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
|7||Internal labour mobility|
|9||Insolvency regulatory framework|
|9||Diversity of workforce|
|10||Companies embracing disruptive ideas|
|19||Environment-related treaties in force|
|39||Energy efficiency regulation|
|36||Environment-related treaties in force|
|35||Meritocracy and incentivization|
|28||Reliance on professional managemen|
|13||Pay and productivity|
|18||Extent of staff training|
|29||Quality of vocational training|
|20||Skillset of graduates|
|22||Digital skills among active population|
|13||Ease of finding skilled employees|
|24||Critical thinking in teaching|
|26||Labour tax rate|
|17||Soundness of banks|
|20||Non-performing loans % of gross total loans|
|28||Gross domestic product|
|17||Attitudes towards entrepreneurial risk|
|17||Attitudes towards entrepreneurial risk|
|24||Willingness to delegate authority|
|20||Growth of innovative companies|
THE PHILIPPINES IN THE BOTTOM 40 COUNTRIES IN THESE ASPECTS
|126||Reliability of police services|
|111||Freedom of the press|
|103||Burden of government regulation|
|109||Efficiency of legal framework in settling disputes|
|121||Conflict of interest regulation in Corporate Governance|
|105||Exposure to unsafe drinking water|
|105||Pupil-to-teacher ratio in primary education|
|115||Extent of market dominance|
|130||Credit gap (Financial System Stability)|
|108||Banks’ regulatory capital ratio|
|106||Cost of starting a business|
|118||Time to start a business|
|112||Insolvency recovery rate|
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.
Read Full Report: Global Competitiveness Report 2019
Here are related links: Global Competitiveness Report 2019: How to end a lost decade of productivity growth