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On July 19, 2005, KAS Partner the Asian Institute of Management (AIM) Policy Center announced the much-awaited results of the 2005 World Competitiveness Yearbook at the annual State of Philippine Competitiveness conference. Improvements in business efficiency powered the Philippines’ rise from rank 52 to 49. The country made no marked advance in the areas of government efficiency, economic performance, and access to infrastructure.

In his welcome remarks, KAS Country Representative Mr. Klaus Preschle underscored the role of the annual event in defining areas of Philippine strength and weakness and setting benchmarks for government and private sector action in support of country competitiveness.

Dr. Robert F. De Ocampo, President of the Asian Institute of Management, reviewed the Policy Center’s previous recommendations, crafted in response to the country’s 2004 rankings drop and presented an analysis of the results to a forum of business people, policymakers, government officials, diplomats, development specialists, and academics.

A country’s overall rank is based on how it ranks against the other 60 countries in the survey in four major categories and using 314 criteria. The four categories are economic performance, government efficiency, infrastructure, and business efficiency. It was primarily the country’s performance in the last category - business efficiency - that buoyed it above the bottom ten countries in the survey. “This significant improvement in business efficiency results from the positive attitude towards globalization and the high flexibility and adaptability to new challenges of our people, as well as general understanding of the need for social and economic reforms,” De Ocampo explained.

The Philippine’s performance in the other four categories remained, however, moribund. The Philippines showed weakness in, among others, international trade, public finance, institutional framework, GDP per capita, political parties, foreign investment, public expenditure on education and R&D, but ranked high in terms of employment, skilled labor, competent senior management, and the price of goods and servces. De Ocampo closed by recommending, as in the year past, for an improvement in the quality of and access to basic infrastructure and social services, the implementation of a coherent population policy, the propagation of anti-corruption measures in both the public and private sector, the strengthening of tax revenue collection and promotion of savings and responsible consumption to increase available funds for investments.

The second half of the conference focused on methods to improve the competitiveness of the Services Sector, in a bid to play to the country’s strength. Leaders and Scholars of the Franchising, Education, Accounting, and Medical Services industries, as well as the Seafarers associations called for the firming up and internationalization of a Filipino Services Brand. They also noted that without consistent private and government investment in the support systems for the country’s world-renowned skilled labor force – education, shelter, regulation and english-language training, Filipinos could lose their current edge.

The Service Industry leaders and government spokespersons included, Dr. Gloria Pasadilla of the Philippine Institute for Development Studies, Hon. Edsel T. Custodio, Undersecretary of the Department of Foreign Affairs, Ms. Alegria Limjoco, Chief Executive Officer, Francorp Philippines, Dr. Jaime Laya, Chairman Emeritus of Laya Mananghaya & Co., Dr. Jaime Galvez Tan, Executive Director of the National Institute of Health Philippines, Dr. Felina Young, Dean of the Graduate School of Business, San Beda College, Dr. Reynaldo Vea, President of the Mapua Institute of Technology, Professor Nieves Confesor of AIM, who spoke on Ship Management, and Mr. Vipul Bhagat, Country Manager of the International Finance Corporation.

Since 1996, the AIM Policy Center, in partnership with the Swiss-based Institute for Management Development (IMD), has been monitoring and evaluating the competitiveness performance, i.e., business competitiveness of the Philippines vis-à-vis around 60 other developing and developed economies spanning the globe. Competitiveness, as defined in its exhaustive publication, the World Competitiveness Yearbook, is the ability of nations to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people.

For inquiries regarding the conference, please contact the AIM Policy Center at tel. nos. 751-9182 to 83. Website: http://www.policy.aim.edu.ph