Competitiveness and Competition
Ronald U. Mendoza, PhD
AIM Policy Center
World Competitiveness Yearbook
• Uses over 250 criteria in ranking the
competitiveness of 61 countries (2/3 “hard”
indicators; 1/3 survey data).
• Uses four main factors in competitiveness
ranking: Economic performance (37th to 34th);
Government efficiency (40th to 36th); Business
efficiency (27th to 26th); Infrastructure (59th to
57th)
Philippines IMD World Competitiveness Yearbook
Ranking, 2005 to 2015
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
37
38
38
39
39
40
40
40
41
41
41
42
42
42
43
43
44
45
45
46
Source: International Institute for Management Development World Competitiveness Yearbook.
43
WCY 2015 Ranking of
Selected Asia-Pacific Countries
Country
Rank
Country
Rank
Hong Kong
2nd
Japan
27th
Singapore
3rd
Thailand
30th
Malaysia
14th
Philippines
41st
China
22nd
Indonesia
42nd
South Korea
25th
India
44th
Philippine Ranking in the World Economic Forum Global
Competitiveness Report (144 Countries)
2005
2006
2007
2008
2009
2010
2011
2012
2013
50
55
59
60
65
65
70
73
71
71
71
75
75
80
85
90
87
85
2014
52
Executive Opinion Survey on Factors Most
Attractive in the Philippine Economy
Average Annual Net FDI Inflows,
in Current USD, per Administration
4000
3,790
3500
Millions USD
3000
2500
2000
1,744
1,468
1500
1000
500
1,468
644
117
0
Marcos
(1970 to
1986)
Aquino 1 Ramos (1993
(1987 to
to 1998)
1992)
Source: Computations based on data from UNCTAD and BSP.
Estrada
(1999 to
2000)
Arroyo (2001 Aquino 2
to 2010)
(2011 to
2014)
Average Annual Exports, in Millions 2005 USD,
per Administration
70,000
63,649
60,000
48,783
50,000
37,142
40,000
30,592
30,000
18,212
20,000
10,000
9,727
Marcos (1970
to 1986)
Source: The World Bank
Aquino 1
(1987 to
1992)
Ramos (1993 Estrada (1999 Arroyo (2001
to 1998)
to 2000)
to 2010)
Aquino 2
(2011 to
2013)
Debt-to-GDP Ratio, 1990-2014
80%
75%
70%
65%
60%
55%
50%
45%
40%
Aquino 1
Ramos
Source: Computations based on data from Bureau of Treasury.
Estrada
Axis Title
Arroyo
Aquino 2
ASEAN Transparency International’s Corruption
Perceptions Index
Published rankings
Country
2011
2014
Cambodia
164
156
8
Indonesia
100
107
Laos
154
Malaysia
Adjusted rankings
Change 2011
2014
Change
156
156
0
-7
94
107
-13
145
9
146
145
1
60
50
10
57
50
7
Myanmar
180
156
24
171
156
15
Philippines
129
85
44
122
85
37
Singapore
5
7
-2
5
7
-2
Thailand
80
85
-5
76
85
-9
Vietnam
112
119
-7
106
119
-13
Philippines is ranked 95th out of 185 economies in
ease of doing business
1
18
26
78
95
101
114
135
148
Source: World Bank (2015).
Philippines Ranking in the
Ease of Doing Business Report
2015
2014
2013
138th
136th
2012
2011
2010
144th
148th
108th
95th
Credit Upgrades
Agency
Upgraded to:
S&P
May 2014
BBB
May 2013
BBB-
July 2012
BB+
November 2010
BB
Moody’s
December 2014
BAA2
October 2013
BAA3
October 2012
BA1
June 2011
BA2
Fitch
March 2013
BBB-
June 2011
BB+
Philippine Stock Exchange Index (PSEi)
(1995-2015, daily performance)
Source: The Wall Street Journal.
Need to disaggregate
competitiveness indicators in order
to assess “inclusiveness” of growth
and development
WEAK UPWARD ECONOMIC MOBILITY BECAUSE OF THE
ABSENCE OF A “LEVEL PLAYING FIELD” IN THE ECONOMY
MSMEs account for 99% of business
enterprises, and 65% of eployment.
16
2015 Cities Competitiveness Rankings
Over-all Ranking
Economic Dynamism
Government Efficiency
Infrastructure
Makati
Paranaque
Naga
Davao
Cagayan de Oro
Makati
Iloilo
Cagayan de Oro
Naga
Manila
Angeles
Marikina
Davao
Naga
Makati
Makati
Marikina
General Santos
Cagayan de Oro
Cebu
Iloilo
Mandaluyong
Quezon City
Cebu
Valenzuela
Tagbilaran
San Fernando,
Pampanga
Manila
Caloocan
La Carlota
Angeles
Valenzuela
Cagayan de Oro
Baguio
Pasay
Paranaque
Cebu
Laoag
Manila
Source: National Competitiveness Council (2013)
Iloilo
Labor productivity for selected countries and PH regions
(2013, current USD)
Metro Manila
$21,958.49
Brazil
Thailand
$9,953.28
CALABARZON
$9,153.24
Cordilleras
$7,305.11
Philippines
$7,172.48
Senegal
$3,142.17
Eastern Visayas
$2,838.07
Bicol
$21,284.14
The most productive
Philippine region
mirrors the labor
productivity of Brazil.
The national statistic
does not reflect the
disparity in
productivity of
different regions.
$2,469.82
Bangladesh
The least productive
Philippine region
$1,875.60
mirrors the labor
productivity of
$1,937.69
Cambodia.
$5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00
$2,396.34
Cambodia
ARMM
$-
Note: APC staff computation using data from the National Wages and Productivity Commission; The Conference Board Total Economy
Database (2015); World Bank; and the Philippine Statistical Authority
HDI COMPARISONS BETWEEN SELECTED PROVINCES
AND COUNTRIES (2009-2010)
0.406
Masbate
0.409
Ethiopia
0.461
Samar
REFERENCE: UNDP; 2012/2013 PHILIPPINE HUMAN DEVELOPMENT REPORT
0.300
Maguindanao
0.459
Zimbabwe
0.319
Congo
National Government Spending on Education and Health
(in thousands 2000 PhP)
180,000
171,110
160,000
Education
140,000
Health
116,878
120,000
118,734
93,298
100,000
80,000
62,629
60,000
40,000
20,000
36,492
12,421
29,760
15,800
13,935
15,238
13,250
0
Marcos
Aquino 1
Ramos
Estrada
Arroyo
Aquino 2
(1983-1985) (1986-1992) (1993-1998) (1999-2000) (2001-2010) (2011-2013)
Source: Department of Budget and Management.
FAIR COMPETITION ACT
1. Anti-competitive behavior will be considered a criminal
offense
2. Establishes the Fair Competition Commission to ensure
market efficiency
3. Prohibits firms with big market shares to restrict
competition by selling goods below cost, imposing barriers
to entry, and other “predatory behavior”
4. Prohibits industry players from colluding such that each
firm is allowed to dominate a geographic region
5. Prohibits mergers and acquisitions that restrict
competition
Source: Senate Bill No. 2282, s. 2014
FAIR COMPETITION ACT SEEKS TO PREVENT
1. Anti-Competitive Agreements:
• Price fixing
• Bid rigging
• Monopoly
• Cartel
2. Abuse of Dominant Position:
• Predatory behavior towards competitors
• Limitation and control of markets
• Price discrimination
Source: Senate Bill No. 2282, s. 2014
How much does it cost
between then (1990s)
and now?
Then
Monopoly
Now
Airlines (Manila –
Cebu route)
Php 2000 in 1997
(About Php 4000 in
today’s pesos)
Php 700 today
How much does it cost
between then (1990s)
and now?
Then
Monopoly
Now
Telecom
Php 1/text in 1990s
(Php 2.00 in today’s
pesos)
Php 1/text