state of philippine competitiveness wef gcr 2012-2013

State of Competitiveness Report

State of Competitiveness Report

2012

Our Vision

To develop more competitive Philippines To instill a Culture of Excellence in Governance To use Public-Private Sector Partnerships as a

development engine

Our Mission

To build up long-term competitiveness of the Philippines through –opolicy reformsoproject implementationo institution-buildingoperformance monitoringogoal-setting

Work Program

Benchmark against key global competitiveness indices

Map each indicator to the agency responsible Focus on lowest-ranking indicators Track city competitiveness and key indicators Working Groups concentrate on specific projects Link Competitiveness Plan to Philippine

Development Plan, National Budget, LEDAC, Cabinet Agenda

2011-12 Performance

World Economic Forum GCI +10IFC Ease of Doing Business -2

(following a +14 re-rating due to methodology change)

IMD World Competitiveness Report -2Transparency International +5Millenium Challenge Account PassCountry Brand Index -25

Where we are today

WEF Global Competitiveness Report : No. 65 / 142 (2012)No. 6 of 8 in ASEAN

IFC Doing Business Survey : No. 136 / 183 (2011)No. 7 of 8 in ASEAN

IMD World Competitiveness Report : No. 43/59 (2012)No. 5 of 5 in ASEAN

FutureBrand’s Country Brand Index : No. 78 / 113 (2011)No. 15 of 20 in Asia Pacific

Our target

• WEF Global Competitiveness Report No. 30 or higher by 2016

• IFC Doing Business SurveyNo. 50 or higher by 2016

• IMD World Competitiveness ReportNo. 20 or higher by 2016

• FutureBrand’s Country Brand IndexNo. 30 or higher by 2016

Impact : Inclusive Growth

o Higher FDI (new investments of 3-4% of GDP), from US$1.7 billion in 2010

o Double export growth to US$120 billion by 2016 with new products and services to account for 30% of exports

o GDP Growth of 7-8% per yearo Job Growth / Lower Unemployment o Lower Poverty Incidence : 26.5% in 2009 to 16.6% by

2015o Growing C socioeconomic class(currently 8.6%); shrinking

DE class (currently 91%)

Sources: NSCB (Breakdown: 2010 Baseline- US$ 51.39 (goods) US$ 12.27(services) , 2016 Target- US$ 91.5 B (goods) & US$ 28.9 B (services), Chapter 3 Phil Development Plan (Competitive Industry Sector ), NEDA Targets; Phil. Labor and Employment Plan 2011-2016

1980

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Cambodia

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Thailand

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GDP per capita (US$)

Why does it matter?

Source: IMF 2011

Why does it matter?

Source: UN 2011

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FDI inflows (US$ million)

OUR CHALLENGEWhere we stand in international metrics

WEF-Global competitiveness reportPHILIPPINES

2009-2012 ENTRIES

2012 2011 2010 2009PHILIPPINES 65 75 85 87

COUNTRIES 2012 2011 2010 2009 SINGAPORE 1 1 1 1 THAILAND 17 16 12 13 MALAYSIA 18 23 23 20 VIETNAM 98 90 93 92

BRUNEI DARUSSALAM 83 86 96 88 INDONESIA 129 126 122 129

PHILIPPINES 136 134 144 140 CAMBODIA 138 138 145 135

Doing Business Survey: IFC Ease of Doing Business ReportPhilippines vs ASEAN

IFC Ease of Doing Business Report , 2009 – 2012Philippine Global Ranking

Indicators2012 (183

economies)

2011 (183

economies)

2010 (183

economies)

2009(181

economies)

Over-all ranking 136 134 144 140

Starting a business 158 155 162 155

Dealing w/ construction permits

102 98 111 105

Getting electricity 54 57 - -

Employing Workers - - 115 126

Registering Property 117 109 102 97

Getting Credit 126 116 127 123

Protecting Investors 133 131 132 126

Paying Taxes 136 127 135 129

Trading across borders 51 54 68 58

Enforcing contracts 112 114 118 114

Resolving Insolvency 163 161 153 151

IMD World Competitiveness Report 2012 OVERALL RANKING

Country 2012 ranking 2011 ranking change

SINGAPORE 4 3 - 1

MALAYSIA 14 16 + 2

THAILAND 30 27 - 3

INDONESIA 42 37 - 5

PHILIPPINES 43 41 -2

IMD World Competitiveness Report2012 RANKING 2011 RANKING CHANGE

Econ Performance

SINGAPORE 9 5 - 4

MALAYSIA 10 7 -3

THAILAND 15 10 -5

INDONESIA 32 32 0

PHILIPPINES 42 29 -13

Gov’t Efficiency

SINGAPORE 2 2 0

MALAYSIA 13 17 +4

THAILAND 26 23 - 3

INDONESIA 28 25 - 3

PHILIPPINES 32 37 +5

Millenium Challenge Account

The Philippines is monitored by MCA on 20 key performance indicators

The performance bar or threshold is set against a country’s economic classification

In 2011, the Philippines was classified a Low Income Country. In 2012, the classification was raised to Lower Middle Income Country, reflecting higher GNI per capita. Thus, the bar has been set higher.

The Philippines must pass one-half of all indicators, including Rule of Law and Control of Corruption.

The country is constantly working on ways to improve its performance on these and other competitiveness indicators.

The Global Competitiveness Index framework

Countries/ economies at each stage of development

WEF-Global competitiveness reportPHILIPPINES vs ASEAN

COUNTRIES 2012 2011 change

SINGAPORE 2 2 0

MALAYSIA 25 21 - 4

BRUNEI DARUSSALAM 28 28 0

THAILAND 38 39 + 1

INDONESIA 50 46 - 4

PHILIPPINES 65 75 + 10VIETNAM 75 65 - 10

CAMBODIA 85 97 + 12

l Other ASEAN Countries not included in the Survey: Laos & Myanmar

WEF-Global competitiveness reportPHILIPPINES vs ASEAN

2009-2012 ENTRIES

Over-all rankingsCOUNTRIES 2012 2011 2010 2009

SINGAPORE 2 2 3 3

MALAYSIA 25 21 26 24

BRUNEI DARUSSALAM 28 28 28 32

THAILAND 38 39 38 36

INDONESIA 50 46 44 54

PHILIPPINES 65 75 85 87VIETNAM 75 65 59 75

CAMBODIA 85 97 109 110

l Other ASEAN Countries not included in the Survey: Laos & Myanmar

0

25

50

75

100

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Philippines: Competitiveness IndexPercentile Rank

upper 45%

bottom 20%

WEF-Global competitiveness report 2011 & 2012PHILIPPINES

12 PILLARS

2012 2011 Change1st pillar: Institutions 94 117 + 23

2nd pillar: Infrastructure 98 105 + 7

3rd pillar: Macroeconomic environment 36 54 + 18

4th pillar: Health and primary education 98 92 - 6

5th pillar: Higher education and training 64 71 + 7

6th pillar: Goods market efficiency 86 88 + 2

7th pillar: Labor market efficiency 103 113 + 10

8th pillar: Financial market development 58 71 + 13

9th pillar: Technological readiness 79 83 + 4

10th pillar: Market size 35 36 + 1

11th pillar: Business sophistication 49 57 + 8

12th pillar: Innovation 94 108 + 14

Competitiveness Performance of the Philippines

Sources: Global Competitiveness Reports 2011-2012 and 2012-2013Note: Scores range from 1 to 7 with 7 as the best possible response except for hard data.

WEF – Global Competitiveness Report 2010 - 2012

INDICATORS 2012Indicators

2011Indicators

2010Indicators

RED Bottom 20% (115th – 144th)

8 (113th – 142nd)

21 (111th – 139th)

25

PURPLE Ranked 21 - 40% (86th – 114th)45

(85th – 112th)36

(83rd – 110th)37

YELLOW Ranked 41 – 50% (72nd – 85th)10

(71st – 84th)17

(69th – 82nd)20

BLACK Ranked 49% or higher

(1st – 71st)48

(1st – 70th)37

(1st – 68th)29

TOTAL 111 111 111

PHILIPPINE COMPETITIVENESS RANKINGWEF GLOBAL COMPETITIVENESS REPORT 2011 & 2012

2011 2011 2012 2012RED – bottom 20% (113th – 142nd) 21 indicators (115th – 144th) 8 indicatorsPURPLE – bottom 40-21% (85th – 112th) 36 indicators (86th – 114th) 45 indicatorsORANGE – bottom 50 – 41% (71st– 84th) 17 indicators (72nd– 85th) 10 indicatorsBLACK (1st – 70th) 37 indicators (1st – 71st) 48 indicators

111 indicators 111 indicators

INDICATORS RANKING (2010)

RANKING (2011)

RANKING (2012)

CHANGE

OVER-ALL RANKING 85/139 75/142 65/144 + 101st pillar: Institutions 125 117 94 + 231.01 Property rights 99 105 74 + 311.02 Intellectual property protection 103 102 87 + 151.03 Diversion of public funds 135 127 100 + 271.04 Public trust of/in politicians 134 128 95 + 331.05 Irregular payments and bribes 128 119 108 + 111.06 Judicial independence 111 102 99 + 31.07 Favoritism in decisions of government officials

131 118 87 + 31

1.08 Wastefulness of government spending 118 109 86 + 231.09 Burden of government regulation 126 126 108 + 181.10 Efficiency of legal framework in settling disputes

122 115 107 + 8


RANKING (2011)

RANKING (2012)

CHANGE

1.11 Efficiency of legal framework in challenging regulations

116 118 102 + 16

1.12 Transparency of government policymaking

123 120 97 + 23

1.13 Government services for Improved business performance

- - 51 -

1.14 Business costs of terrorism 126 130 126 + 4

1.15 Business costs of crime and violence 104 112 107 + 5

1.16 Organized crime 106 102 97 + 5

1.17 Reliability of police services 105 112 100 + 12

1.18 Ethical behavior of firms 129 118 87 + 31

1.19 Strength of auditing and reporting standards

75 62 41 + 21

1.20 Efficacy of corporate boards 56 52 51 + 1

1.21 Protection of minority shareholders’ interests

80 84 57 + 27

1.22 Strength of investor protection, 0-10 (best)*

109 111 110 + 1


RANKING (2011)

RANKING (2012)

CHANGE

2nd pillar: Infrastructure 104 105 98 + 7

2.01 Quality of overall infrastructure 113 113 98 + 15

2.02 Quality of roads 114 100 87 + 13

2.03 Quality of railroad infrastructure 97 101 94 + 7

2.04 Quality of port infrastructure 131 123 120 + 3

2.05 Quality of air transport infrastructure 112 115 112 + 3

2.06 Available airline seat kilometers/week, millions*

28 28 26 + 2

2.07 Quality of electricity supply 101 104 98 + 6

2.08 Mobile telephone subscriptions/100 pop* 88 92 95 - 3

2.09 Fixed telephone lines/100 pop* 106 103 103 0

3rd pillar: Macroeconomic environment 68 54 36 + 18

3.01 Government budget balance, % GDP* 62 71 36 + 35

3.02 Gross national savings, % GDP* 74 70 47 + 23

3.03 Inflation, annual % change* 73 69 70 - 1

Interest rate spread* 75 50 -

3.04 General government debt, % GDP* 102 89 72 + 17

3.05 Country credit rating, 0-100 (best)* 75 63 60 + 3


RANKING (2011)

RANKING (2012)

CHANGE

4th pillar: Health and primary education 90 92 98 - 6

4.01 Business impact of malaria 101 101 102 - 1

4.02 Malaria cases/100,000 pop* 96 95 95 0

4.03 Business impact of tuberculosis 106 107 116 - 9

4.04 Tuberculosis cases/100,000 pop * 117 119 126 - 7

4.05 Business impact of HIV/AIDS 83 80 83 - 3

4.06 HIV prevalence, % adult pop* 1 1 12 - 11

4.07 Infant mortality, deaths/1,000 live births* 89 95 91 + 4

4.08 Life expectancy, years* 84 82 102 - 20

4.09 Quality of primary education 99 110 86 + 24

4.10 Primary education enrollment, net %* 82 81 101 - 20

5th pillar: Higher education and training 73 71 64 + 7

5.01 Secondary education enrollment, gross %* 82 81 81 0

5.02 Tertiary education enrollment, gross %* 76 75 76 - 1

5.03 Quality of the educational system 69 61 45 + 16

5.04 Quality of math and science education 112 115 98 + 17

5.05 Quality of management schools 61 55 39 + 16


RANKING (2011)

RANKING (2012)

CHANGE

5.06 Internet access in schools 76 73 73 05.07 Availability of research and training services

77 62 62 0

5.08 Extent of staff training 46 34 32 + 2 6th pillar: Goods market efficiency 97 88 86 + 26.01 Intensity of local competition 65 47 50 - 36.02 Extent of market dominance 109 117 98 + 196.03 Effectiveness of anti-monopoly policy 92 98 84 + 146.04 Extent and effect of taxation 77 52 57 - 56.05 Total tax rate, % profits* 99 93 102 - 96.06 Number of procedures to start a business*

128 134 137 - 3

6.07 Number of days to start a business* 120 112 112 06.08 Agricultural policy costs 95 89 76 +136.09 Prevalence of trade barriers 89 89 76 +136.10 Trade tariffs, % duty* 52 47 53 - 66.11 Prevalence of foreign ownership 104 72 66 + 66.12 Business impact of rules on FDI 98 89 69 + 206.13 Burden of customs procedures 129 128 126 + 26.14 Imports as a percentage of GDP* - 96 97 - 16.15 Degree of customer orientation 42 46 27 + 196.16 Buyer sophistication 60 56 57 - 1


RANKING (2011)

RANKING (2012)

CHANGE

7th pillar: Labor market efficiency 111 113 103 + 10

7.01 Cooperation in labor-employer relations 56 55 38 + 17

7.02 Flexibility of wage determination 96 102 117 - 15

Rigidity of employment* 75 79 - -

7.03 Hiring and firing practices 116 113 108 + 5

7.04 Redundancy costs, weeks of salary* 114 118 120 - 2

7.05 Pay and productivity 82 76 57 + 19

7.06 Reliance on professional management 47 50 38 + 12

7.07 Brain drain 85 91 71 + 20

7.08 Women in labor force, ratio to men* 104 103 109 - 6

8th pillar: Financial market development 75 71 58 + 13

8.01 Availability of financial services 49 50 50 0

8.02 Affordability of financial services 37 42 34 + 8

8.03 Financing through local equity market 56 44 36 + 8

8.04 Ease of access to loans 55 52 46 + 6

8.05 Venture capital availability 75 71 62 + 9

8.06 Soundness of banks 38 46 41 + 5


RANKING (2011)

RANKING (2012)

CHANGE

8.07 Regulation of securities exchanges 73 64 46 + 18

8.08 Legal rights Index, 0 – 10 (best)* 103 105 99 + 6

Restriction on capital flows 64 - - -

9th pillar: Technological readiness 95 83 79 + 4

9.01 Availability of latest technologies 62 62 56 + 6

9.02 Firm-level technology absorption 59 52 46 + 6

9.03 FDI and technology transfer 88 66 40 + 26

9.04 Individuals using internet, %* 112 88 90 - 2

9.05 Broadband Internet subscriptions/100 pop*

84 90 91 - 1

9.06 International Internet bandwidth, kb/s per user*

101 76 75 + 1

9.07 Mobile broadband subscriptions/100 pop*

- - 93 -

10th pillar: Market size 37 36 35 + 1

10.01 Domestic market size Index, 1-7 (best)* 33 31 29 + 2

10.02 Foreign market size index, 1-7 (best)* 43 40 40 0


RANKING (2011)

RANKING (2012)

CHANGE

11th pillar: Business sophistication 60 57 49 + 8

11.01 Local supplier quantity 68 52 49 + 3

11.02 Local supplier quality 70 71 68 + 3

11.03 State of cluster development 55 54 38 + 16

11.04 Nature of competitive advantage 67 74 58 + 16

11.05 Value chain breadth 59 67 66 + 1

11.06 Control of international distribution 45 47 54 - 7

11.07 Production process sophistication 86 72 64 + 8

11.08 Extent of marketing 50 40 41 - 1

11.09 Willingness to delegate authority 38 33 27 + 6

12th pillar: Innovation 111 108 94 + 14

12.01 Capacity for innovation 80 95 86 + 9

12.02 Quality of scientific research Institutions 108 106 102 + 4

12.03 Company spending on R&D 85 85 58 + 27

12.04 University-Industry collaboration in R&D 85 83 79 + 4

12.05 Government procurement of advanced tech products

129 126 107 + 19

12.06 Availability of scientists and engineers 96 97 91 + 6

12.07 PCT patents, applications/million pop* 71 68 83 - 15

WEF-Global competitiveness report 2011 & 2012PHILIPPINES KEY DRIVERS

INDICATORS 2012 2011 Change1st pillar: Institutions1.04 Public trust of/in politicians 95 128 + 331.01 Property rights 74 105 + 311.07 Favoritism in decisions of government officials 87 118 + 311.18 Ethical behavior of firms 87 118 + 31

2nd pillar: Infrastructure2.01 Quality of overall infrastructure 98 113 + 152.02 Quality of roads 87 100 + 132.03 Quality of railroad infrastructure 94 101 + 7

3rd pillar: Macroeconomic environment3.01 Government budget balance, % GDP* 36 71 + 353.02 Gross national savings, % GDP* 47 70 + 233.04 General government debt, % GDP* 72 89 + 17

4th pillar: Health and primary education4.09 Quality of primary education 86 110 + 244.07 Infant mortality, deaths/1,000 live births* 91 95 + 4

5th pillar: Higher education and training5.04 Quality of math and science education 98 115 + 175.03 Quality of the educational system 45 61 + 165.05 Quality of management schools 39 55 + 16

6th pillar: Goods market efficiency6.12 Business impact of rules on FDI 69 89 + 206.02 Extent of market dominance 98 117 + 196.15 Degree of customer orientation 27 46 + 19

WEF-Global competitiveness report 2011 & 2012PHILIPPINES KEY DRIVERS

INDICATORS 2012 2011 Change7th pillar: Labor market efficiency7.07 Brain drain 71 91 + 207.05 Pay and productivity 57 76 + 197.01 Cooperation in labor-employer relations 38 55 + 17

8th pillar: Financial market development8.07 Regulation of securities exchanges 46 64 + 188.05 Venture capital availability 62 71 + 98.02 Affordability of financial services 34 42 + 88.03 Financing through local equity market 36 44 + 8

9th pillar: Technological readiness9.03 FDI and technology transfer 40 66 + 269.01 Availability of latest technologies 56 62 + 69.02 Firm-level technology absorption 46 52 + 6

10th pillar: Market size10.01 Domestic market size Index, 1-7 (best)* 29 31 + 2

11th pillar: Business sophistication11.03 State of cluster development 38 54 + 1611.04 Nature of competitive advantage 58 74 + 1611.07 Production process sophistication 64 72 + 8

12th pillar: Innovation12.03 Company spending on R&D 58 85 + 2712.05 Government procurement of advanced tech products 107 126 + 1912.01 Capacity for innovation 86 95 + 9


KEY CONSTRAINTSINDICATORS 2012 2011 Change

2nd pillar: Infrastructure2.08 Mobile telephone subscriptions/100 pop* 95 92 - 32.09 Fixed telephone lines/100 pop* 103 103 0

3rd pillar: Macroeconomic environment3.03 Inflation, annual % change* 70 69 - 1

4th pillar: Health and primary education4.08 Life expectancy, years* 102 82 - 204.10 Primary education enrollment, net %* 101 81 - 204.06 HIV prevalence, % adult pop* 12 1 - 11

5th pillar: Higher education and training5.02 Tertiary education enrollment, gross %* 76 75 - 15.01 Secondary education enrollment, gross %* 81 81 05.06 Internet access in schools 73 73 05.07 Availability of research and training services 62 62 0

6th pillar: Goods market efficiency6.05 Total tax rate, % profits* 102 93 - 96.10 Trade tariffs, % duty* 53 47 - 66.04 Extent and effect of taxation 57 52 - 5


KEY CONSTRAINTSINDICATORS 2012 2011 Change

7th pillar: Labor market efficiency7.02 Flexibility of wage determination 117 102 - 157.08 Women in labor force, ratio to men* 109 103 - 67.04 Redundancy costs, weeks of salary* 120 118 - 2

8th pillar: Financial market development8.01 Availability of financial services 50 50 0

9th pillar: Technological readiness9.04 Individuals using internet, %* 90 88 - 29.05 Broadband Internet subscriptions/100 pop* 91 90 - 1

10th pillar: Market size10.02 Foreign market size index, 1-7 (best)* 40 40 0

11th pillar: Business sophistication11.06 Control of international distribution 54 47 - 711.08 Extent of marketing 41 40 - 1

12th pillar: Innovation12.07 PCT patents, applications/million pop* 83 68 - 15

Note: From the list of factors above, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.

The most problematic factors for doing business

Philippines Vs. ASEAN: Basic Requirements

Source: Global Competitiveness Report 2012-2013

Philippines Vs. ASEAN: Efficiency enhancers


Philippines Vs. ASEAN: Innovation and sophistication


Rank Indicator 137 Number of procedures to start a business 126 Business cost of terrorism 126 Burden of customs procedures 120 Quality of port infrastructure 117 Flexibility of wage determination 112 Quality of air transport infrastructure 108 Hiring and firing practices 107 Efficiency of legal framework in settling disputes 107 Business costs of crime and violence 102 Efficiency of legal framework in challenging regulations 102 Total tax rate 102 Quality of scientific research institutions101 Net primary education enrollment 100 Diversion of public funds 99 Judicial independence 98 Quality of math and science education 94 Quality of railroad infrastructure 87 Favoritism in decisions of government officials 84 Effectiveness of anti-monopoly policy 86 Capacity for innovation

Lowest Ranking Philippine Indicators in ASEAN


2012 – 13 Plan

o Continuous tracking of global reports and inclusion in performance evaluation systems

o Regional / Local Competitiveness Councils

o Industry Roadmaps

o National Competitiveness Assessment and Plan

Continuous tracking and improvements in …

WEF – Global Index

Governance and Bureaucracy

Infrastructure

Macroeconomic management

Education

Labor Market

Technological Readiness

Innovation

IFC Doing Business Report

Starting a Business

Construction Permits

Credit information

Enforcing Contracts

Resolving Insolvency

Regional Competitiveness Committees

o Create regional / local competitiveness councils composed of

public and private sectors

o Build template of indicators so regions can track their

competitiveness for comparison with national and international

regions

o Involve universities in data-collection and analysis

o Build pipeline for technical training and capacity-building

o 12 committees being set up as of 6/2012

Industry Roadmaps

• As competitive environment is created, industry and individual firms are drivers of growth and wealth creation.

• DTI will invite industries to prepare 5 - 10 year industry roadmaps

• Roadmaps should describe –– State of industry today– Other country competitors– Potential of industry for value and employment growth– Projected investments by industry players– Policy environment required by industry (e.g., regulatory,

infrastructure, human resources, financial, etc.)

National Competitiveness Assessment and Plan

o Annual assessment of performance indicators

o Global performance indicators linked to 6-year Philippine

Development Plan

o Creation of Long-Term Strategic Plan

o Preparation of Annual Operating Plans

o Emphasis on execution and delivery

o Creation of special unit within OP or expansion of PMS

mandate

Building Blocks

National Competitiveness

Plan

Working Groups Industry Roadmaps

Regional Competitiveness

Committees

Maraming Salamat Po!

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