Philippines jumps 8 spots in WEF Enabling Trade index

Posted at 04/02/14 11:09 AM

MANILA, Philippines - The Philippines jumped 8 spots in the World Economic Forum's Enabling Trade Index.

The Philippines now ranks 64th out of 138 economies, according to the Global Enabling Trade Report 2014. The country has show significant improvements in enabling trade, rising from 92nd place out of 125 economies in 2010 and 72nd out of 132 economies in 2012.

Among the ASEAN countries, the Philippines ranked 5th in the index, after Singapore (1st), Malaysia (25th), Thailand (57th), and Indonesia (58th).

The Philippines is followed by Vietnam (72nd), Cambodia (93rd), Lao DPR (98th), and Myanmar (121st).

"The country does well on the domestic market access (19th) and foreign market access (26th) pillars, but room for improvement remains with respect to the other five pillars of the index. It ranks in the bottom half of the ETI sample in all of them. Border administration (71st) is mired by corruption and red tape, two factors also contributing to weakening the general operating environment (82nd)," the report noted.

The Philippines' biggest weakness is the lack of adequate transport infrastructure, placing 96th in this category.

"The shortcomings are the most severe in the airport (105th) and port (107th) infrastructure. To make things worse, the availability and quality of associated logistics services remains largely insufficient (84th)," it added.

The Enabling Trade Index “assesses the extent to which economies have in place institutions, policies, infrastructures and services facilitating the free flow of goods over borders and to their destination.” The trade-enabling factors are classified under four categories: market access, border administration, infrastructure, and operating environment.

Makati Busienss Club director Peter Perfecto noted that while there are persistent challenges in certain areas, the Philippines enjoys some advantages in 15 areas.

"Among the 56 indicators comprising the enabling trade index, the Philippines enjoys competitive advantages in the following 15 areas: specific tariffs, tariffs faced, cost to export, cost to import, tariff dispersion, ease and affordability of shipment, available international airline seats in kilometers per week, customs services index, access to finance, share of duty-free imports, number of distinct tariffs, efficiency of clearance process, tariff rate, number of days to import, and ICT use for business to business transactions," he said.

The report also identified the the top five problematic factors for exporting in the Philippines:

1. High cost or delays caused by domestic transportation,
2. access to imported inputs at competitive prices,
3. technical requirements and standards abroad,
4. identifying potential markets and buyers, and
5. difficulties in meeting quality/quantity requirements of buyers.

For importing in the Philippines, the top five problematic factors: are:

1. burdensome import procedures,
2. corruption at the border,
3. tariffs,
4. high cost or delays caused by domestic transportation, and
5. high cost or delays caused by international transportation.

The Makati Business Club is a partner institute of the World Economic Forum in the Philippines.