The Philippines has improved 12 places in the World Economic Forum’s (WEF) 2018 Global Competitiveness Report (GCR) to 56th place out of 140 economies.
The country’s score on airport and liner connectivity, however, slid along with efficiency of clearances. Road connectivity, on the other hand, remained the same from last year.
The quality of roads and efficiency of air transportation and sea port services improved.
This year’s GCR adopted a new index called the Global Competitiveness Index 4.0 (GCI 4.0), a “composite indicator” with 98 indicators distributed across 12 pillars.
GCI 4.0 derived its results from data providers such as the World Bank, World Trade Organization, International Air Transport Association (air connectivity), International Trade Centre (for tariffs), and the Executive Opinion Survey administered by WEF. The GCI 4.0 uses a “distance to frontier” (DTF) approach in which performance is evaluated against the frontier of 100.
As the new GCI cannot be compared with the old index, WEF adjusted the 2017 results in order to provide a reference point, and released a 2017 “backcast edition.” The Philippines’ performance improved as measured by its overall DTF score of 62.1 in the 2018 GCI versus 59.8 last year. The country also posted improvements in all pillars and maintained its good macroeconomy stability performance with a DTF score of 90.
The country’s rankings in the pillars are 101st in institutions, 101st in health, 92nd in infrastructure, 67th in ICT adoption, 67th in skills, 60th in product market, 43rd in macroeconomic stability, 39th in financial system, 39th in business dynamism, 36th in labor market, 32nd in market size, and 67th in innovation.
Trade Secretary Ramon Lopez noted the brand-new methodology of the GCI and supported the call for governments to address the factors that will fully capture the dynamics of the global economy in the Fourth Industrial Revolution, namely, resilience, agility, human capital, and innovation capability.
Under infrastructure, the country’s score for road connectivity remained at 22.5, while it improved for quality of roads at 42.2. For airport connectivity, the country’s score went down to 82.6, but up for efficiency of air transportation at 51.4. Liner shipping connectivity was down to a score of 25 but up to 43.9 for efficiency of seaport services. For efficiency of clearances, the score was down to 38.2.
“From day one, the Duterte Administration has worked on various reform initiatives to improve the country’s competitiveness. The recent positive performance in the refined GCI is a testament of the fruits of all of these reform initiatives, and we are gearing up for better,” said Lopez. “We are optimistic that with our ongoing reform initiatives with the enactment of the Ease of Doing Business/Efficient Government Act, and efforts to promote government technology, the country will move us further closer to the frontier,” said Lopez.
The report noted, however, that the Philippines, along with Nigeria, Yemen, South Africa, and Pakistan, is a country with notable problems in violence, crime or terrorism, and police unreliability.
One of the key findings of the report is that all economies could do better in certain areas. For example, while Singapore might be the most “future-ready” economy, Finland outdoes it for having a digitally skilled workforce.
And while low- and middle-income economies can leverage technology to jumpstart growth, the report emphasizes the importance of “old” developmental pillars, such as governance, infrastructure, and skills.
Worryingly, of the 140 economies surveyed, 117 still lagged behind for quality of institutions, which impacted their overall competitiveness.
There was also widespread weakness at mastering the innovation process, with 103 countries scoring lower than 50 in following through from idea generation to commercial product.
The top 10 most competitive economies are the United States, Singapore, Germany, Switzerland, Japan, Netherlands, Hong Kong, United Kingdom, Sweden, and Denmark.
