Selda Numero 10: Competitiveness

February 23, 2017

 


AMIDST the raucous created by a post in Facebook that says that Legazpi has overtaken Naga by a small percentage point in the top list of the most competitive component city nationwide, let me refresh our readers with some salient points related to the competitiveness ranking and for what purpose was it established in the first place.

The Cities and Municipalities Competitiveness Index (CMCI) is an annual ranking of Philippine cities and municipalities developed by the National Competiveness Council, through the Regional Competitiveness Committees with the assistance of the United States Agency for International Development. The Index measures competitiveness at the local government level using 28 indicators grouped into three-weighted pillars: Economic dynamism, government proficiency, and infrastructure. This year, after its fifth year of existence, the index, we are told, will include a fourth pillar: Resilience. The organizers argue that adding Resilience is key factor in determining an LGU’s competitiveness where stakeholders will devote more time and energy to develop greater capabilities and sustainability in the light of climate change, environment disruptions, and man-made crisis, such as war and civil conflict.

The Index ranks highly-urbanized cities, component cities, and 1st to 2nd class and 3rd to 6th class municipalities, respetively. It was only in 2015 that ranking of provinces was introduced.

Local competitiveness is a building block of national competitiveness. Reportedly for this year, the NCC has expanded the Cities/Municipalities Competitiveness Index to now cover almost 1,400 LGUs across the country in just four years with Resiliency and Sustainability as the fourth criterion in the competitiveness evaluation process.

According to Guillermo Luz, co-chair of the NCC, scores for economic dynamism are based on the size and growth of the local economy, capacity to generate employment, cost of living, cost of doing business, financial deepening, productivity, and presence of business and professional organizations.

Government efficiency, on the other hand, is measured based on data from transparency scores, local taxes and revenues, local competition-related awards, business registration efficiency, investment promotion, compliance to national directives, and health and education.

Infrastructure scores are measured by data on existing road network, distance from the city center to major ports, health infrastructure, education infrastructure, DOT-accredited accommodations, availability of basic utilities and number of transportation vehicles, ICT connections, and number of ATMs.

Luz said it is important for all stakeholders (private and public sectors) to work together to build cities and municipalities that are affordable, accessible, socially acceptable, environmentally friendly, economically viable, climate resilient, and competitive.  What makes the Index more significant is that it is not based on public opinion surveys or boards of judges. It is based solely on statistics and data collected per LGU as the organizers themselves tried to remove as much subjectivity as possible in any selection, Luz would emphasize.

The results highlight the importance of being competitive in several factors, especially those which are closely examined by potential investors. Furthermore, the Index was designed to encourage local governments to regularly track data and eventually benchmark performance against other cities in the Asean to better manage their regions.

Over the last 6 years, Luz said they   have tracked the country’s competitiveness ranking across a series of global competitiveness reports to see how we compare against other countries. These reports range from well-known ones like the World Economic Forum’s Global Competitiveness Index, the World Bank-IFC’s Ease of Doing Business Report, Transparency International’s Corruption Perceptions Index, and the Heritage Foundation’s Economic Freedom Index to the less well-known like the Failed States Index and Logistics Performance Index.

When many of these reports were first established, some of them as far back as the 1990s, the Philippines, according to Luz, ranked deep in the bottom 20 percent of world rankings. “Even as recently as 2011, we ranked in the bottom 30 percent of virtually all major reports, with the only exception I know being the Gender Gap Report (where we currently rank seventh in the world).  Our modest goal in 2011 was to move the country into the top-third of world tables.”

He said that looking back at our performance and the annual data releases, “we have indeed improved—but we haven’t made it into the top-third yet. We have managed, though, to get out of the bottom 30 percent and move into the middle-third for most of these indices. Our performance in 2016 indicates continuous improvement across most indices, though not all.”

He emphasized that being more competitive essentially makes the country more attractive for investments and new business generation. Most countries which rank higher than us in the region, he pointed out, generate much more direct investments than we do, sometimes five or six times as much.



 

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