The Philippines climbed four spots in an annual global competitiveness report by Switzerland-based International Institute for Management Development (IMD), due to the economy’s improved performance. IMD’s 2022 World Competitiveness Yearbook ranked the Philippines 48th out of 63 economies, from the 52nd spot out of 64 economies in 2021. This was the Philippines’ highest ranking in two years or since placing 45th in 2020.
While the country continued to lag behind its neighbors (placing 13th among the 14 Asia-Pacific economies in the index for the fifth straight year), UA&P economist Dr. Cid Terosa said in an interview with BusinessWorld that the country’s improved ranking sends a positive signal to potential investors.
“The ranking of the Philippines improved because of its better economic performance and improved state of infrastructure. In particular, increasing real GDP growth, higher gross capital formation, evident macroeconomic stability, and greater employment creation propelled the Philippines to a higher ranking,” he said.
Dr. Terosa also said the incoming administration of Ferdinand “Bongbong” Marcos, Jr. can further boost the competitiveness ranking by addressing corruption, sustaining infrastructure development, lowering unemployment, stabilizing inflation, reducing poverty, among others.
PH tourism share increases
The share of the tourism industry to the Philippines’ economic output inched up in 2021, as domestic travel restrictions eased alongside the increase in coronavirus disease 2019 (COVID-19) vaccination rates. Preliminary data compiled by the Philippine Statistics Authority (PSA) showed that tourism’s direct gross value added (TDGVA) accounted for 5.2% of GDP in 2021, slightly higher than the revised 20-year low 5.1% of GDP in 2020.
Measuring the tourism-related value created by various industries, the country’s TDGVA was estimated at P1 trillion at current prices, up by 9.2% from the revised P917.20 billion in 2020. Dr. Terosa told BusinessWorld the more relaxed mobility restrictions helped drive the tourism sector’s slightly better performance last year.
“Tourism-related activities that were choked by the pandemic in 2020 started to regain their vim and vigor in 2021,” he said.
Dr. Terosa believes that the tourism sector will continue to perform better this year, as long as mobility restrictions and alert levels remain at their most lenient.
“Revenge travel or vacation vengeance will continue to gradually gain momentum this year. Inflationary pressures, however, threaten to curb further rise in tourism demand,” he said. “Given the current situation, however, the tourism sector will probably have a clearer chance to exceed pre-pandemic levels in 2023 and 2024.”