Trend in Competitiveness Rankings

  • 4448 reads
  • Syndicate content
VERALL, 2009 will be about achieving a flat trend in competitiveness rating due to the global financial crisis borne out of excesses in Wall St. and other financial capitals.
The chart will indicate that the Philippines is fortunate to maintain its 40th out of 80th place in this difficult year due to its robust economic fundamentals.
The National Competitiveness Council normally looks at seven rating institutions to get a snapshot of Philippine competitiveness.
It’s not an easy and straightforward process since it is like comparing apples and pears.
Varying criteria
For instance, WB-IFC is focusing only on bureaucratic red tape during business transactions with government agencies—although we know that competitiveness of local industries/services is not only dependent on this.
World Economic Forum and IMD, on the other hand, combine manifestations of a poor economy (called the soft factors such as quality of life, environment health education benefits) or what some call the manifestation of social weakness.
However, I suggest that we should pay closer attention to the solid causes of noncompetitiveness as identified earlier by Harvard Business School using the Porter’s Diamond Model.
Recently, the results of the IMD World Competitiveness Yearbook 2009 was announced by AIM.
The Philippines skid marginally from 40—43th position out of 57—which was not too bad considering the adverse environment that caused Taiwan, Greece, Ireland, Spain, among others, to drop by 5-10 slots!
Weaknesses
Most of RP’s weaknesses are in the so-called social indices brought about by the low level of economy, jobs, markets, savings, infrastructure, health, education and environment.
IMD ranked the RP as 32nd of 57 in Stress Test on Competitiveness—highlighting our economy’s robustness as mentioned earlier.
We are ahead of UK, Indonesia, Belgium, Mexico, France, Italy among others!
Standard Forum of N.Y. rates RP as very good in compliance with 12 key standards for sound financial system—26th out of 81. Bangko Sentral ng Pilipinas (BSP), Security & Exchange Commission (SEC), Philippine Stock Exchange (PSE), Insurance Commission (IC), etc., policy settings and their enforcement, control of public corporations, accounting/updating systems and government effectivity were seen to be quite good.
However, RP is not as highly rated in Business Indicator Index—64th of 81—although ahead of our neighbors Malaysia, India, Indonesia, Vietnam and Thailand.
The forum uses only information that is public and authoritative—they stay away from anecdotal tales and surveys of dubious values.
The Financial Standards Foundation, composed of accomplished professional need objective evaluations from sound decision meeting.
Global Integrity, with Nathaniel Heller as Managing Director, is a network of research and survey professionals who bemoan the practical of some institutions of using outdated information and coffee shop tales as inputs for rankings.
Objective study
The sloppy work of these institutions are being challenged by Global Integrity who have partners in more than 100 countries. They are based in Washington DC and are known to the US institutions.
Heller bemoans, “objective facts are at the mercy of public perception and politics.”
Forbes Best Countries for Business 2009—the yearly ranking of Forbes is eagerly awaited by big businesses, especially in the west who are looking for investment opportunities.
RP ranks 91st out of 127—ahead of Argentina, other South American countries, including Venezuela and Vietnam. They are attracted by our good trade balance and the potentially big market though they take note of the high unemployment rate.
Joblessness is the main threat to our economy—hence our market remains small despite our huge population because of “low buying power” of the Filipinos.
Jobs are important even in China were the youth who demonstrated for democracy at Tiananmen Square 20 years ago now rank “jobs” higher on their list of priorities.
The weakness of social indices is a manifestation of the imbalance between our big population and the low revenue collection, which makes it difficult for government to carry out its basic obligations diligently.
Additionally, there are “inefficiencies” or “leaks” that need to be addressed to ensure that the precious revenues collected are spent well.
But at the end of the day, all three functions must be addressed to achieve an improvement in social indices: High population, low revenues and inefficiencies.
Corporate governance
 
The Organization for Economic Development and Cooperation (OEDC) is doing an annual evaluation of corporate governance practice with several countries worldwide.
The hypothesis is that good corporate governance is a prerequisite for business to grow and take more responsibility of the country’s credibility.
After all, bribes and corruption are two sides of the same coin. The worst situation takes place when the line of business interests intercepts with the line of government authorities—as per study of AIM.
Lately, the OEDC finds the Philippines as one of the best in corporate governance in Asia and will showcase this experience in its Asia Business Roundtable later this year.
This acknowledgement has ramifications in the maturing trend of our corporations and their ability to influence public governance to a higher plane in the spirit of private-public-association.
Higher ratings
It is evident that, depending on how soon and how strong the extent of the recovery of world economy, the aggregate Competitiveness Rating for the Philippines may be even higher in 2010.
With the active role of the private sector in working with government agencies to improve processes in certain key agencies—the Philippines is on its way to competitiveness recovery.
(This article was lifted from the author’s presentation at the recent Economic Development Council-National Competitiveness Council Conference in Malacañang. This reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines.  The author is co-chair of the National Competitiveness Council and Trustee of Institute of Corporate Directors. He previously served as Secretary of the Department of Trade and Industry.) - Inquirer.net

OVERALL, 2009 will be about achieving a flat trend in competitiveness rating due to the global financial crisis borne out of excesses in Wall St. and other financial capitals.

The chart will indicate that the Philippines is fortunate to maintain its 40th out of 80th place in this difficult year due to its robust economic fundamentals.

The National Competitiveness Council normally looks at seven rating institutions to get a snapshot of Philippine competitiveness.It’s not an easy and straightforward process since it is like comparing apples and pears.

Varying criteria
For instance, WB-IFC is focusing only on bureaucratic red tape during business transactions with government agencies—although we know that competitiveness of local industries/services is not only dependent on this.

World Economic Forum and IMD, on the other hand, combine manifestations of a poor economy (called the soft factors such as quality of life, environment health education benefits) or what some call the manifestation of social weakness.

However, I suggest that we should pay closer attention to the solid causes of noncompetitiveness as identified earlier by Harvard Business School using the Porter’s Diamond Model.

Recently, the results of the IMD World Competitiveness Yearbook 2009 was announced by AIM.

The Philippines skid marginally from 40—43th position out of 57—which was not too bad considering the adverse environment that caused Taiwan, Greece, Ireland, Spain, among others, to drop by 5-10 slots!

Weaknesses
Most of RP’s weaknesses are in the so-called social indices brought about by the low level of economy, jobs, markets, savings, infrastructure, health, education and environment.

IMD ranked the RP as 32nd of 57 in Stress Test on Competitiveness—highlighting our economy’s robustness as mentioned earlier.

We are ahead of UK, Indonesia, Belgium, Mexico, France, Italy among others!

Standard Forum of N.Y. rates RP as very good in compliance with 12 key standards for sound financial system—26th out of 81. Bangko Sentral ng Pilipinas (BSP), Security & Exchange Commission (SEC), Philippine Stock Exchange (PSE), Insurance Commission (IC), etc., policy settings and their enforcement, control of public corporations, accounting/updating systems and government effectivity were seen to be quite good.

However, RP is not as highly rated in Business Indicator Index—64th of 81—although ahead of our neighbors Malaysia, India, Indonesia, Vietnam and Thailand.

The forum uses only information that is public and authoritative—they stay away from anecdotal tales and surveys of dubious values.

The Financial Standards Foundation, composed of accomplished professional need objective evaluations from sound decision meeting.

Global Integrity, with Nathaniel Heller as Managing Director, is a network of research and survey professionals who bemoan the practical of some institutions of using outdated information and coffee shop tales as inputs for rankings.

Objective study
The sloppy work of these institutions are being challenged by Global Integrity who have partners in more than 100 countries. They are based in Washington DC and are known to the US institutions.

Heller bemoans, “objective facts are at the mercy of public perception and politics.”

Forbes Best Countries for Business 2009—the yearly ranking of Forbes is eagerly awaited by big businesses, especially in the west who are looking for investment opportunities.

RP ranks 91st out of 127—ahead of Argentina, other South American countries, including Venezuela and Vietnam. They are attracted by our good trade balance and the potentially big market though they take note of the high unemployment rate.

Joblessness is the main threat to our economy—hence our market remains small despite our huge population because of “low buying power” of the Filipinos.

Jobs are important even in China were the youth who demonstrated for democracy at Tiananmen Square 20 years ago now rank “jobs” higher on their list of priorities.

The weakness of social indices is a manifestation of the imbalance between our big population and the low revenue collection, which makes it difficult for government to carry out its basic obligations diligently.

Additionally, there are “inefficiencies” or “leaks” that need to be addressed to ensure that the precious revenues collected are spent well.

But at the end of the day, all three functions must be addressed to achieve an improvement in social indices: High population, low revenues and inefficiencies.

Corporate governance
The Organization for Economic Development and Cooperation (OEDC) is doing an annual evaluation of corporate governance practice with several countries worldwide.

The hypothesis is that good corporate governance is a prerequisite for business to grow and take more responsibility of the country’s credibility.

After all, bribes and corruption are two sides of the same coin. The worst situation takes place when the line of business interests intercepts with the line of government authorities—as per study of AIM.

Lately, the OEDC finds the Philippines as one of the best in corporate governance in Asia and will showcase this experience in its Asia Business Roundtable later this year.

This acknowledgement has ramifications in the maturing trend of our corporations and their ability to influence public governance to a higher plane in the spirit of private-public-association.

Higher ratings
It is evident that, depending on how soon and how strong the extent of the recovery of world economy, the aggregate Competitiveness Rating for the Philippines may be even higher in 2010.

With the active role of the private sector in working with government agencies to improve processes in certain key agencies—the Philippines is on its way to competitiveness recovery.

By Cesar B. Bautista
Philippine Daily Inquirer
First Posted 03:04:00 06/08/2009

(This article was lifted from the author’s presentation at the recent Economic Development Council-National Competitiveness Council Conference in Malacañang. This reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines.  The author is co-chair of the National Competitiveness Council and Trustee of Institute of Corporate Directors. He previously served as Secretary of the Department of Trade and Industry.)