State of Philippine Competitiveness 2007



There is still much to be done but we are on the right track, proclaims guest speaker Secretary Peter Favila of the Department of Trade and Industry (DTI) during the 2007 State of Philippine Competitiveness National Conference on July 18, 2007 at the New World Renaissance Hotel Manila, Makati City.

Improvements are happening

Although the Philippines may have slipped in ranking in the IMD World Competitiveness Yearbook of 2007 for government efficiency, infrastructure and economic performance, it has has made head way in the past year since the establishment of the National Competitiveness Council (NCC) in late 2006. There have been achievements in six (6) priority sectors, according to Secretary Favila. In the area of infrastructure, airports have been identified for lighting. In energy, amendments to the Electric Power Industry Reform Act of 2001 are being advocated (the inclusion of a Power Patrol Program, an energy saving program in school curricula to create awareness among the youth). In financing, road shows have been organized to promote available financial programs. In human resource competitiveness, various sectors are working to improving student’s proficiencies in core subjects (English, Science and Math). Lastly, the NCC is implementing a quality management system of five (5) key government agencies towards an ISO 9000 certification.

The direction it needs to go

In entering the world of Globalization 3.0, there is a convergence of new players on a whole new platform that requires developing new processes and habits. In order to be part of this, Francis Estrada, President of Asian Institute of Management recommends: firstly, improve education or improving people’s competencies, and, secondly, improve governance, particularly e-governance to assist in implementing more effective mandates.

“Performance Indicators need to be analyzed to determine what reforms are needed,” stated Asian Institute of Management Policy Center Executive Director Federico Macaranas. The Granger Causality Tests shows factors that affect overall competitiveness are as follows: for human resources, increase of qualified engineers; for management, better government decisions and less tax evasion; for financing, efficient banking and financial services support; for transaction costs and flows, international transactions and price controls; for infrastructure and energy, lower mobile telephone costs, more investment in telecommunications infrastructure, distribution infrastructure, and increased public expenditure on health and quality of life.

The root cause of our competitiveness problem lies in the failure of education and training systems, according to Senator Edgardo Angara. High school students always place at the bottom of local and international proficiency tests in math and sciences. In his field of expertise, he reiterates that the government should ensure that the private sector is not hampered by bureaucratic red tape and corruption which adds to transactional costs.

This national conference, organized by the NCC, Asian Institute of Management Policy Center and the Konrad Adenauer Stiftung, concentrated on the urgency of this problem. Atty. Emerico de Guzman of the Personnel Management Association of the Philippines (PMAP) recommends using our biggest resource advantage, the Filipino people, to improve national competitiveness. Our challenges are deteriorating quality of education, mismatch of jobs and skills, lack of training and technology, damaged values system, lack of integrated approach to resource policies, and poor health and working conditions.

Change the ways or face the hard consequences

Whether it be Sec. Peter Favila, Francis Estrada, Federico Macaranas, Atty. Emerico de Guzman, Baltazar Endriga of Management Association of the Philippines (MAP), Sergio Luis-Ortiz, Jr. of Philippine Exporters’ Confederation, Inc. (PHILEXPORT), David Balangue of Finance Executives Institute of the Philippines (FINEX), Meneleo Carlos, Jr. of the Federation of the Philippines Industries (FPI), or Francisco Viray, Co-chair of the NCC, they all had a similar message during this national conference. The Philippines needs to change its ways or face the hard consequences of the direction of the choices we continue to make.

This year’s participants were from a variety of sectors, 25% from the private sector, 25% from the national agencies and Local Government Units, 15% from the academe, 10% from the civil society and 10% from the diplomatic community.

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AIM Policy Center, Makati City


Klaus Preschle