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.