THE PHILIPPINES slipped three notches to 64th place in a global assessment of the economic wealth and well-being of 110 nations, the London-based Legatum Institute said in a report released yesterday.
The Prosperity Index 2010 took into account eight factors considered as "foundations of prosperity that define successful nations". The countries included in the ranking make up 90% of the world population and 97% of global gross domestic product (GDP).
Nathan A. Gamester, research assistant at Legatum, told BusinessWorld the report used data from 2008-2009 and surveys in 2009 and 2010.
Norway, Denmark, Finland, Australia and New Zealand topped the list, while Nigeria, Ethiopia, Central African Republic, Pakistan and Zimbabwe were at the bottom.
"The recession has had an impact on how well many countries perform on economic measures but the Prosperity Index finds countries that are able to foster a strong culture of entrepreneurship are best positioned to overcome the current financial difficulties," Ashley Lenihan, senior fellow at Legatum, said in a statement.
The Philippines, down from an overall rank of 61st last year, placed 52nd in terms of the economy, 69th in entrepreneurship and opportunity, 55th in governance, 60th in education, 81st in health, 85th in safety and security, 56th in personal freedom and 82nd in social capital.
Of the seven Association of Southeast Asian Nations included, the country ranked fifth overall, higher than Indonesia (70th) and Cambodia (95th) but lower than Singapore (17th), Malaysia (43rd), Thailand (52nd) and Vietnam (61st). Not covered were Brunei, Laos and Myanmar.
The report noted the Philippines’s poor economic fundamentals but also its high level of high-tech exports, said to have accounted for nearly two-thirds of total manufactured goods.
"Over two-thirds of the population are satisfied with their standards of living, which places the country above average, while 73% are optimistic about employment opportunities where they live," the report said.
It also said most Filipinos saw entrepreneurial opportunities as available despite high start-up costs.
"Economic development is unevenly shared across different socioeconomic groups in the Philippines, with the country placing 71st on this variable. However, 88% think that working hard allows people to get ahead in life," it added.
A majority was said to be satisfied with the government’s approach in dealing with the poor.
"...[P]ublic confidence in the national government is at 63%. Further, a very high 78% and 84%, respectively, are satisfied with their country’s efforts to deal with poverty and preserve the environment, on which variables the Philippines rank fourth, globally," the report said.
Corruption in the government and businesses are perceived as a "moderate problem."
In terms of education, the report said huge class sizes and low rates of enrolment did not dampen satisfaction with the quality of the educational system.
However, the Philippines lagged in terms of health. The institute said public health provision in the country was poor and satisfaction was correspondingly low.
In terms of safety and security, "the Philippines suffers security problems as a result of refugees and internally displaced people, as well as group grievances and demographic instability -- resulting from border disputes, ownership or occupancy of land, access to transportation outlets, control of religious or historical sites, or proximity to environmental hazards -- placing the country in the worst third of the index on all of these variables."
"Two-thirds of Filipinos feel safe walking down the street at night. However, Filipinos tend to think that many people are afraid to express their political views, placing the country 84th on this variable," the report said.
The Philippines ranked 53rd in terms of freedom of speech, associational and organizational rights and other civil liberties but perceptions of tolerance of outsiders, however, was said to "fairly low."
Social trust was also low in the country, although the levels of volunteering were high.
"Perhaps reflective of high levels of violence, just 13% of Filipinos feel able to trust others in general, placing the country 79th in the world," the report said. -- Jo Javan A. Cerda
Economic freedom said to have sunk
ECONOMIC FREEDOM in the Philippines suffered when the global crisis broke out in 2008, according to an annual ranking that downgraded the country eight notches down to 76th out of 141 economies.
Volatile inflation which "made it virtually impossible" for firms and individuals to safeguard their assets was among the key factors for the Philippines’ poorer showing as were its restrictions on trade, an Economic Freedom of the World report released last month stated.
The country’s index score dipped to 6.77 from 6.92, mirroring the fall in the global economic freedom average which was said to have retreated for the first time in decades.
The report was prepared by the Economic Freedom of the World Network, a group of think tanks including the University of Asia and the Pacific’s Center for Research and Communication. It used hard data and opinion surveys from international organizations.
Rankings were based on showings in five areas: extent of state spending, the legal system’s ability to secure property, access to sound money, openness to trade, and regulation of credit, labor and business.
The Philippines’ score fell in three of the five indicators. When adjusted to account for the entry and exit of economies in the rankings throughout the years, the Philippines was 66th, down four spots from 2007.
Among the seven Southeast Asian countries, the Philippines placed third above Malaysia, Indonesia, Vietnam and Myanmar. But it trailed Singapore and Thailand.
Hong Kong retained the highest rating at 9.05 out of a possible 10. Others in the top ten were: Singapore, New Zealand, Switzerland, Chile, the United States, Canada, Australia, Mauritius and the United Kingdom.
Zimbabwe was at the bottom.
"Access to sound money" -- measured mostly in terms of inflation -- was the area where Philippines’ performance worsened the most.
Philippine scores in terms of freedom to trade internationally and the efficacy of the legal system likewise dipped as these were dragged down particularly by tariff policies and perceptions of biased courts.
Slight improvements in government spending and business regulations were unable to offset the deterioration in the rest of the factors.
Local business groups, however, are optimistic that the country’s ranking will improve.
While noting inconsistencies between national and local government policies, Philippine Chamber of Commerce and Industry President Francis C. Chua said, "the economy is good."
Foreign business chambers were likewise heartened by indications from the new administration.
"If we look at the same data in some years’ time, we would have moved upwards," European Chamber of Commerce of the Philippines Executive Vice-President Henry J. Schumacher said.
"We will have improved rapidly," American Chamber of Commerce of the Philippines Executive Director Robert M. Sears said. -- Jessica Anne D. Hermosa
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