Competitiveness still low THE PHILIPPINES has slipped anew in terms of global competitiveness, with poor infrastructure and government inefficiency eclipsing gains made in economic performance and business competence. While the country improved its score -- by over six points to a total of 63.291 from 56.526 last year -- in the latest edition of the World Competitiveness Yearbook (WCY), it still fell to 41st out of 59 economies from 39th place last year as other economies posted stronger gains. The country was also ranked the least competitive in the Asia-Pacific region for the third straight year in the WCY, produced annually by the Switzerland-based Institute for Management Development (IMD) and released locally yesterday. The Philippines’ ranking has fluctuated in lower third of the list in the last five years. It was 45th in 2007, improving to 40th the year after and then sinking to 43rd in 2009. The latest result came as the country’s National Competitiveness Council (NCC) set a 2016 target of inclusion in the top 30 or 50 after missing a 2010 goal of a top third placing. The United States and Hong Kong jointly took first place in the latest rankings with a perfect score of 100. Last year’s topnotcher, Singapore, slipped to third with a score of 98.557. Taiwan, Australia, Malaysia, China, New Zealand, Korea, Japan, Thailand, India and Indonesia also ranked above the Philippines in the Asia-Pacific region. The WCY ranks economies from most to least competitive using four criteria: economic performance, government efficiency, business efficiency and infrastructure. The Philippines enjoyed a significant jump in its economic performance this year, going up five notches to 29th. This was propelled by the country’s 7.6% gross domestic growth last year and a strong rebound in exports. The country, however, still suffers from a lack of foreign direct investments. Business efficiency was also boosted this year through improvements in the productivity, efficiency and attitudes of the labor force. The Philippines climbed up one notch in the list to 31st. "The Philippine labor force is well-educated and speaks good English, which is good especially for business process outsourcing," IMD Deputy Director Suzanne Rosselet-McCauley said in a presentation. There was, however, a marked decline in government efficiency as the country sank to 37th from last year’s 31st. Fiscal policy, institutional framework, social framework and business legislation were listed as areas for improvement. Current regulations also make it difficult for business to compete domestically and internationally, Ms. McCauley said. "Business efficiency is outpacing government efficiency. The Philippines will be able to increase its competitiveness if it synchronizes both," she said. The country also dropped one notch to 57th in terms of infrastructure due to inadequate facilities, particularly for science and education. "There is a lack of emphasis in research and development. The government should also work for greater access to education and increase investments in energy and transportation infrastructure," Ms. McCauley noted. The public-private partnership (PPP) program could help bridge the infrastructure gap, Philippine Constructors Association, Inc. Executive Director Manolito P. Madrasto yesterday said. However, unclear PPP guidelines on risk-sharing and guarantees could turn away interested businesses, he warned. "We have a bad reputation of shirking on our contracts, so the government has to make an effort to make clear and certain rules regarding the PPP to assure investors," Mr. Madrasto said. The Aquino administration’s proposed K-12 education program could also improve the quality of education in the country, University of the Philippines economist Benjamin E. Diokno said in a press conference. "We will not see the effects overnight, but it is a good start," he said. The government should work on its deficiencies as soon as possible because last year’s growth and export rates are not sustainable, Mr. Diokno added, as these came from a low base. NCC co-chairman and private sector representative Guillermo M. Luz said the latest rankings were a "good wake-up call" for the Philippines. "We are moving with small steps in the beginning, but there will be bigger and faster steps in the future as we get more government agencies involved," he told BusinessWorld. -- DCJJ
"Once all our investments under the global investments program (GIP) are in the country, we plan to put... [these] in the stock market, bond market... real estate investment trusts, the government’s public-private partnership program and the central bank’s special deposit accounts," GSIS Robert G. Vergara told reporters. The state pension fund in 2008 opened the GIP, a facility intended to generate additional income to meet future claims and benefits. Of the total $1 billion allocated, some $600 million was invested in markets overseas via foreign fund managers such as Pimco. Mr. Vergara said the GSIS was repatriating its overseas investments because it failed to generate the 8% return set when the program was first implemented. "It is not clear now how investing abroad would give GSIS a good return... given all the inflation issues in China and India and the geopolitical problem in the Middle East and the debt crises in the US and the euro zone," he said. Some two-thirds of the $670 million has been returned to the country, Mr. Vergara said. |
U.S. Stocks Advance Amid Easy Fed Policy as Commodity Prices Move Higher U.S. stocks rose, snapping a three- day drop, as the Federal Reserve signaled continued low interest rates, commodities rebounded and earnings at companies including Dell Inc. (DELL) beat analyst estimates. Chevron Corp. (CVX) and Monsanto Co. (MON) advanced at least 2.4 percent as commodities climbed for the first time in three days amid signs of increasing demand. Dell, the world’s second- largest computer maker, jumped 5.4 percent as corporate spending helped the company withstand a slump in consumer demand. Teen retailer Abercrombie & Fitch Co. (ANF) increased 3.4 percent as earnings beat analysts’ projections. The Standard & Poor’s 500 Index rose 0.9 percent to 1,340.68 at 4 p.m. in New York, after losing 1.5 percent over the last three days. The Dow Jones Industrial Average added 80.60 points, or 0.7 percent, to 12,560.18. Stocks extended gains as records from the Fed’s April policy meeting said that talks about an exit strategy from record stimulus measures don’t mean monetary tightening “would necessarily begin soon.” “I see a lot of green on my screen,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York, which manages $2 billion. “We got Dell as a turnaround story. Commodities were looking for an opportunity to bounce and traders will take advantage of it. In addition, the Fed wants to encourage the movement of assets out of fixed income and into equities by keeping rates low.”
The difference between the yield on 10-year notes and inflation-indexed securities, a gauge of expectations for consumer prices over the life of the debt, widened after reaching the narrowest level in three months as stocks and commodities rallied. Minutes of the Fed’s meeting showed most policy makers favored an exit strategy of raising interest rates before selling assets. “There was consensus that selling the assets they have been purchasing is not necessarily the first step in the process of normalization, which gives the market some insight into how it will exit the easing,” said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo & Co. in Milwaukee. Yields on 10-year notes increased six basis points, or 0.06 percentage point, to 3.18 percent at 5:14 p.m. in New York, according to Bloomberg Bond Trader prices. The 3.125 percent note due in May 2021 dropped 1/2, or $5 per $1,000 face amount, to 99 17/32. The yield fell earlier to 3.09 percent, the lowest level since Dec. 7. The 30-year bond slid more than one point, pushing the yield up to 4.29 percent after touching 4.20 percent, the lowest level since Dec. 1. The two-year note yield rose three basis points to 0.55 percent. |
Crude Trades Near One-Week High After Unexpected Dropp in U.S. Stockpiles Oil traded near the highest in more than a week in New York after a government report showed an unexpected drop in U.S. crude inventories on increased refinery operating rates and a decline in imports. Futures were little changed after climbing 3.3 percent yesterday. The Energy Department said stockpiles slipped 15,000 barrels last week to 370.3 million. Supplies were projected to rise 1.7 million barrels, according to analysts surveyed by Bloomberg News. Prices advanced 9 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya. “There’s plenty of oil out there but continued unrest is going to keep prices around $100,” said Chip Hodge, who oversees a $9 billion natural-resource bond portfolio as senior managing director at Manulife Asset Management in Boston. “Libyan oil will remain off the market for the foreseeable future, and that’s just one trouble spot.” Crude for June delivery was at $99.83 a barrel, down 27 cents, in electronic trading on the New York Mercantile Exchange at 9:14 a.m. Sydney time. The contract yesterday advanced $3.19 to $100.10, the highest settlement since May 10. Prices are up 43 percent the past year. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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