PHL competitiveness to depend on pace of infra upgrades — think tank

By Justine Irish D. Tabile, Reporter

THE Philippines’ ambitions for attracting investment will hinge on improvements to its digital and physical infrastructure, according to the Asian Institute of Management’s (AIM) competitiveness  policy center.

Jamil Paolo S. Francisco, executive director of the AIM Rizalino S. Navarro Policy Center for Competitiveness, told BusinessWorld that the Philippines will have to do better in indicators like annual global competitiveness rankings, parts of which measure infrastructure quality.

Asked for his recommendations, he said: “I guess the most basic one is really infrastructure. Not just physical infrastructure, but also digital and human infrastructure.”

“We are lagging there. So, we have to make it faster, and we have to do more,” he added.

Citing the 2024 World Competitiveness Ranking (WCR) by Switzerland’s International Institute for Management Development, he said infrastructure can be classified into four parts: basic, human, scientific, and social.

The index placed the Philippines 52nd out of 67 economies, retaining its spot from last year. In terms of the components of the rankings, the country ranked the lowest in infrastructure at 61st, down from 58th last year.

“10 or 15 years ago, there was already a long list of things we had to check in the infrastructure pillar,” said Mr. Francisco. “Now, it not only involves hardware but also software.”

He said that previously, the Philippines had to deal with basic infrastructure like roads and bridges, but now the country has to also build the digital infrastructure needed to facilitate e-commerce, among others.

“So, the list that we have to fulfill just keeps getting longer. Unfortunately, we’re still lagging on that long list,” he added.

In the 2024 WCR, the Philippines ranked 62nd in basic infrastructure, 55th in technological infrastructure, and 60th in scientific infrastructure.

“If we fare low in these indicators, then we are not as competitive. Because increasingly, remember, it’s a perception game.”

He said that investors will also weigh these factors when choosing the countries they will be investing in.

Citing cybersecurity as an example, he said that it is a component of the technological infrastructure pillar, in which the Philippines ranked 58th.

“Unfortunately, maybe in the Philippines, we haven’t been able to prioritize cybersecurity, and we are just still trying to address it,” Mr. Franscisco said.

“In other countries, they are more advanced in terms of their awareness and their appreciation of the need to address it, and investors will expect that of countries where they invest, and so if we fare low there, then we are perceived as less competitive,” he added.

Besides improving infrastructure, he said that the Philippines will also have to work on the “right messaging.”

“We keep saying that competitiveness rankings are partly based on perception surveys, and that’s important because, as an investor, you make a decision based on data. But you also make a decision based on gut feel and your perception of a country,” he said.

“So, we need to do an even better job of communicating clearly why it makes sense to do this in the Philippines. Communicating our commitment to reform, to the promises that we’ve made, to investments in basic infrastructure, and whatnot,” he added.