EDITORIAL - Another slip in competitiveness

First, the good news: the country’s macroeconomic fundamentals are good, as many economists have pointed out, and the international community welcomes the implementation of unpopular but necessary fiscal reforms.

The bad news is not all that new, although it does not get less painful in the retelling: the country’s competitiveness has slipped again, this time as a business destination. This is according to the third annual report prepared by the World Bank and the International Finance Corp., which ranks 175 economies based on 10 indicators on the ease and cost of doing business. From 121st place last year, the Philippines slipped to 126th, just ahead of the West Bank and Gaza Strip.

That ranking may be unfair, but the 10 indicators in the "Doing Business" report do not include the security situation. Instead the indicators are the ease of starting a business, obtaining a business license, employing workers, registering property, getting credit, enforcing a contract, trading across borders, paying taxes, protecting investors and closing a business.

In most of the indicators, the Philippines performed way below expectations, with no significant improvements in cutting red tape, the World Bank said. The country ranked way behind its Southeast Asian neighbors Thailand, which placed 18th, Malaysia, which ranked 25th, and Singapore, which eased New Zealand out of the top spot as the best place in the world to do business.

Singapore, which has always been ranked among the world’s most efficient, transparent and business-friendly economies, is already too far ahead to serve as a model for the Philippines. The country should instead look to the year’s best performer, Georgia, which leaped from 75th place to 37th after implementing sweeping reforms that led to a 20 percent increase in business registrations.

The Philippines at least ranked ahead of India, which placed 134th, and Indonesia, rated 135th. But it’s the leaders that must be used as the benchmark. In a global economy, every country is competing for investments. Survival depends on national competitiveness – efficiency, the ease of doing business, transparency, the rule of law and the quality of the workforce. Many quarters have pointed out the problems that are making the country lose its competitiveness. The World Bank study is another reminder that reforms cannot wait.