The country, caught in a failure-to-launch syndrome, is fully reflected in its global competitiveness ranking, which has hovered around 51st to 52nd place out of 69 nations ranked over the past three years.
In 2022, the ranking improved substantially to 48th place; however, since 2021, the Philippines has been ranked 13th, at the tail end among regional peers.
The Switzerland-based International Institute for Management Development’s (IMD) World Competitiveness Yearbook, released last month, showed that out of the five founding nations in the Association of Southeast Asian Nations (ASEAN), the Philippines ranked last.
Two of the country’s neighbors, Singapore and Hong Kong, ranked second and third, respectively, in a global ranking compiled from a survey of executives from multinational companies.
The report showed that Taiwan is sixth, China is 16th, Malaysia is 23rd, Thailand is 30th, and Indonesia is 40th.
In the Asia-Pacific ranking, the Philippines was only ahead of Mongolia.
The standard excuse of geopolitical turbulence for the economy’s failure to reach its potential becomes inapplicable, as the country’s neighbors are leapfrogging.
The IMD report indicated that the country is losing its competitive edge in the region, primarily due to business perceptions of inefficiency in the government.
In the category of governance, the country ranked 49th, which was an improvement from last year’s 51st. The report noted a marginal improvement in business legislation, attributed to the slight rise in ranking. Ratings on tax policy, institutional framework, and societal framework remained low, the report stated.
Another factor that constituted a hurdle to the country’s competitiveness is the slow infrastructure buildup.
Despite the so-called Build Better More program, the infrastructure buildup performance did not impress business leaders, who ranked the Philippines at 60th, up from 61st last year.
Executives identified social inequalities as the most troublesome issue in the Philippines, with 74.3 percent of respondents citing it as a significant concern.
The report also showed that 64.6 percent wanted the government to address the lack of economic opportunities.
“Emerging economies in particular are signaling a lack of economic opportunities; part of their ongoing struggle with deep-rooted economic issues such as inadequate infrastructure, weak institutions, and limited human capital,” according to the IMD report.
A substantial 85.1 percent of respondents also identified “political difference” as a potential source of trouble for the economy, with 85 percent of executives polled pointing to it as a significant issue in their investment decisions.
It is appalling that the country appears to be losing steam in the most dynamic region in terms of growth.
East Asia and Western Europe were highlighted in the IMD report as leading the world in overall economic competitiveness and institutional strength.
“Its shining lights are Hong Kong and Taiwan,” according to the report.
The Southern Asia and Pacific sub-region, comprising eight countries spanning from Thailand to New Zealand, experienced its first setback in the survey since 2022’s results.
“However, this masks stark divergences between countries in the region,” it added.
Simply put, the engines of development are sputtering in the Philippines, while its neighbors are steadily gaining pace in terms of progress.
It just proves that the strategy of distributing ayuda or doles to Filipinos, or ayudanomics, does not contribute to the goal of eradicating poverty or stimulating growth.