THE PHILIPPINES’ global economic freedom ranking fell three spots due to lower scores in trade freedom, sound money, and regulation according to a global report measuring 2021 data.

The Philippines placed 70th out of 165 economies in the Fraser Institute’s Economic Freedom Index for 2021, with a score of 7.01, slightly lower than 7.02 in the 2020 index where it placed 67th, according to the report, issued on Sept. 19.

The Fraser Institute is a Canadian conservative think tank.

Philippines' economic freedom rank sinks to record low

The index measures economic freedom based on sound money, size of government, legal system and property rights, freedom to trade internationally, and regulation.

The Philippines was rated highest in the sound money category with a score of 9.51, down from 9.58 in 2020. The category evaluates money growth, inflation, and the freedom to own foreign currency bank accounts.

The Philippines performed worst in its legal system and property rights score at 4.49, a slight improvement from 4.48 a year earlier, with the subcategory score for judicial independence improving slightly.

The Philippine score improved in size of government to 7.91 from 7.82 previously, after an improvement in the top marginal tax rate subcategory.

Manila’s score dipped in the freedom to trade internationally category, to 6.53 from 6.54 a year earlier, due to decline in tariff score.

In regulation, the Philippine score slipped to 6.62 from 6.66, with declines noted in the freedom to compete and business regulation subcategories as bureaucracy costs worsened in 2021, making it more expensive to do business.

The think tank noted that countries in Southeast Asia and Latin America generally scored poorly in the rule of law and property rights categories.

“The nations that rank poorly in this category also tend to score poorly in the trade and regulation areas, even though several have reasonably sized governments and sound money,” the Fraser Institute said.

Singapore replaced Hong Kong as the world’s freest economy with a score of 8.56 against Hong Kong’s 8.55.

The Fraser Institute said that increased military interference in the legal system in Hong Kong led to a 0.20 decline in rule of law to 7.58.

Hong Kong also saw a 0.25 decline in its regulation score to 8.64, with the Fraser Institute citing the increase in the cost of doing business and limits on foreign labor.

The Philippines was rated higher than Indonesia, Cambodia, Myanmar, and Vietnam, but lagged Brunei, Thailand, Malaysia, Hong Kong, and Singapore.

Venezuela was at the bottom of the economic freedom rankings.

“For the government to increase its ranking, it is necessary to let markets and small enterprises be at the forefront of its major decisions,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila, said in a Facebook Messenger chat.

“More players, especially in the agriculture industry should be allowed to participate in the market,” he said.

Mr. Lanzona said the government should focus on addressing the manipulation of agricultural prices, which he said is hindering competition in the industry.

“Stronger institutions of law that ensure a level playing field, not changing the rules in the middle of the game, as well as faster dispute resolution mechanisms in the judicial system should improve economic freedom,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He said the government should fast-track measures that would improve the ease of doing business.

Bienvenido S. Oplas, Jr., founder of the think tank Minimal Government Thinkers, said the index likely reflected the effect of lockdowns on the regulation of businesses in 2021.

“The worst lockdown policies in Asia were done in the Philippines  — massive closure of businesses, public transportation, etc.,” he said in a Viber message. — John Victor D. Ordoñez