classified as a lower middle income economy, based on a World Economic Forum (WEF) 2015 report.

The WEF’s Inclusive Growth and Development Report presents a new framework for assessing countries’ efforts to foster economic growth that raises the living standards of entire societies.

The rating was based on six pillars including education and skills, employment and labor compensation, asset building and entrepreneurship, financial intermediation of real economy investment, corruption and rents, basic services and infrastructure, and fiscal transfers.

The report covers 112 countries, wherein the Philippines was grouped with the lower half of the countries.

Overall, the top 10 advanced economies (based on average rankings) are: Australia, Canada, Denmark, Finland, Luxembourg, Netherlands, New Zealand, Norway, Singapore and Switzerland.

In the education and skills category, the leader is Finland; in term of employment and labor compensation, the leader is Norway.

In terms of asset building and entrepreneurship, Finland took top spot.  In terms of financial intermediation of real economy, the leader is Canada.

In terms of corruption and rents, the leader is Luxembourg, and in terms of basic service and infrastructure, the leader is Switzerland. The Netherlands was top in the fiscal transfer category.

WEF managing board member Rick Samans said the report offers policy-makers, business leaders and other stakeholders a clearer sense of the extent to which their country is exploiting the available policy space and best practices in relation to its peers.

“The report aims to make discussions about inequality, less about aspiration and more about concrete action,” Samans said.

Overall, several findings emerged from the report.

All countries have room for improvement. There is considerable diversity in performance not only across, but also within countries.

“It is possible to be pro-inclusiveness and pro-growth at the same time. This is demonstrated, for example, by the fact that several of the strongest performers in the Forum’s Global Competitiveness Index also have a relatively strong inclusive growth and development profile,” he added.

Meanwhile, effective promotion of social inclusion is not solely a luxury of high-income countries. In many sub-pillars – such as business and political ethics, financial system inclusion, and educational quality and equity – some developing countries do better than others with much higher incomes.

The report observed there are significant regional similarities. This suggests a strong role of shared culture, historical traditions or political-economy reflexes, in areas such as tax systems in Eastern Europe and educational equity in Latin America.