MANILA - (UPDATED 9:26 a.m.) After dropping two steps
last year, the Philippines climbs five notches in the International
Institute for Management Development's (IMD) 2013 World Competitiveness
rankings.
The Philippines went up from 43 to 38 in the World Competetiveness
Yearbook as investments in telecommunications, foreign direct and
portfolio investments, real gross domestic growth (GDP) per capita and
real GDP growth improved.
It also helped that the country's direct investments abroad, social
cohesion, and its international image or branding got better, the
yearbook said.
The Philippines also benefitted from a benign consumer price inflation; shrinking government subsidies, improved scientific research, researchers and scientists; narrowing interest rate spread; and easing protectionism.
The Philippines also benefitted from a benign consumer price inflation; shrinking government subsidies, improved scientific research, researchers and scientists; narrowing interest rate spread; and easing protectionism.
Still, it was not all high marks. The Philippines was seen to have weaknesses in several areas of the economy, specifically:
- high-tech exports
- real short-term interest rates
- employer's social security contribution rate
- water transportation
- government budget deficit
- relocation threats of production
- direct investments in stocks abroad
- communication technology
- current account balance
- state ownership of enterprises
- foreign investors
- employee training
- social responsibility
- investment risk
- start-up procedures
Overall, however, the Philippines was graded to remain attractive to
investors. A big pool of skilled workers was on top of investors' lists
of things to like about the country, IMD's Executive Opinion Survey
showed.
The country has to hurdle several key issues this year to be able to
lift it from its present ranking. High up on the priority list, the IMD
said: improving and expanding infrastructure.
"Many roads remain unpaved and the main airport is operating beyond capacity," the Yearbook says.
The Aquino administration also needs to step up its anti-corruption drive as the country still ranked 105th out of the 174 by Transparency International.
Despite the stellar growth posted over the past few years, unemployment in the country is still the highest among the ASEAN 5 group, which counts Singapore, Malaysia, Thailand, Indonesia, and the Philippines.
Moreover, the country still has to contend with an undeveloped financial system and it should work to improve access to financing - the biggest challenge facing small and medium enterprises.
Additionally, it was noted, while this may be beyond the government's control, the Philippines suffers regularly from natural disasters. An average of 20 typhoons hit the Philippines in a year, causing billions of pesos in damages. The government must mitigate against the risks these calamities bring.
"Many roads remain unpaved and the main airport is operating beyond capacity," the Yearbook says.
The Aquino administration also needs to step up its anti-corruption drive as the country still ranked 105th out of the 174 by Transparency International.
Despite the stellar growth posted over the past few years, unemployment in the country is still the highest among the ASEAN 5 group, which counts Singapore, Malaysia, Thailand, Indonesia, and the Philippines.
Moreover, the country still has to contend with an undeveloped financial system and it should work to improve access to financing - the biggest challenge facing small and medium enterprises.
Additionally, it was noted, while this may be beyond the government's control, the Philippines suffers regularly from natural disasters. An average of 20 typhoons hit the Philippines in a year, causing billions of pesos in damages. The government must mitigate against the risks these calamities bring.
The 2013 World Competitiveness Rankings is released by IMD in
partnership with the AIM Policy Center and the Konrad Adenauer Stiftung.
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