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Philippines improves ranking in WEF’s Inclusive Development Index
MANILA, Philippines — The Philippines advanced two notches in the 2018 Inclusive Development Index (IDI) of the World Economic Forum which measures the ability of advanced and emerging economies to foster inclusive growth and development.
The country now ranks 38th among 74 emerging economies for the 2018 index. Last year, the Philippines ranked 40th out of 79 emerging countries covered by the index.
Key performance indicators for the IDI include GDP per capita, labor productivity, median household income, income gini, adjusted net savings, dependency ratio, employment, healthy life expectancy, poverty rate, wealth gini, public wealth as a share of GDP and carbon intensity of GDP.
Policy and institutional indicators, meanwhile, include education and skills development, basic services and infrastructure, financial intermediation of real economy investment, asset building and entrepreneurship, and employment and labor compensation.
WEF noted in the report the limitations of the use of the gross domestic product (GDP) as a measure of socioeconomic progress as it does not directly reflect improvements in household standard of living.
“Most citizens evaluate their respective countries’ economic progress not by published GDP growth statistics but by changes in their households’ standard of living – a multidimensional phenomenon that encompasses income, employment opportunity, economic security, and quality of life,” the report said.
The Philippines received an IDI score of 3.83 and ranks close to Indonesia (3.95), Brazil (3.93) and Tunisia (3.82).
IDI scores are based on a scale of one to seven, with one as the lowest score.
The Philippines has maintained an average IDA score of 2.40 percent for the past five years and has been described by the report as “slowly advancing” in terms of ushering in inclusive growth and development.
WEF said the Philippines could make improvements on the equality of income opportunities.
“Turkey, Mexico, Indonesia and the Philippines are among economies which show potential on intergenerational equity and sustainability, but lack progress on inclusion indicators such as income and wealth inequality,” said the report.
Norway remained at the top of 30 advanced economies with an IDI score of 6.08. Following suit were Iceland, Luxembourg, Switzerland, Denmark, Sweden and the Netherlands.
At the top of the list for developing countries was Lithuania with an IDI score of 4.86 Following were Hungary, Azerbaijan, Latvia, Poland, Panama, and Croatia
At the bottom of the list for developing countries were Lesotho and Mozambique.
Socioeconomic Planning Secretary Ernesto Pernia said the administration’s Comprehensive Tax Reform Program (CTRP) which is planned to be implemented in four packages is meant to improve the distribution of wealth in the country.
The first package, the Tax Reform for Acceleration and Inclusion (TRAIN), which was implemented beginning this month provides for the lowering of personal income tax but imposes higher tax on fuel, automobiles, sugary beverages and tobacco.
Pernia expressed confidence that higher take-home pay would offset losses due to higher excise tax.
Source: http://www.philstar.com/business/2018/01/26/1781345/philippines-improves-ranking-wefs-inclusive-development-index