DoF: IMD’s competitiveness ranking of PHL ‘not backed by data’

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PHOTO taken November 11, 2011 shows the Bonifacio Global City skyline in suburban Manila. — AFP

THE DEPARTMENT of Finance (DoF) disputed the results of International Institute of Management Development’s (IMD) latest World Competitiveness Rankings report after the Philippines’ ranking declined while data show otherwise.

In a statement on Tuesday, May 29, Finance Undersecretary Gil S. Beltran, said that findings “are not backed up by actual data.”

The research group of Switzerland-based business school IMD ranked the Philippines’ competitiveness at 50th out of 63 countries, noting “declines in tourism and employment, the worsening public finances and a surge in concerns about the education system.”

“First, while IMD says tourism and employment has declined, the country’s employed persons rose 6.1% in January 2018 and unemployment rate dropped to 5.3%, the lowest since the country started compiling unemployment statistics,” Mr. Beltran said.

“Also, international tourist arrivals to the Philippines rose by 16.1% to 1.4 million visitors for the period January-February 2018 compared to its level in the same period last year. In 2017, Philippine tourists reached an all-time high of 6.6 million,” he added.

“Second, the claim that the state of public finance is worsening is simply laughable. The statement by the IMD reflects gross research incompetence. We won’t go to lengths to dispute such statement regarding our fiscal affairs but would like to refer to other third party assessments–credit rating agencies and the IMF. If the state of our public finance was really deteriorating, credit rating agencies would have taken notice and have downgraded us accordingly. But no, we’re still investment grade!” said the DoF official.

“What the IMD sorely misses, however, is its failure to distinguish between short-term adjustments and long-term prospects and has mistaken the former for loss in competitiveness,” he added.

“In short, the ratings methodology employed by IMD mechanically ranks cold numbers without understanding the dynamics of the economy. The result is that rankings tend to be volatile. Neither does it use benchmarks with which to gauge relative performance. Nevertheless, the dip in ranking is still a wakeup call, notwithstanding its being a false alarm in some respects. We do recognize the real issues such as red tape and insufficiency in infrastructure and we are working hard to address those. We are encouraged by the progress we have made even if these have not been captured by the ratings yet.” — Elijah Joseph C. Tubayan