As its rise in the Global Competitiveness Report shows, the economic conditions are improving. Still, many challenges remain.
In the World Economic Forum’s new Global Competitiveness Report just released last week, the Philippines continued its recent trend of rising in the rankings, moving up 10 spots from last year’s position and 20 from two years ago to 65. The Philippines is one of only two countries to improve their position in the rankings by 20 spots over the past two years and has now surpassed Vietnam, though it still lags behind Indonesia.
The rankings rely on a mix of hard data and surveys from top executives in the country to measure the perceived competitiveness of an economy on a weighted formula of 12 pillars of productivity and growth potential. The release of the rankings adds to the growing sentiment that the Philippine economy is preparing for lift-off.
Major Gains
The Philippines’ rise in the rankings has been fueled by improvements in the categories classified as basic requirements by the report: institutions, health and primary education, infrastructure, and macroeconomic environment. Large gains in public trust in institutions and improvements in the macroeconomic environment have been the two primary factors driving the Philippines rise in the ranks.
Trust in government officials and institutions has seen great progress since the beginning of the Aquino administration. Since campaigning on the slogan kung walang kurap, walang mahirap (if there’s no corruption, there will be no poverty), the administration has made a concerted effort over the past two years to strengthen transparency in budgeting processes, ensure competitive bidding in procurement, and reduce influence peddling within government agencies. The Department of Budget Management has strived to increase transparency by reducing lump sums in the budget, making the executive drafts of the national budget available to the public in spreadsheets, insisting on competitive bidding for projects, and avoiding unsolicited project proposals. Along with a more open procurement process, increased trust in government has enhanced the perception of secure property rights which has encouraged investment.
The other major factor behind the Philippines’ rise in the rankings has been its improved macroeconomic position. The savings rate as a percentage of GDP has been steadily increasing – from 2011 to 2012, the national savings rate increased from 20.1 percent to 24.6 percent. In the past two years, there has also been a reduction in budget deficits to a nearly balanced budget in the past year, and there has been a substantial decline in government debt-to-GDP, which is nearing 40%.
Photo Credit: Wikicommons
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its nice…all nations competing by its economic standings…….
Indonesian
Very impressive,
Congratulation to Filipinos, it's about time after all. being shared similar background against dictatorship in recent history and our both nations still struggling with corruption problems I can really appreciate the good news. And I believe both our countries have a very good chance to economically overlapping some of our neighbors in not so distance future.
VannDar
Well, whatever happens, the future of our country depemds on everyone of us, as a citizen of the (still rising) country. Because “unity makes a better country”. Our country depends on everyone of us. It depends on how we follow the rules, how we cooperate to their rules, and it also depends on what leader we choose.
Edwin the Thrid
One of the main reasons foreign firms don't invest in the Philippines is its leftist labor laws (regularization, continually rising minimum wage, difficulty/cost of firing workers, etc). Also there are just too d**m many holidays. The Christian ones were bad enough (in number) now for political correctness we add Muslim ones too. Productivity is incredibly low here – plenty of smart people, but they just don't or can't work productively (Spanish influence, yes, 100 years later – similar to Spanish influence in all their old colonies). What they should do is eliminate most of the bad leftist labor laws, limit the power of unions, and go to a gold-based currency. They should enforce private property rights strictly (Land Reform was a disaster, as it ALWAYS is – we went from net exporter of rice to major importer, due entirely to Land Reform). The biggest reason for no continued stagnation? Not corruption – it's RED TAPE – see "The Mystery of Capitalism" by Hernando de Soto – he came to Manila and studied the economy for several years. It takes MANY times as many steps to do business processes here (and people with outstretched palms at every step, getting in the way). The reforms listed in that book would help TREMENDOUSLY. Education is pathetic here too. Going to K-12 will help a lot, but you can have good schools without well educated teachers – that will take DECADES to fix. Perhaps free distance learning from other countries is the answer. Turn our schools into giant computer camps that can access foreign free distance learning – provide help with the assignments. People here are plenty smart to learn, if the material is available – IT IS NOW – online.
bw
Economic fundamentals don't lie. Foreign reverves and surplus balance of payments are good numbers. When leaders from France, Canada, New Zealand, the Scandianvian alliance recently visited Pinas it speaks volumes of what they think and feel about the country. The Philippine stock market has the highest return in Asia. The IMF lauds the country's fiscal position.
Maybe it is coincidence that Europe and North America are sick and its biggest global partners Japan and China to mention a few got infected. Corporations in the first world outsourced to Pinas so they could cut expenses become profitable. We get the economic windfall. Pinas is not a heavy exporter and the influx of money from BPO, OFW remittances + good governance of the Pnoy administration gave the country a lot of capital to build and grow internally. Our growth is strong but largely inclusive so it is not under threat by the European recession.
I am optimistic about Pinas, as long as good governance and the fight against corruption is institutionalized in both public and private sectors. We are starting to get recognized globally and I am damn proud of it. we will be the 12 largest global economy in 2050 according to HSBC economic forecast. I know we Pinoys have something good in us that will show in time. Those pundits and Marcos nuthuggers in this thread are the ones that stall our progress. I am sick and tired of these Marcos cocksuckers who know nothing but denigrate the new Filipino.Been here in Canada for 20 years now and quite successful but look forward to going home someday and be proud of my motherland.
Cebuano
I agree on your optimism. Before, I would rather have Cebu to be independent from the Philippines for I was somewhat ashamed of what the country had been doing in the past and I only made my impression on the island where I was born and I am still living in for most of my life.
But now, the country is dramatically transitioning itself from the past shame. It's time to move forward and improve the Philippines as a country. Cebu is part of the Philippines. I want to visit many islands and provinces in the country without having to go through the immigration office. The country has a lot to offer and thankfully, the improvement of the PH is eventually appearing with praises and recognition from many countries, economists and institutions. If we don't take regards these praises, we are as backwards as the minds of poor Filipinos.
It is time for Filipinos to show what they can do for their country. I am proud of what is happening in Cebu. I can see development changes for the good of many people.
If we continue to be cynical, then it is better for us to die than living in misery while failing to see the comfort around us.
And lastly, I'd prefer for federal form of government. This will enable the local government units to develop their constituents and local jurisdictions and make favorable improvements. The efforts of LGU's can then be recognized and the achievement will serve as benchmarks for other LGU's.
Although I didn't vote for PNoy, I can see the changes he has done for the country, something that has added my impression about him. I hope though that the Philippines would go on a sustainable path for long-term prosperity. We can't eradicate corruption but we can alleviate it on a level at par with Singapore's. And the infrastructure-building has been started to answer the sentiments of many Filipinos and tourists complaining about the ill-standard roads and gateway structures.
I have high hope for Philippines in 2020, hoping for the trillion-dollar mark in GNP and high human development index will be achieved. Perhaps in 2025 or 2030, we can attain first-world status. I pray (and work for it to happen).
Kristoffe
Yeah. and the chinese can't even vote. I would rather stay poor than not have the chance to vote.
danny
amongst the Asian countries, Philippines has something to be proud of, perhaps we're more democratic and free and tolerant. We're free to express what we want to express. Moreover, we can't be compared to China since China's economy is fuelled by slave labour, sweat shops etc. The working class there toils at least 14 hours a day of which unacceptable any of the world standards.
Kalipulako
Whose behind THE ASIA FOUNDATION?