The Philippines took the steepest fall in Asia with a drastic seven position drop and now stands at its lowest ranking in five years to 52nd from 45th in the latest global competitiveness ranking.

The IMD World Competitiveness Center, the think tank of IMD business school in Switzerland and Singapore, ranks 64 economies and assesses the extent to which a country promotes the prosperity of its people by measuring economic well being four major indicators — economic performance, government efficiency, business efficiency, and infrastructure. The annual IMD report is also accompanied by an Executive Opinion Survey. 

According to the IMD World Competitiveness Ranking 2021, the Philippines' sharp decline can be attributed to its fall in economic performance, government,  and business efficiency. Its economic performance fell the hardest to 57th from 44th in 2020 due to its poor domestic economy, international investment and employment which saw unemployment rates double from around 5 percent to more than 10 percent. It has also suffered in its public finances and productivity of firms in the private sector.

All sub-indicators under economic performance ranked below 50 with GDP per capita and gross fixed capital formation ranking 62nd among 64 economies surveyed.

On government efficiency, the government also fell to 45th from 42nd pulled down by weaknesses in startup procedures, foreign investors, startup days, rule of law, bribery and corruption, new business density, foreign currency reserves per capita , sustainable development goals, redundancy costs and tax evasion. 

Business efficiency ranking also slipped to 37th from 33rd with sub-indicators - access to financial services, overall productivity, foreign labor force, labor productivity ranking 60th and below. 

Infrastructure also stagnates at 59th, same as last year, with all sub-indicators falling 60th and below. 

Data showed that the medical assistance ranked 64th, while number of patents in force, broadband subscribers, and total public expenditures on education per student at 62nd while communications technology, computers per capita and internet bandwidth speed at 61st. Pupil teacher ratio, internet users, and water use efficiency at 60th.

The government, which imposed one of the world’s longest hard lockdown that crippled the domestic economy during the pandemic, suffered major challenges.

The report identified these challenges to include difficulty in ensuring inclusive economic recovery and quickly reviving business and consumer confidence; effectively controlling the COVID-19 epidemic and implementing full vaccination rollout. building resilient social infrastructure especially in health and education; sustaining increased investments in physical and digital infrastructure; maintaining fiscal health while adequately providing stimulus and support especially for vulnerable sectors.

Respondents to IMD’s accompanying Executive Opinion Survey listed skilled workforce as the country’s top key attractiveness garnering 87.5 percent of respondents.  

This was followed by open and positive attitudes, high educational level, cost competitiveness, dynamism of the economy and access to financing. 

Among its Asian peers, the top performing economies are, in order, Singapore (5th), Hong Kong (7th), Taiwan (8th) and China (16th). China (16th) has the sharpest rise among the Asian economies with a 4 position jump, continuing the upward trajectory it has been on for a decade. China’s model has helped them survive the pandemic.

Taiwan is in the top 10 for the first time since the rankings began 33 years ago. Globally, the top 5 ranked economies this year are Switzerland (1st) followed in order by Sweden (up 4 positions), Denmark (down 1 position) the Netherlands remains at 4th and Singapore (5th) drops 4 spots but is the only Asian economy in the top 5.