By Justine Irish D. Tabile, Reporter

THE PHILIPPINES fell to near bottom in an annual global ranking of countries’ ability to attract and retain a skilled workforce, amid a decline in the quality of life, the Institute for Management Development (IMD) World Competitiveness Center said.

In the IMD’s World Talent Ranking (WTR) 2025, the Philippines slipped a spot to 64^th out of 69 countries. Last year, it ranked 63^rd out of 67 economies.

This was the Philippines’ worst showing in 20 years or since 2005.

The Philippines’ talent competitiveness also continued to lag behind Asia-Pacific neighbors. It ranked 13^th out of 14 Asia-Pacific countries, better only than Mongolia (69^th overall).

Hong Kong (4^th) was the highest-ranking economy in the Asia-Pacific. It was followed by Singapore (7^th), Taiwan (17^th), Australia (19^th), Malaysia (25^th), New Zealand (33^rd), South Korea (37^th), China (38^th), Japan (40^th), Thailand (43^rd), Indonesia (53rd), and India (63^rd).

The global talent index was again dominated by European economies led by Switzerland (1^st overall), Luxembourg (2^nd), and Iceland (3^rd).

The WTR rankings are based on three factors: “appeal,” or the ability of the economy to attract foreign talent and retain local talent; “investment and development,” which refers to the measurement of resources allotted to develop a homegrown workforce; and “readiness,” or the quality of the skills in a country’s talent pool.

The Philippines saw a decline in all factors, dropping two places to 66^th in investment and development. It slipped two spots to 56^th in appeal and fell six places to 58^th in readiness.

“Generally speaking, the Philippines is a net exporter of talent. And it means that it will always find it difficult to retain the homegrown talent in the country,” Arturo Bris, director of the World Competitiveness Center and professor of finance at IMD, said at a hybrid press briefing on Monday.

“At the same time, interestingly, if you look at our indicators, the Philippines ranks 13^th in the availability of skilled labor in the country. So, it seems that executives and leaders in the country do not feel that they don’t find the talent that they would need,” he added.

LOW QUALITY OF LIFE
Mr. Bris noted the country has steadily declined in the rankings over the last few years and lagged in competitiveness mainly due to low quality of life in the Philippines versus its regional peers.

“I think the main driver is a declining quality of life. And again, remember that quality of life encompasses many different factors,” Mr. Bris said.

“The quality of life in the country, especially compared to other neighbors, like Thailand, Singapore, or Indonesia, is lower,” he added.

In particular, he said that the quality of life in the Philippines ranked 60^th out of 69 economies. It ranked 49^th in exposure to pollution, and 31^st in management remuneration.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said that the country’s low ranking in the talent index “reflects chronic underinvestment in education, weak training systems, and poor talent retention.”

“Compared with Asia-Pacific peers like Malaysia or Singapore, we lag behind in both talent readiness and quality of life. To catch up, we must improve public spending on education, build industry-relevant skills, and make our economy more attractive to high-value talent,” he said in a Viber message.

Misiek Piskorski, dean of executive education and professor of digital strategy, analytics, and innovation at IMD, said that much of the Philippines’ success is mainly due to its cheap labor.

While many multinational companies set up back-office operations in the Philippines, this is now under threat due to increasing adoption of artificial intelligence (AI) in the business process outsourcing sector.

“One of the big worries that I have for Manila… is to what extent, again, AI will substitute many of these jobs,” Mr. Piskorski said.

“Will the Philippines be ready with enough workforce and enough skilled workforce to provide the next generation of services? That is my big concern,” he added.

To address these concerns, he said that there is a need for more focused investments.

“To me, the Philippines is always Manila, and the rest of the country is very, very different. And so, we also have to start thinking about what we do in Manila and what we do across other islands that might be far away from Manila and upskill people there to get things going,” he said.

Management Association of the Philippines (MAP) President Alfredo S. Panlilio said the quality of the workforce can be addressed by improving curricula across schools.

“I think an important aspect is how do you fix the curricula of the schools, from public to private, to make it relevant to the demands of the current workforce,” he told reporters on the sidelines of the 23^rd MAP International CEO Conference on Tuesday.

“Because although there are a lot of available positions, the companies cannot hire or don’t hire because they can’t find the talent that they’re looking for. So, it’s really about human capital,” he added.

During his stint with the Private Sector Advisory Council, Mr. Panlilio said he recommended focusing more on science, technology, engineering, and mathematics programs.

“Because AI is technology, we have to have the skill sets for our youth to develop those kinds of skills,” he said, adding that it is still uncertain what jobs will be created in the future,” he said.

He said the MAP taps academics to join committees within the organization, especially when doing research and in understanding data.

“So, we’re trying to bridge that, making sure that there’s a link or alignment between the educational system and what the corporates, and even the public sector, need down the road,” he added.