MANILA, Philippines – Despite soaring prices, the Philippines is the second cheapest place to live among 55 economies surveyed by a Swiss-based think tank.
However, despite the low cost of living and the relatively high gross domestic product (GDP) rate posted by the country, Filipinos’ purchasing power remains low, according to the Institute of Management Development (IMD) World Competitiveness Yearbook (WCY).
“It’s still cheapest to live in the Philippines,” Dr. Federico Macaranas, executive director of the Asian Institute of Management (AIM) Policy Center, said in a press conference yesterday. “(But) the purchasing power of the people did not increase. This reflects the maldistribution of income.”
The survey showed that the Philippines ranked 54 out of 55 in terms of GDP per capita.
The Philippines likewise lagged behind all other countries in terms of public spending in education.
The country ranked last in terms of the pupil-teacher ratio.
“The Constitution states that the highest share of government expenditure must go to education, but more is allotted toward the servicing of debt,” Macaranas said.
As such, the major challenge of the country is to pursue education policies that will in turn help develop a globally competitive work force, he added.
The Philippines has increased its level of competitiveness against other nations as it climbed five notches in the world competitiveness scoreboard.
The country ranked 40 out of 55 countries in the 2008 edition of the WCY, better than its 45th rank a year ago.
Out of a possible 100, the Philippines was given a 50.478, higher than the previous year’s 47.163 points.
Remarkable improvement was seen in the four competitiveness factors.
In terms of economic performance, the Philippines moved to 42 from 45, for government efficiency to 41 from 47, business efficiency to 31 from 39 and infrastructure to 48 from 51.
“It shows that the collaboration of the private and public sector in order to improve the country’s competitiveness is working,” said Ruy Moreno, National Competitiveness Council (NCC) director.
Moreno said the results will help bring more investments into the country.
“That is a natural effect,” he said. “In addition to foreign investments, the increased competitiveness will help domestic entrepreneurs in conducting their businesses.”
Moreno said for instance, the results showed that it is easier to do business in the country as red tape in business registration was reduced.
“This will have a multiplier effect because the underground economy will be minimized because it is easy to do business,” he said.
Moreno said the country is on track to meet its target of being in the top one third by 2010.
For the year, the NCC will be tackling the top ten business problems with bureaucracy, he added.
Moreno said the goal is to improve proficiency in English, science and mathematics by 10 percent.
To achieve these goals, the NCC will tap the various foreign chambers in the country, he added.
The IMD World Competitiveness Yearbook is the most reputable and comprehensive report on the competitiveness of nations published since 1989.
It judges competitiveness of 55 economies, based on 331 criteria.