The Philippines fell one spot from 63rd last year to 64th in this year’s World Talent Ranking by Switzerland-based International Institute for Management Development’s (IMD) World Competitiveness Center, reflecting the country’s substandard performance in developing, attracting, and retaining its workforce.

The report, which is released annually, designates the Philippines among the world’s worst performers, just five spots away from the cellar dweller, which is Mongolia at 69th.

The rankings are assessed based on three components: investment and development, appeal, and readiness.

In terms of investment and development, the Philippines’ ranking fell to 66th place this year from 64th in 2024.

The country saw its ranking in appeal slide to 56th from the previous year’s 54th.

Taking into account readiness, the Philippines’ ranking was down six places, from 52nd to 58th.

The country continues to lag behind its Asia-Pacific peers, ranking 13th out of 14 countries in the region, only besting Mongolia. Hong Kong was the top performing economy in the region at 4th, followed by Singapore (seventh) and Taiwan (17th).

Globally, the talent ranking was once again topped by Switzerland, with Luxembourg and Iceland rounding up the top three.

Sought for comment, Management Association of the Philippines (MAP) President Al Panlilio said the decline in the Philippines’ talent ranking is indicative of the country’s poor education system.

“I think an important aspect is, how do you fix the curricula of the schools, from public to private, to make [them] relevant to the demands of the current workforce,” said Panlilio in a chance interview.

“Although there are a lot of available positions, the companies cannot hire, or don’t hire, because they can’t find the talent that they’re looking for,” he added.

With the advent of artificial intelligence (AI), Panlilio said the government should strengthen awareness on science, technology, engineering, and mathematics (STEM).

He said STEM is critical to prepare the future generation for a work environment deeply entrenched in AI and other emerging technologies.

“So it’s really a matter of upskilling our human capital. You might have the right strategies, but the people have to deliver those strategies,” he said.

Panlilio said MAP has been actively engaging with universities to ease students’ transition from the four corners of the classroom to corporate life.

“So we’re trying to bridge that, making sure that there’s a link or alignment on the educational system and what corporates need down the road, and even the public sector,” he said.

Panlilio added that retaining talent is one of the biggest hurdles among companies this year, which would require strong government support to build a strong pipeline to develop talent.

Based on IMD’s World Talent Ranking, the Philippines’ expenditure on education was 55th out of 69 countries, with a 3.3-percent share of gross domestic product (GDP).

The proposed budget for the education sector for next year stands at ₱1.224 trillion, equivalent to four percent of GDP.