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Switzerland-based International Institute for Management Development (IMD) recently announced that the Philippines improved four spots in its 2022 World Competitiveness Yearbook.
Based on the 2022 version of the report, the country ranked 48th out of 63 economies, climbing up from 52nd place out of 64 economies in 2021.
IMD looked at the competitiveness of the Philippines via 333 indicators categorized under four factors: economic performance, government efficiency, business efficiency, and infrastructure. The Philippines ranked higher in economic performance (53rd) and in infrastructure (57th), but went down in government efficiency (48th), and business efficiency (39th).
Despite the improved ranking, IMD World Competitiveness Center Chief Economist Christos Cabolis tells BusinessWorld reporter Revin Mikhael D. Ochave that the Philippines in 2022 faces five key challenges, as provided by the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness.
The challenges, as explained by Mr. Cabolis in this B-Side episode, are:
Implementing effective post-pandemic economic recovery strategies while strengthening fiscal responsibility.
“It is the provision of liquidity. Rightfully, the years of the pandemic create the necessity to try to balance that. We try to balance that in two ways. First is to phase out this liquidity support by strengthening the economy and secondly to see how the debt that has been acquired by the country can be sustainable. What exactly is the primary budget balance. How we can bring that in a manageable position, and therefore how we can strengthen the fiscal responsibility.”
Regaining lost momentum in poverty reduction and inclusive economic development.
“If one tries to see what are the short-run issues and solutions that the government has to try to tackle is the inflationary pressure. This exacerbates the issue of poverty and by addressing that, one hopes that the poverty issue can be eliminated. Poverty reduction is a much more complicated issue that needs to be addressed not only from the inflation point-of-view.
“Inclusivity of economic development is a must, especially if one tries to see what exactly is going on with the societal framework that we try to measure for each economy we study.”
Promoting innovative governance and a smooth post-election transition of power.
“This deals with how the government will be able to make the steps to have a transition in power which will be smooth and to build the credibility that the solutions that it will provide will be good for the country and also good for the residents of the country as a whole.
“In general, what we see after elections is that new governments enjoy the positive sentiment of the people, the positive sentiment of the business community. Essentially, the challenge for the new government, in my opinion, will be to take that and use it effectively because most of the time, this does not hold for a long period of time. Use this as a springboard in order to accomplish some short-run objectives that they have in mind about the economy, which essentially will be the momentum to move into the more challenging parts of the future.”
Building resilient and future-ready health and education systems.
“The health system should not only deal with the issue that we have right now, which is the COVID-19 pandemic. But essentially, look forward and try to make sure that it will be ready for the next pandemic. We are not yet out of the pandemic.
“We need more investments in education. What will be good to see is where these investments will have the highest impact. Most frequently, it is a portfolio of things that should happen. You cannot have new infrastructure unless you have people who will use these effectively. Investments should also be made for long-term learning.”
Investing in sustainable infrastructure and reducing climate change vulnerability.
“This is a very important task. What will be the future of the economy? What do we need to do? Do we need to continue whatever we do trying to increase certain parts of the economy or do we make a decision where we try to look at the issues that two generations from now will have to face?”
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