US-based think tank lauds liberalization, easier business licensing procedures, reduced corruption
The Philippines has scored anew in the area of “economic freedom,” being recognized internationally for the sustained improvement in the capacity of its citizens and investors to own properties, to generate income, to consume goods and services, and to do business.
In the 2015 Index of Economic Freedom, an annual global survey conducted by US-based think tank Heritage Foundation, the ranking of the Philippines leaped by six places to 70th out of 178 countries from the previous year’s 76th.
The Philippines is one of the most improved countries over the past six years, with its global ranking jumping by a total of 45 notches since 2010.
The latest global ranking of the Philippines was made possible by its latest score of 63.1 points out of 100 points, better than the 62.2 points recorded the previous year. With the latest score, Heritage Foundation describes economic freedom in the Philippines as “moderately free.”
“The Philippine economy has been growing steadily at an average annual rate above 6 percent the past five years. The government has pursued legislative reforms to enhance the entrepreneurial environment and develop a more vibrant private sector to generate broader based job growth,” Heritage Foundation said in the report released Monday.
The country’s economic officials welcomed the positive development, which reflected the virtuous cycle consisting of reforms, improving perception of investors and third-party observers like Heritage Foundation, and economic development.
Finance Secretary Cesar V. Purisima remarked: “Underpinning the country’s improvement across virtually all global measures is guiding philosophy behind the Aquino administration: good governance. Over the past 6 years, we have worked to better our institutions and improve business environments to facilitate robust private sector growth.
The consistency of results and recognition in the past 5 years mean only one thing: we must keep the faith in our governing principles. We will continue to expand the field of economic opportunity to enlarge the share of Filipinos benefiting from and contributing to the gains we are making.”
National Competitiveness Council Co-chair Guillermo Luz remarked, “Aware of the crucial role played by an enabling environment to investment generation and to improving the lives of Filipinos, making the Philippines a globally competitive place of business has been among the top agenda of government over the past six years.”
“This latest international recognition of the country’s improving economic freedom may be credited partly to coordinated efforts of government agencies and local government units, which the NCC has engaged over the years to continually improve processes for businesses,” Luz added.
Heritage Foundation evaluates the level of economic freedom of countries based on the following 10 components: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom.
The think tank said the Philippines posted the biggest gains in “business freedom,” as licensing requirements for enterprises have been eased.The country registered a 32-notch improvement in its ranking under this component, or from 131st to 99th.
“The time involved in dealing with licensing requirements has been notably reduced, and the cost of completing them has been cut,” Heritage Foundation said.
It also said the Philippines registered significant improvement in the area of “freedom from corruption,” consistent with the implementation of good governance reforms in line agencies of government. Its ranking in this component improved by 8 notches, or from 95th to 87th.
Another area of marked improvement, the think tank said, is “trade freedom” amid efforts to further open up the economy to investments, such as an environment that now allows foreigners to fully own and operate banks in the country. The Philippines’ ranking in this component improved from 99th to 94th.
For Heritage Foundation, monitoring progress of economic freedom globally is important in that it allows people to engage in economic activities without unnecessary constraints, thereby helping boost incomes and accelerating progress.
In the case of the Philippines, the improvement in its economic freedom came along with solid growth performance of the economy.
Touted as one of the most resilient emerging markets in the world, the Philippines posted an average growth of 6.2% from 2010 to 2015 despite a challenging external environment.
