The Philippines' competitiveness rank in the world slid to 43 from 40 last year among 57 participating countries, according to the 2009 World Competitiveness Yearbook report of the Geneva-based IMD International.

Ma. Lourdes Sereno, executive director of the Asian Institute of Management Policy Center, which released the report on Wednesday, said the Philippines' 3-notch slide was the result of the inclusion two additional participating countries this year—Quatar and Kazakhstan that respectively ranked 14th and 36th—and Indonesia's climb to rank 42 from 51 last year.

Indonesia's dramatic 9-notch climb effectively made it overtake the Philippines this year. "Our slippage is not acceptable because we are being left behind," Special Envoy for International Trade Donald Dee said.

Neighbors Hongkong and Singapore placed second third in the global ranking.

The United States, despite the crisis, remained in the top spot, proving that, in a free fall global economy, it does not matter which country is raising its competitiveness, but competitiveness is also about how countries can resist adversity and show resilience to weather the storm, IMD director Stephane Garelli said.

The survey was based on 300 criteria grouped under economic performance, government efficiency, business efficiency and infrastructure.

Weakness

Philippines is consistently a laggard among peer countries, ranking last among Asia-Pacific countries with population greater than 20 million people, and those with gross domestic product per capita of less than $20,000.

Shows that the Philippines was among the poorest in the following:
- basic infrastructure, rank 57
- international investment, 56
- public finances, 54
- education, 54
- productivity and efficiency, 53
- business legislation, 50

Dee said the Philippines' poor ranking in business legislation can be traced to too much politicking, while monopolies, especially in the energy sector, led the country to rank last in infrastructure. The survey considered water, energy, transportation and projected supply when ranking countries in terms of infrastructure.

Dee also blamed the Philippines' rapid population growth for limiting resource allocation for basic services, which in turn curtail competitiveness. "We have to have a [population] program," he said.

For business transactions, Sereno emphasized that national regulatory policies should be aligned with local reform initiatives

Sereno said the country has to strengthen its domestic market to moderate the impact of the export slowdown.

It has to implement a cohesive political agenda to address jobs andskills mismatch.

Strengths

The report also acknowledged the Philippines' strength, which were
- labor market, 5
- price, 14
- fiscal policy, 13
- societal framework, 20

The Philippines is in the top 10 in other criteria that include growth of exports, cost of living, central bank's monetary policy, skilled labor, flexibility, market size, female position, among others.

In the stress test, a new feature in this year's survey to identify the countries that would fare better during the global crisis, the Philippines ranked 32, or in the middle, of the 57 participating countries. Below is the break down.
- forecast on the economy, 20
- business, 29
- society, 36

"Competitiveness is also about how countries can resist adversity and show resilience to weather the storm," IMD's Garelli said.

"Competitiveness is not just about growth or economic performance but should take into consideration the 'soft factors' of competitiveness such as the environment, quality of life, technology, knowledge, etc. This explains why some countries, the US, Japan, the UK, Nordic economies and small open economies like Hongkong, Singapore and Switzerland are able to maintain their rankings in the top league despite short term disruptions," Garelli added.

Perception-based

Cesar Bautista of National Competitiveness Council, however, said there should be more sensitivity when reading perception-based survey results such as this.

Bautista criticized the items in the survey, saying “it is not clear whether some of the items are causes of competitiveness or manifestations of poverty.” There are “many reasons to invest in the Philippines,” he said after citing the recent survey of Forbes Magazine where the country ranked 70th. “Not bad,” he added.

The data for the Philippines were gathered by AIM Policy Center for IMD International. Through the results, Sereno said, “we are spurred to do better.” The more in-depth results of the World Competitiveness Report are yet to be released on July. -- with report from Riziel Cabreros, Newsbreak