BY IRMA ISIP

The Philippines’ ranking in competitiveness slipped three notches in 2009 to 43 from 40 in 2008 among 57 countries, the World Competitiveness Yearbook report of the Geneva-based International Institute for Management Development (IMD) said

The report, released yesterday by the AIM Policy Center, shows that the Philippines was poorest in basic infrastructure where it landed at 57; international investment, 56; public finances, 54; education, 54; productivity and efficiency, 53 and; business legislation, 50.

The Philippines also dwelled in the bottom of 13 countries in Asia-Pacific in terms of competitiveness.

But the Philippine was in the middle, at 32 of 57 countries, in the stress test for resilience in the face of global turbulence, which was an added feature in this year’s survey.

Donald Dee, special envoy for international trade, said the Philippines’ poor competitiveness ranking on business legislation can be traced on too much politicking and that on infrastructure on monopoly, particularly in the energy sector.

"All these talks of a constitutional amendments… the necessity (of charter change) is questionable," Dee said.

He also called for an end to monopolistic energy sector by opening the sectors to competition if the country is to improve basic infrastructure, which in the IIMD survey covered water, energy, transportation and their projected supply.

Overall, he said, rapid population growth limits resource allocation for basic services that in turn weakens competitiveness.

Ma. Lourdes Sereno, executive director of the AIM Policy Center, said the findings highlight the Philippines’ five key challenges to improve competitiveness.

Sereno said the country has to strengthen its domestic market to moderate the impact of the export slowdown.

It has to implement a cohesive political agenda to address jobs and skills mismatch.

To improve infrastructure, Sereno said the country also has to address its energy shortfall, emphasizing on integrated strategic planning and good governance practices.

She added that the Philippines has to align its national regulatory policies with local reform initiatives – such as in the case of business transactions.

Lastly, Sereno noted the need to alleviate hunger and poverty to improve the long-term competitiveness of human resources.

Based on the WCY, the Philippines’ strength are in labor market (5); price (14); fiscal policy (13) and societal framework (20).

The Philippines is in the top 10 in certain criteria that include growth of exports, cost of living, BSP policy, skilled labor, flexibility, market size and female position.

In the stress test which identifies which countries better fare during this crisis, the Philippines was good at 20, based on the forecast on the economy; business at 29 and society at 36.

Dee said the survey results can be used by the private sector as tool in a developing roadmap for industries but he said that the country has to undertake measures to make industries at par to the level of Asian neighbors.

"Our slippage is not acceptable because we are being left behind," Dee said.

Indonesia, for example, overtook the Philippines at 42, improving nine notches from 51 in 2008. Another Asean country, Singapore, placed third while a neighbor, Hong Kong was number two.

The United States, despite the crisis, maintained its top spot.

Stephane Garelli, director of the IMD, said this proves that in a free fall economy, it does not matter which country is raising its competitiveness, but competitiveness is also about how countries can resist adversity and show resilience to weather the storm.

The survey was based on 300 criteria lumped in four areas: economic performance; government efficiency; business efficiency and infrastructure,