The Philippines this year rose to the middle rung of a biennial ease of trade ranking after placing in the bottom third in 2010, with a report noting improved tariff policies and border administration relative to other economies.
The country, however, remained second worst among seven Southeast Asian economies in the World Economic Forum’s (WEF) latest “Global Enabling Trade Report”, dragged down by weakened performances in two other indicators: transport and communications infrastructure as well as business environment.
The Philippines was ranked 72nd out of 132 countries, or in the middle third of the latest range. This compares against its 2010 position in the bottom third when it placed 92nd out of 125.
This year’s report, which the WEF says it publishes “to be a motivator for change and a foundation for dialogue”, argues that policymakers must take a closer look at trade measures at a time when production chains are becoming more global.
The Philippines’ rank was based on scores in four sub-indices. Market access was computed based on indicators such as the weighted average of a country’s tariffs.
Border administration was evaluated based on factors such as time and cost to import and export as well as customs efficiency, gleaned from reports such as the World Bank’s Logistics Performance Survey and the WEF’s Executive Opinion Survey.
The transportation and communications infrastructure sub-index was based on the availability and quality of transport infrastructure and services, as well as use of information and communications technology.
Finally, the business environment score was computed from performance indicators for the regulatory and physical environment such as governance and corruption, extent of foreign ownership, ease of hiring and availability of trade finance.
The Philippines’ rank in terms of market access rose to 14th from 64th in 2010.
“Thailand, Indonesia, and the Philippines have benefited from trade liberalization within the Association of Southeast Asian Nations (ASEAN) and improved in the rankings this year,” the report read.
For border administration, the country improved to 72nd from 74th in 2010.
The Philippines, however, fared poorly in the last two indicators: in the area of infrastructure it ranked 91st (from 83rd) while for business environment it placed 107th (from 103rd).
The country’ overall improvement this year was not enough to move it up among its regional peers. It did only better than Cambodia (102nd) and was outranked by Singapore, which topped the global ranking, Malaysia (24th), Thailand (57th), Indonesia (58th) and Vietnam (68th).
The top ten countries on the list next to Singapore were Hong Kong, Denmark, Sweden, New Zealand, Finland, the Netherlands, Switzerland, Canada and Luxembourg.
The ten worst-performing countries, on the other hand, were Chad, Burundi, Venezuela, Zimbabwe, Haiti, Angola, Cote d’Ivoire, Mauritania, Nepal and Nigeria.
The report went on to state: “Asia and the Pacific is host to some of the fastest-growing and largest economies worldwide. Many of the countries in the region have greatly benefited from trade and made it a central part of their growth strategy.”
It noted, however, that there remained a wide gap between frontrunners and the rest of the region.
“Except for those in the top 10 and Australia (17th), countries stay outside the top 20, with China at 56th position and India at a low 100th. The key challenge for both these countries is to liberalize restrictive trade policies,” the report read.
Sought for comment, Trade Secretary Gregory L. Domingo told BusinessWorld on Friday that the country’s improved ranking was “a welcome development.”
“I think the world is recognizing our efforts at doing business in free trade areas, contributing to the better market access index,” Mr. Domingo said.
He added that the government was also continuously working on improving the business climate for both importers and exporters.
“On this front, one of the major programs is easier business registration through the Philippine Business Registry,” Mr. Domingo said, referring to a system which integrates registration mechanisms in the Trade department and other key agencies.
Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr., meanwhile, told BusinessWorld on Thursday that his group had expected the improvement.
“Since the establishment of the National Competitiveness Council, one of the things the government has been pursuing is the improvement of customs and other policies to open up the country to global trade,” he said.
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Source: BusinessWorld, May 26, 2012
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