EDITORIAL – Weakened competitiveness

The latest Global Competitiveness Report prepared by the World Economic Forum should give urgency to the need for reforms in several sectors. As reported by WEF local partner Makati Business Club, the Philippines saw an eight-point drop in its ranking, placing 64th out of 141 economies from last year’s 56th place in the Global Competitiveness Index.

The Philippines suffered the biggest drop in terms of information and communications technology adoption, falling from 67th to 88th place. Because of last year’s inflation, the country’s ranking in macroeconomic stability also fell from 43rd to 55th place.

The lowest competitiveness ranking, however, was registered in the pillar of health, with the country placing 102nd. This was attributed to a decrease in the life expectancy from 67.6 years in 2018 to 65.6 years.

Globally, Singapore topped the Competitiveness Index, followed by the United States, Hong Kong, the Netherlands, Switzerland, Japan, Germany, Sweden, the United Kingdom and Denmark. Chad was ranked the least competitive state at 141st place.

The other pillars in the Global Competitiveness Index are institutions, infrastructure, skills, product market, labor market, financial system, market size, business dynamism and innovation capability.

Among members of the Association of Southeast Asian Nations, the rankings tracked levels of economic development, with Singapore again at the top. Malaysia placed 27th, Thailand 40th, Indonesia 50th and Brunei 56th. The Philippines, placing sixth in ASEAN, was just ahead of Vietnam, which is fast catching up at 67th place; Cambodia, which placed 106th, and Lao PDR at 113th. Myanmar was not included.

The rankings are the latest validation of the country’s progressive slip from becoming an economic leader in Asia over half a century ago to middling status. Vietnam is close on the Philippines’ heels. Without much-needed reforms, the Philippines could slip further down the competitiveness ranks.