On the heels of robust GDP growth in the second quarter, there was another piece of good news the other day: the Philippines has improved by six notches in the latest global competitiveness index prepared by the World Economic Forum.
At 59th place among 148 economies, the country still has a lot of catching up to do, especially with its Southeast Asian neighbors Singapore, Malaysia, Brunei, Thailand and Indonesia. But the Philippines has sustained its improvement since 2010, when it ranked 85th. In the latest competitiveness report, the country also registered improvements in nine out of 12 pillars.
Among the areas that registered significant improvements were innovation, institutions and financial market development. Gains were also noted in the efficiency of the goods and labor markets, general infrastructure, health and primary education, technological readiness and market size.
The government, however, must pay close attention to the factors that continue to weigh on national competitiveness. The factors reflect the persistent concerns raised by those doing business in this country, which keep away job-generating investments and discourage inclusive growth.
Among the country’s worst scores were in areas related to ease of starting and operating a business, labor practices, protection for investors, and the quality of ports and air transport infrastructure. Education, from primary to higher levels, was also a problem area. Business costs of terrorism, crime and violence were also noted.
For the daang matuwid administration, a positive development is that for the first time since 2003, the latest WEF Executive Opinion Survey showed corruption being dislodged as the top problem for doing business in the Philippines. The newest top problem: inadequate infrastructure. This has been a long-running concern of investors in this country.
The sustained improvement in the Philippines’ competitiveness ranking is encouraging, but clearly there’s still a lot of work ahead. The weaknesses cited in the competitiveness report are not new. With less than three years left in his term, President Aquino needs to show more decisive action.