RP’s performance worst in the region–study

Competitiveness rankings put the Philippines at the bottom in terms of economic performance, government efficiency, and infrastructure

The Philippines has become the least competitive country in the Asia Pacific region, lagging behind its neighbors in economic performance, government efficiency, and infrastructure, the 2009 World Competitiveness Ranking showed.

The Philippines’ ranking also slid by 3 notches from 40 in 2008 to 43 in 2003 out of the 57 economies included in the World Competitiveness Yearbook (WCY).

“The Philippines is in the bottom among the 13 countries in Asia-Pacific region,” said Felipe Alfonso, interim president of the Asian Institute of Management, during the presentation of the results at the State of Philippine Competitiveness National Conference in Pasay City on Monday.
The 2009 World Competitiveness Scoreboard of the Swiss-based International Institute for Management Development uses four criteria in ranking the competitiveness of 57 economies. These are economic performance, government efficiency, business efficiency, and infrastructure. Each of the four criteria have sub-factors.

Asia Pacific countries that performed better than the Philippines included: Hong Kong (2nd), Singapore (3rd), Australia (7th), Qatar(14th), Japan (17th), Malaysia (18th), China (20th), and Taiwan (23rd). Thailand landed on the 26th spot, while Indonesia ended one notch higher than the Philippines at the 42nd spot.

Pre-crisis Data
“We have not been able to get out of the bottom third,” Alfonso added.
The rankings, however, did not include some Asian countries like Vietnam, Cambodia, Myanmar, Brunei, and Papua New Guinea. Kazakhstan and Qatar were included in the survey for the first time.

Leading the worldwide rankings are the United States, Hong Kong, Singapore, Switzerland, Denmark, Sweden, Australia, Canada, Finland and Netherlands.

Occupying the bottom spots are Venezuela, Ukraine, Argentina, Romania, Croatia, Greece, Colombia, Italy, Russia, South Africa, and Turkey.

“The results are largely based on data from early 2008. The effects of the global economic crisis came at different times so the rankings may not adequately reflect the impact of the crisis last year,” Alfonso said.

Weaknesses
Economic performance includes macroeconomic evaluation of the domestic economy, while government efficiency measures the conduciveness of government policies to competitiveness.
Meanwhile, business efficiency tackles whether the national environment encourages enterprise to perform, and infrastructure analyzes whether basic resources meet the needs of the business.
The Philippines ranked 51st in economic performance, 42nd in government efficiency, 32nd in business efficiency, and 56th in infrastructure.

“Our relative weaknesses are in international investment (56th), public finance (54th), business legislation (50th), productivity and efficiency (53rd), education (54th), basic infrastructure (57th), and scientific infrastructure (56th), Alfonso said.

Alfonso said that economic performance went down by 9 notches because of decline in exports in the fourth quarter of 2008, slump in direct investments, and the impact of high prices of oil and food last year.

“The Philippines is hit especially being the world’s largest rice importer,” he added.
Business Efficiency

Government efficiency, he added, declined because of continuous difficulty in ease of doing business, while the ranking in infrastructure went down because of high dependency ratio, lack of energy infrastructure, and issues affecting future energy supply.

“The Philippines has the worst distribution infrastructure in Asia,” Joseph Lim, a professor of economics at the Ateneo de Manila University, said. He added that the country has the worst water transport system along with India and Indonesia.

Lim said more taxes should be spent on infrastructure development and more projects should be placed in poorer communities and provinces. He added that there is also a need to address wastage in infrastructure due to corruption, kickbacks, and inefficiencies.

Among the four criteria, the Philippines got the highest score in business efficiency (32nd). The study identified high flexibility of workers as one of the strengths of the Philippines in this criterion.

“We performed relatively better in business efficiency,” Alfonso said, adding that the country should not be complacent as it continues to show low productivity and to have bad image in other countries.

Pupil-Teacher Ratio
The study also showed that the Philippines had the highest pupil-teacher ratio in secondary education among 57 countries, and second highest pupil-teacher ratio in primary schools. It also showed that the country, along with Indonesia, had the worst secondary enrolment rate among Asian countries.

“More quality schools in primary, secondary, and tertiary level will have to be built in poorer, more backward and congested areas,” said Ma. Lourdes Sereno, executive director of the AIM Policy Center.

“Increased incomes, higher employment, and lower poverty incidence are crucial to prevent dropouts from elementary and secondary enrolment and to encourage entry into tertiary schools,” she added. (Newsbreak)