Thailand
Philippines global competitiveness ranking worst in five years
MANILA, Philippines — The Philippines slipped seven notches in the global competitiveness ranking, the sharpest drop in Asia-Pacific and its poorest performance over the last five years, as the country’s mediocre pandemic response led to an economic deterioration, the worst in several decades.
Based on the World Competitiveness Ranking 2021 of Switzerland-based Institute for Management Development (IMD), the Philippines ranked 52nd out of 64 countries based on prosperity and competitiveness.
Last year, the Philippines ranked 45th. The 2021 ranking is the country’s worst performance since 2017.
In Asia-Pacific, the Philippines placed 13th out of 14 economies covered by the report. It also recorded the sharpest decline in the region.
The Philippines lagged behind Singapore, Hong Kong, Taiwan, China, New Zealand, Australia, South Korea, Malaysia, Thailand, Japan, Indonesia and India, but stayed ahead of Mongolia.
The ranking was measured by four main factors namely, economic performance, government efficiency, business efficiency and infrastructure.
In an email exchange with The STAR, IMD World Competitiveness Center senior economist José Caballero said the sharp decline for the Philippines was driven by a deterioration in several indicators related to the domestic economy.
“The unemployment rate doubled from around five percent to more than 10 percent,” Caballero said.
The imposition of lockdown measures caused a steep fall in employment in the country as businesses either reduced operations or completely shut down. And even as the economy reopened, job rates have yet to fully improve.
“Those economies that provide a strong social net including unemployment benefits have bounced back quicker. Some economies have provided this over many years, while others have stepped up for the short term,” Caballero said.
Based on the four main factors considered for the ranking, the Philippines slipped in all three except in infrastructure where it remained at 59th spot.
The Philippines saw the biggest decline in economic performance after it tumbled 13 notches to settle at 57th as the domestic economy severely suffered from the pandemic, causing massive unemployment and high prices of basic goods and services.
The Philippines also moved down three notches in government efficiency to 45th amid problems in institutional frameworks and public financing.
In terms of business efficiency, the country fell four spots to 37th due to labor market woes, productivity and efficiency, finance and management practices.
Moving forward, the Philippines is urged to ensure inclusive economic recovery and quickly revive business and consumer confidence, as well as control COVID-19 cases while implementing full vaccination rollout.
IMD said the country should also build resilient social infrastructure especially in health and education, sustain increased investments in physical and digital infrastructure and maintain fiscal health while adequately providing stimulus and support especially for vulnerable sectors.
Meanwhile, the top five ranked economies this year, in order, are Switzerland, Sweden, Denmark, the Netherlands and Singapore, which failed to maintain the top position it enjoyed for the last two years.
IMD said the top-performing economies are characterized by varying degrees of investment in innovation, diversified economic activities and supportive public policy.
Strength in these areas prior to the pandemic allowed these economies to address the economic implications of the crisis more effectively.
“The global trends seen in the rankings show the importance of innovation, digitalization of the economy, welfare benefits and social cohesion. Highly competitive countries have been able to tackle these challenges by strengthening their institutional and social frameworks,” IMD said.
It added that competitive economies succeeded in transitioning to a remote work routine while also allowing remote learning and addressing unemployment has been fundamental.
“Countries that ensure the effectiveness of key public spending, such as public finance, tax policy and business legislation, are seen as essential policies to relieve the pressure on the economies hit by COVID-19,” it said.
Source: https://www.philstar.com/business/2021/06/18/2106225/philippines-global-competitiveness-ranking-worst-five-years