HIGHEST LABOR, POWER COSTS
RP least competitive
in Asean
The Philippines remains to be the least
competitive among countries in the Asean region in 2007,
weakening its capacity to attract investments, a study of the
Department of Finance showed.
It has the highest labor and power costs
while its currency rose the fastest last year. This despite the
fact that its office rental rates were among the lowest in the
region, the study said.
That contrasts to China, the current
manufacturing hub of the world, where labor and power costs were
the lowest, the study said.
Last year, power costs in the Philippines
continued to top those in the region, at $0.081 per
kilowatt-hour for industrial users. The country is followed only
by Singapore, where the average is $0.073/kwh.
Indonesia and Malaysia were cheaper, with
$0.059/kwh. China was the cheapest, with $0.044/kwh.
In terms of labor costs, the Philippines also
tops, paying its worker an average of $250-$200. All other
countries in the region were paying an average of $100-$250
including China, India, Indonesia, Malaysia and Vietnam.
Only Singapore, the region’s financial
center, exceeded the wages in the Philippines, giving its
workers more than $500 each on average.
Last year, the Philippine peso also
appreciated the most at 18.8 percent. The Indian rupee rose by
12 percent; Thai baht and Indonesian rupiah, seven percent;
Singapore dollar and China renminbi, 6.9 percent; Malaysian
ringgit, 6.4 percent; and Vietnam dong, 0.3 percent.
Meanwhile, the Philippines’ office rental
rates were among the lowest, at $145 per square meter per year.
That compares to $447 in India, which is the highest in the
region; $366 in China, $363 in Singapore and $176 in Thailand.
Indonesia and Malaysia were the cheapest,
with office rental rates of $143.
Data from the DOF study were culled from,
among other things; the Japan External Trade Organization 17th
survey of investment-related cost comparison in major cities and
regions in Asia and the IMD World Competitiveness Yearbook 2006.
The study was produced in preparation for the
Philippine Development Forum on March 25-27 where the government
will hold its annual dialogue with its development partners led
by the World Bank.
The Philippines has consistently lagged in
investment competitiveness surveys not only for the factors
cited in the DOF study but in the ease in doing business here.
In the World Bank’s global competitiveness
survey last year, the country’s ranking further dropped to 133rd
place out of 178 countries from 126th
place in the previous year.
The Philippines rated poorly in the various
measures used for the survey, namely: starting a business,
dealing with licenses, employing workers, registering property,
getting credit, protecting investors, paying taxes, trading
across borders, enforcing contracts and closing a business.
By contrast, Indonesia improved its ranking
to 123rd from 135th
while Singapore retained the 1st
place as the most competitive country where to do business.
Foreign-investors groups want to see, among
other things, reforms in the power sector including the use of
indigenous power sources to make power less expensive and
improved regulations to ease the cost of doing business.