Global competitiveness

The 2006 World Competitiveness Yearbook highlights the backwardness of the Philippines and at the same time provides a general outline of immediate reforms to be undertaken if we want to be more globally competitive.

Competitiveness is defined as “the degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets while simultaneously maintaining and expanding the real incomes of its people over the long term.”

The competitiveness indicators are economic performance, government efficiency, business efficiency and infrastructure. Out of 61 nations or economies, the Philippines ranked 49th.

The report noted the dismal economic performance of the Philippines. While the country boasts of having the best cost-of- living index, this is threatened by high consumer price inflation. Unemployment rate may be down this year since the government redefined what it means to be out of work but the percentage of the population which is actually employed remains low. Real Gross Domestic Product growth also declined.

The government was castigated for failing to curb bribery, corruption and inefficiency in providing services. The decision to increase the Value Added Tax rate was lauded but tax evasion still hampers business activity. Risk of political instability continues to be high as well as the meddling of politicians in public service. As expected, the country credit rating received a low score.

The Philippines is recognized for the flexibility and adaptability of its working people but an alarming number of skilled and well-educated professionals are leaving the country. Industrial disputes may be low but labor relations are not generally productive. Worker motivation is not high.

Value traded on stock markets is low. Investment risk is high.

The strong points of the country in the infrastructure indicator are the upsurge of high-tech exports as percentage of manufactured exports, high investment in telecommunications, cheap mobile telephone and internet costs and surprisingly, language skills are in fact meeting the needs of enterprises.

The weak points are inefficient distribution infrastructure of goods and services, inadequate energy infrastructure, low number of fixed telephone lines, computers per capita, internet users and broadband subscribers, small public (and private) expenditure on R&D, health and education, few published scientific articles and grave pollution problems.

The Philippines is challenged to make regulatory services more transparent, non-discriminatory and fair. Improving quality of basic education is encouraged to further promote human capital development. A coherent population policy is required. Lowering transaction costs can be achieved by improving distribution infrastructure and accelerating e-governance projects.

Competing with other nations is not just about the ability to speak and write good English. There should be significant improvements in the political, social, cultural and economic policies that determine the overall standing and prosperity of each society. Individuals must be able to expand their incomes in the long term. Therefore, making the Philippines a globally competitive economy demands effective leaders who have the vision, knowledge and concrete program to sustain economic growth, promote government efficiency and accountability, foster business efficiency, embark on a nationwide infrastructure improvement, and most importantly, improve the quality of living in the country.

Related entries:

Kamustahan sa EPZA. Hi-tech export, kawawang workers.
Labor as export. Lahat na lang umaalis.
Preserve mineral wealth. Inuubos ang ating yaman.



  1. Posted September 27, 2006 at 6:02 am | Permalink | Reply

    The administration boasts of economic growth while our country has 14.6 million out-of-school youth. The E-Vat is nothing but a kitty to augment government’s lavish lifestyle. P17B unaccounted spending, and it has the temerity to ask the Filipino to sacrifice while they splurge. Just imagine incurring a telephone bill of P4B, incredible.

  2. Posted September 27, 2006 at 2:23 pm | Permalink | Reply

    It might be useful also to point out that many of our resources are wasted down the drain due to enormous corruption of public funds when it could have been utilized for improvements in our economic infrastructures—Major Tom

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