The Philippines has slipped back one notch to 42^nd place out of 61 economies in the overall ranking of the 2016 IMD World Competitiveness Report. As a result, the country remained 4^th among the five ASEAN nations and 12^th place among the 14 Asia-Pacific economies.

Published every year, the IMD World Competitiveness Report reviews four major factors – economic efficiency, government efficiency, business efficiency, and infrastructure. Each factor is further divided into five sub-factors.               

Despite the setback in the overall rankings, we are pleased to note that the Philippines has advanced in area of Business Efficiency (up 2 notches from 26^th to 24^th) where most of the sub-factors have moved up, namely:  management practices (up 9 places, from 33^rd to 24^th), attitude and values (up 7 places from 19^th to 12^th), productivity and efficiency (up 5 places from 41^st to 36^th), and labor market (up one notch, from 5^th to 4^th) . Only the finance sub-factor slipped in the ranking (down 2 notches from 33^rd to 35^th).

Subfactors in the area of Infrastructure (up 2 places from 57^th to 55^th) also posted improvements, such as scientific infrastructure (up 3 places from 58^th to 55^th), health and environment ( one notch up from 55^th to 54^th) and basic infrastructure (one notch up from 58^th to 57^th). Amid these growths, poor performance in the technological infrastructure (down 5 notches from 36^th to 41^st) and education (down 3 notches from 56^th to 59^th) countered the positive results of other indicators.

Meanwhile, the area of Economic Performance declined (down 4 notches from 34^th to 38^th), brought by drop in two subfactors: prices (down 14 from 33^rd to 47^th) and international trade (down 5 from 37^th to 42^nd). On the positive side, three indicators improved: international investments (up 7 places from 53^rd to 47^th), employment (up 7 places from 26^th to 19^th), and domestic economy (up 1 place from 32^nd to 31^st). This has abated the negative impact of other weak subfactors.

The area of Government Efficiency remained the same (36^th) with three of the five subfactors reported no movements in the latest survey: fiscal policy (15^th), business legislation (57^th) and societal framework (43^rd). The other two indicators, public finance (from 31^st to 34^th) and institutional framework (from 38^th to 41st) both slipped three notches in the ranking.

The Global Competitiveness Yearbook cited major improvements in the overall performance of Philippines which include the indicators Competition Legislation and Starting a Business. This has reflected the recent developments, with the creation of the Philippine Competition Commission and the latest reforms instituted by the Ease of Doing Business Task Force in the business start-up procedures.

Nevertheless , the report noted that the bureaucracy continues to be a hindrance in a business activity. To address this issue, NCC has implemented the Project Repeal, which aims to eliminate red tape in government offices by revoking or amending redundant, costly, and out-of-date rules and regulations. This will allow businesses to be more competitive by lowering the cost of compliance for business and cost of enforcement for government.

Amid the slight drop in the 2016 GCY rankings, NCC remains optimistic about achieving its objective to reach the top-third of the competitiveness survey. The results of this report shall serve as a reminder for us to speed up our efforts to improve in key indicators, so we could catch up with pace of our competitors that are ahead of us.