The Philippine Embassy in Washington DC cited the country’s “moderately free” economic status in the Heritage Foundation 2018 Index of Economic Freedom (IEF) as “significantly better” than the global and regional averages.
On Saturday, Philippine Ambassador to the United States Jose Manuel Romualdez reported to Foreign Affairs Secretary Alan Peter Cayetano that the Philippines achieved an economic freedom score of 65.0 out of a possible 100, making the economy the 61st “freest” in the latest index.
While the country moved down slightly from its 58th ranking in 2017, its regional standing hiked by one rank to 13th among 43 countries in the Asia-Pacific that were surveyed.
The IEF is an annual survey of 180 countries published since 1995 by the Heritage Foundation, a Washington-based think-tank.
The 2018 index graded economies based on 12 independent factors are called “economic freedoms”.
“It clearly indicates the sustainability of Philippine economic growth, particularly on the back of serious economic reforms, particularly in ease of doing business and taxation,” Romualdez said in a statement.
“We are assured that this will enhance continued business and investor confidence, as we implement an ambitious infrastructure development program in the next few years,” he added.
While the Heritage Foundation noted problems posed by the “needed” institutional reforms, and a “weak” judicial system in the Philippines, it highlighted several positive developments.
It recognized the government adoption of fiscal reforms and its industrial production, which has been growing rapidly despite agriculture remaining a significant part of the economy.
Performance in the economic freedoms relating to government size, regulatory efficiency and open markets generally improved or remained stable.
The Philippines showed improvements in trade freedom with a score of 80.7, a 4.3-point increase from 2017; in judicial effectiveness with 38.2 points, a 1.1 increase; in fiscal health with a score of 97.7, a 0.5 grade higher; and in labor freedom with a 57.6 score, an increase of 0.4 points from last year.
Business, investment and financial freedoms remained stable.
Meanwhile, the Philippine Embassy pointed out certain observations in the IEF report “that do not seem to be supported by the facts on the ground”.
The report noted that the “rapid decline in the president’s popularity caused investor confidence to wane by the end of 2017”.
It also stated that “an absence of entrepreneurial dynamism thwarts development”.
“I wish to note that the latest Pulse Asia survey showed the President’s trust and approval ratings at an all-time high of 80 and 82 percent, respectively,” Romualdez stressed.
“The latest Social Weather Stations survey shows that the trust and satisfaction ratings are 83 and 75 percent, respectively,” he said in reaction to the IEF report’s statement on President Rodrigo Duterte’s “popularity”.
The envoy also referred to the Association of Southeast Asian Nations (ASEAN) Business Outlook Survey 2018 published by the United States Chamber of Commerce.
He said it showed 70 percent of those surveyed say their companies plan to expand in the Philippines, and 85 percent of respondents expect their companies’ profits to increase in 2018.
“Among all ASEAN member states, the Philippines scored highest in satisfaction with regard to an adequate and well-trained labor force, and second highest with regard to availability of trained personnel,” he emphasized.
“We believe that there might have been a time-lag in terms of Heritage Foundation receiving the latest and complete information on the President’s approval ratings and the level of business confidence in the Philippines,” he said.
The ambassador said the embassy would provide the think-tank with “a full update on the positive strides that we have taken with respect to developing a dynamic entrepreneurial economy, supported by a robust micro, small and medium enterprises development program and an innovation start-up eco-system”.