EDITORIAL - Poor competitiveness

Apart from the disappointing performance of Filipino 15-year-olds in a global assessment on creative thinking, the country also rated poorly in another study. In the 2024 World Competitiveness Ranking prepared by the Switzerland-based International Institute for Management Development or IMD, the Philippines saw its ranking unchanged, placing 52nd out of 67 economies.

The ranking means that for the seventh year, the Philippines also kept its dismal place at 13th out of 14 Asia-Pacific economies included in the IMD report.

Some quarters may find consolation in the thought that at least the ranking of the Philippines remained flat instead of falling. That’s cold comfort, however, when one considers how the country’s neighbors are faring better and rapidly leaving the Philippines behind. As in most other global studies, Singapore was ranked as the most competitive economy. It was followed by Switzerland, Denmark, Ireland and Hong Kong.

The rankings were based on 336 indicators divided under four categories: economic performance, government efficiency, business efficiency and infrastructure. The IMD said declines particularly in infrastructure, business efficiency and education pulled down Philippine competitiveness.

In terms of business efficiency, the biggest declines were in business legislation and transparency of public sector contracts. Also seeing declines were the labor market, finance, management practices, attitudes and values.

The infrastructure category covers basic and technological infrastructure, including reliable and affordable power and connectivity, roads and bridges, airports and seaports, plus the skills needed by industries. The inadequacies have long been raised by the business community, but improvements have been slow. As for the required skills and labor productivity, this is a function of education – a sector that has been in crisis for some time now, with the government failing to comprehend the seriousness of the problem.

Filipino 15-year-old students have performed badly in two international assessments for mathematics, science and reading comprehension. In the latest study, the Filipino students also ranked second to the last in creative thinking. The IMD study ranked the Philippines 55th in terms of total public expenditure on education, 60th in the quality of primary education, and 63rd in terms of pupil-teacher ratio in secondary education.

Reacting to the competitiveness ranking, government officials said infrastructure spending is being ramped up. The bigger challenge, which could take years to reverse, is the slide in the quality of the nation’s most precious resource – its people. At the core of human development is education. Other countries pour resources into education and innovation; Filipino 15-year-olds are bored by new ideas. This problem must be addressed like a national emergency if the government wants to improve Philippine competitiveness.