PH competitiveness ranking up in 2022, but still lags behind Asia-Pacific peers

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Metro Manila (CNN Philippines, June 16) — The Philippines placed 48th among 63 countries in this year’s IMD World Competitiveness Ranking, up four notches from last year.

“I would say that the recovery of the economy was the most important aspect,” IMD World Competitiveness Center chief economist and head of operations Christos Cabolis told CNN Philippines’ The Final Word on Wednesday night.

The country’s economic performance, which is among the factors in the overall rank, climbed four spots to 53rd this year.

Gross domestic product expanded 8.3% in the first quarter of 2022, beating market expectations and breaching the 7.8% pace recorded in the last three months of 2021. Last year, the economy grew 5.7% — slightly above the government’s adjusted 5-5.5% target band.

Cabolis also pointed to “the increase in the international investments, the increase in many measures in employment,” which he said led to a positive sentiment among business leaders in the Philippines. These are factors under economic performance, which also cover international trade and prices.

The country rose three spots in government efficiency, placing 48th. This covers public finance, tax policy, institutional framework, business legislation, and societal framework.

It ranked 39th in business efficiency, up two notches year-on-year. Business efficiency tackles productivity and efficiency, the labor market, finance, management practices, and attitudes and values.

However, it fell two rungs in infrastructure, settling at 57th. This factor includes basic, technological, and scientific infrastructure along with education and health and environment.

Cabolis acknowledged that “a little bit” of time is needed to observe returns on education alongside health and environment, which he referred to as “very important” components of infrastructure.

While its overall global ranking improved, the Philippines still lagged behind its peers in the Asia-Pacific. It again placed 13th out of 14 economies in the region that are included in the ranking, a spot it has held since 2018.

Singapore ranked the highest again this year in Asia-Pacific, rising two places from 2021 to end at 3rd place globally.

Denmark bagged the top spot for the first time in the ranking’s 34-year history, dethroning Switzerland which fell to second place, due to what the WCC called a “sharp rise” in economic performance.

The 63 economies included in the ranking were chosen based on the availability of comparable international statistics and collaboration with local partner institutes.