2 February 2016                                                                                                                                                                                                                          

The National Competitiveness Council is pleased to report that for the fifth year in a row, the Philippines has moved up its rankings in Heritage Foundation’s Economic Freedom Index. The country has advanced 6 more notches to No. 70 in the latest ranking.

Published annually by the Heritage Foundation and Wall Street Journal, the Index measures “a nation’s commitment to free enterprise” and scores economies in ten categories, covering a broad range of factors including court system efficiency, tax rates, investment restrictions, and licensing requirements. Based on the average of these scores, economies are then classified as “free” (score of 80 or higher), “mostly free” (70-79.9), “moderately free” (60-69.9), “mostly unfree” (50-59.9), or “repressed” (below 50).

With a score of 62.2 this year, the Philippines maintained its status of “moderately free” for three years now, improving from its “mostly unfree” category in 2013.

This year, the Philippines improved its rank in business freedom (up 32, from No. 131 to No. 99), freedom from corruption rights (up 8 from No. 95 to No. 87), trade freedom (up 5, from No. 99 to No. 94), fiscal freedom (up 2, from No. 94 to No. 92), property rights (up 2, from No. 94 to No. 92), and financial freedom (up 1, from No. 39 to No. 38). The country slipped in monetary freedom (down 20, from No. 66 to No. 86), government spending (down 7, from No. 13 to No. 20), labor freedom (down 2, from No. 107 to No. 109), and Investment freedom (down 2, from No. 81 to No. 83).

The report noted that the Philippines has improved its overall standing. The total gain is now 45 places, up from No. 115 in 2011. This makes the Philippines the most improved economy in ASEAN and the second most improved economy in the world over the last five years.

Heritage Freedom noted that the Philippine economy has been growing steadily at an average annual rate above 6 percent for the past five years. It acknowledged the government’s efforts to pursue legislative reforms to enhance the entrepreneurial environment and develop a more vibrant private sector to generate broader-based job growth. However, despite the progress the country is attaining, poor infrastructure remains a serious impediment to economic growth.