2019 Philippines WEF Global Competitiveness: Dissecting The Positive and Negative Factors

This country is certainly not a bed of roses. But neither is it entirely a bed of thorns. The latest World Economic Forum (WEF) Global Competitiveness Report 2019 was not positive of the Philippines as it slides eight notches lower to the 64th place out of 141 countries from the 56th spot out of 140 countries in 2018. But there are factors and aspects where we ranked high.

There are four major areas with sub-criteria, namely enabling environment (institutions, infrastructure, ICT adoption,  macroeconomic stability), human capital (health and skills), markets (product market, labor market, financial system, and market size) and innovation ecosystem (business dynamism and innovation capability).

Under enabling environment, we jumped up 20 notches from 101st to 87 for institutions but moved down 4 notches from 92nd to 96th for infrastructure, 12notches for macroeconomic stability from 43rd in 2018 to 55th. Our biggest drop is in ICT adoption where we are 88th currently from 67th. This criterion includes mobile-cellular telephone subscriptions, mobile-broadband subscriptions, fixed-broadband internet subscriptions and fiber Internet subscriptions all pe 100 population and percentage of Internet users of adult population.

For human capital, we have gone further down from 101st in 2018 to 102nd of 141 countries this year. But we remained at 67th in terms of skills. We have posted an increase in markets, particularly in product market from 60th to 52nd, and market size from 32nd to 31st this year. But we went down from 36th to 39th this year for labor market and 39th to 43rd for financial system.

Looking at all the 12 criteria which falls under the four areas, the Philippines may have scored higher than the average among lower-middle income countries, but we are below average the East Asia and Pacific group. This means we may not have slowed down but all our neighbors picked up the pace.

Looking at the factors under each of the criteria (there are over a hundred factors) – it is noteworthy to take a look at the areas where the Philippines is among the Top 40 countries to understand our strengths and to know what we have been doing right so we can keep on doing them. It is also important to identify where we have performed badly or to see the areas where the Philippines joined the bottom 40 countries.

Here is the list of sub-criteria and our rank in that area, starting with where we did well.

THE PHILIPPINES IN THE TOP 40 COUNTRIES IN THESE ASPECTS

RankIndicators
7Internal labour mobility
9Insolvency regulatory framework
9Diversity of workforce 
10Companies embracing disruptive ideas
19Environment-related treaties in force
19Budget transparency
19E-Participation
26Airport connectivity
33Social capital
39Energy efficiency regulation
36Environment-related treaties in force
35Meritocracy and incentivization
28Reliance on professional managemen
13Pay and productivity
18Extent of staff training 
29Quality of vocational training
20Skillset of graduates
22Digital skills among active population 
13Ease of finding skilled employees
24Critical thinking in teaching
35Trade openness
26Labour tax rate
24Market capitalization
17Soundness of banks
20Non-performing loans % of gross total loans
28Gross domestic product
17Attitudes towards entrepreneurial risk
18Entrepreneurial culture 
17Attitudes towards entrepreneurial risk 
24Willingness to delegate authority
20Growth of innovative companies 
26Multi-stakeholder collaboration

THE PHILIPPINES IN THE BOTTOM 40 COUNTRIES IN THESE ASPECTS

RankIndicators
114Organized crime
137Terrorism incidence
126Reliability of police services
110Judicial independence
111Freedom of the press 
103Burden of government regulation
109Efficiency of legal framework in settling disputes
121Conflict of interest regulation in Corporate Governance
125Road connectivity
103Electricity access
105Exposure to unsafe drinking water
105Pupil-to-teacher ratio in primary education
115Extent of market dominance
116Redundancy costs 
104Worker’s Rights
130Credit gap (Financial System Stability)
108Banks’ regulatory capital ratio
106Cost of starting a business
118Time to start a business
112Insolvency recovery rate
102R&D expenditures

We need to pay close attention to these positive and negative indicators now to vie for the ranking but to improve our situation as a country.

Marking the strenghts with blue and the weaknesses with red will show that our strength lies in our human capital. Almost all the parameters under that pillar comprise our strength. Our weakest pillar is institutions, and over-all, our enabling environment.

Our innovation ecosystem is both our weakness and strength. We need to understand the blue and red areas and how we can create conducive and level playing field in these pillars.

Enabling Environment Pillars and Factors
Human Capital Pillars and Factors
Markets Pillars and Factors
Innovation Ecosystem Pillars and Factors

Read Full Report: Global Competitiveness Report 2019

Here are related links: Global Competitiveness Report 2019: How to end a lost decade of productivity growth

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