Philippine global competitiveness ranking slips
Posted: 2:28 AM | Oct. 01, 2005

THE Philippines continued to lose ground against other countries in the battle for foreign investments this year because of growing corruption, poor domestic infrastructure, and an inefficient state bureaucracy, according to the World Economic Forum's latest global competitiveness ranking.

The Philippines slipped a notch to rank 77th in competitiveness in a field of 117 countries.

The survey affirmed the Philippines' position as the least attractive investment site among major ASEAN member nations, three places below Indonesia.

The ranking is the result of a survey of nearly 11,000 business leaders in 117 countries worldwide, the largest poll in the history of the WEF, based in Davos, Switzerland.

Nordic countries and so-called "East Asian tigers" topped the global competitiveness rankings. Finland remained as the most competitive country in the world for business, followed by the United States, Sweden, Denmark, Taiwan and Singapore.

Finland has maintained its top rank for four of the past five years.

In the Philippines, the survey was administered by the Makati Business Club (MBC), whose members include heads of the biggest corporations in the country. MBC executive director Guillermo Luz said the MBC had been doing the Philippine surveys for the WEF for "eight to ten years."

"The trend over the years is downward" for the Philippines' competitiveness ranking, he said.

Apart from corruption, poor infrastructure, and a bureaucratic logjam, investors are also being turned off by "policy instability" as evidenced by frequent rule changes especially in terms of business contracts. Investors were also being deterred by government instability and rising criminality, Luz said.

The Philippines' competitiveness was badly hurt by a weak domestic economy, which is struggling under a long-running budget deficit, aggravated by spiraling consumer and petroleum prices, he said.

"We maintained our macroeconomic stability ranking, but we lost ground in terms of government waste or efficiency, and in terms of our credit rating," Luz said.

On the positive side, the country improved its technology index ranking -- both in public and private institutions -- from a global rank of 61 last year to 54 this year, as more institutions began using automation.

"Our ranking in terms of innovation declined this year, but our overall ranking for ICT [information and communication technology] use went up," Luz said.

The survey aims to guide investors and business leaders around the world in allocating their assets from country to country.

"The question facing these people is if they want to go into countries with these problems," Luz said.

The World Economic Forum has been producing the Global Competitiveness Report for 26 years. In a press statement, it said its "unique mix of hard and soft data" made it possible to accurately capture a broad range of factors believed to be essential for a "better understanding of the determinants of growth." Daxim Lucas, with INQ7.net