MANILA, Philippines — The Philippines’ competitiveness improved in 2019 on the back of rosy economic performance last year and higher labor force, according to a research group of Switzerland-based business school International Institute for Management Development.
The Philippines ranked 46th out of 63 economies tracked in IMD’s 2019 competitiveness report. This was higher than the Southeast Asian country’s previous ranking of 50th place in 2018.
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Among 14 Asia-Pacific countries covered by the report, the Philippines placed at the 13th spot this year, unchanged from last year and just ahead of Mongolia and right behind India.
“This result was driven by a solid economic performance supported by sustained real [gross domestic product] growth (6.2% in 2018) and an increase in labour force and employment levels,” IMD said.
For its report, IMD said it evaluated “the extent to which a country fosters an environment where enterprises can achieve sustainable growth, generate jobs and, ultimately, increase welfare for its citizens.”
IMD looked into four factors — economic performance, infrastructure, government efficiency and business efficiency — in giving a final score for each country.
Broken down, the Philippines improved in the economic performance factor, placing 38th this year from 50th previously despite a decline in the international trade sub-factor. In terms of government efficiency, the Philippines climbed to 41th spot from 44th on the back of better institutional framework, business legislation and societal framework.
Under the business efficiency factor, the Philippines ranked 32nd from 38th mainly driven by better labor market and “attitudes and values.” Lastly, the Philippines jumped to 59th place from 60th in the infrastructure factor.
According to IMD, the Philippines needs to “speed up and sustain investments in physical infrastructure” and “sustain investor and consumer confidence.”
IMD then flagged the country’s “inadequate investment in human capital, poor digital competitiveness and future-readiness and persistent political risks.”
The rankings have been produced every year since 1989 by the IMD World Competitiveness Center.
This year, Singapore ranked as the world’s most competitive economy for the first time since 2010, knocking out the United States from the top spot to 3rd place amid higher fuel prices, weaker hi-tech exports and fluctuations in the value of the dollar.
Hong Kong held on to 2nd place, helped by a benign tax and business policy environment and access to business finance. Meanwhile, competitiveness across Europe struggled to gain ground this with most economies on the decline amid economic uncertainties.
“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity,” said IMD professor Arturo Bris.
“A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” Bris added.