Metro Manila (CNN Philippines) — When President Benigno S. Aquino III assumed office in 2010, the country ranked 85th overall in the World Economic Forum’s (WEF) Global Competitiveness Index (GCI).
In a span of just five years, the Philippines, Aquino noted during his last State of the Nation Address on Monday (July 27), now ranks 52nd in the list.
The jump comes on marked gains in the GCI’s “12 Pillars of Competitiveness” — components that determine the level of a country’s productivity. In particular, the Philippines posted its highest gains in “Institutions” (67th) and “Innovation” (46th) with five-year gains of 46 and 59 places, respectively.
According to the WEF, the Institutions pillar covers the legal and administrative framework where individuals, firms, and governments interact to generate wealth.
“The quality of institutions has a strong bearing on competitiveness and growth. It influences investment decisions and the organization of production and plays a key role in the ways in which societies distribute the benefits and bear the costs of development strategies and policies,” the WEF explained in its 2015 Global Competitiveness Report.
Innovation, on the other hand, refers to the the opening of “a wider range of new possibilities in terms of products and services,” and not just transforming the way things are being done.
The Philippines’ “Macroeconomic environment” was its highest ranking pillar in the index, at 25th place. The pillar involves several aspects of public finance such as inflation, gross national savings, credit ratings, and the management of the government’s budget balance and debt.
Since 2010, the Philippines has posted gains in all but one of the pillars — “Health and primary education,” which covers life expectancy, the prevalence of HIV, malaria, and tuberculosis, and the quality of primary education.
“Investment in the provision of health services is… critical for clear economic, as well as moral, considerations,” the WEF said.
“[O]ften workers who have received little formal education can carry out only simple manual tasks and find it much more difficult to adapt to more advanced production processes and techniques, and therefore they contribute less to devising or executing innovations.”
The country ranked 90th in that category in 2010, and has since slightly dropped to 92nd place. It is the lowest pillar for the country in the 2015 GCI.
The drop stands in contrast to the amount of money the government has allocated to develop such needs. From 2011-2015, the Social Services sector has consistently received the largest share of funds from the National Government’s budget. Its share has actually risen, from about 32% in 2011 to approximately 37% in 2015.
The 2015 figure equates to about P952.7 billion split across five sub-sectors, according to the Department of Budget and Management (DBM):
Education, Culture, & Manpower Development – P453 trillion
Health – P96.3 trillion
Social Security, Welfare & Eployment – P246.7 trillion
Housing & Community Development – P10.3 trillion
Others (e.g. Land Distibution and Local Government Unit Subsidies) – P146.3 trillion
Although Education, Culture, and Manpower Development get the lion’s share of the sectoral budget, the WEF ranked the Philippines 60th in the quality of primary education, and 105th in primary education enrollment.
Nevertheless, the Aquino administration has made efforts to improve the country’s education system. In 2013, the President signed the K to 12 law (RA 10533), which increased the number of years for basic education.
But it with less than a year left before Aquino steps down, it seems that the next administration will reap the benefits of education reform as the K to 12 program is scheduled for full implementation in 2016.
Health gets the third largest share in the sectoral budget. Although the WEF pointed out the 0.1% HIV prevalence rate among Filipino adults, statistics from the Philippine Department of Health (DOH) reveal that HIV cases have been rising in the country.
There were 748 new HIV-positive cases in May this year — 51% higher than the same month last year. The figure is also the highest number reported since 1984. The DOH said that 95% of the cases were asymptomatic.
The WEF ranks the country 100th in terms of health.
