MANILA, Philippines - The Philippine economy still remains 'mostly unfree' based on the Heritage Foundation's 2013 Index of Economic Freedom released on Monday, January 14.
However, the Washington-based think tank said the Philippines improved its ranking to 97th with a score of 58.2 from last year’s ranking of 107th and a score of 57.1.
It added that the country ranks 17th out of 41 countries in the Asia–Pacific region, and its overall score is slightly below the world average of 59.6.
The Heritage Foundation explained that economic freedom is present in a country where every citizen is in control of his or her own labor and property. Every citizen is free to work, consume, invest in any way they please and unconstrained by the state.
"Nevertheless, institutional challenges require deeper commitment to reform. Although the perceived level of corruption has declined in recent years, more effective anti-corruption measures need to be institutionalized. The inefficient judiciary remains susceptible to political interference and does not provide strong and transparent enforcement of the law, undermining prospects for long-term economic development," the Heritage Foundation said.
Presidential Spokesperson Edwin Lacierda said the Aquino administration was still encouraged by the results of the survey since the country still improved in its rankings.
Lacierda highlighted that within the ASEAN, the Philippines showed the biggest improvement in its score of 1.1 points. Singapore was ranked 1st in the ASEAN and 2nd worldwide. Hong Kong topped this year's survey.
"This prominent international evaluation shows continued improvement in the business of governing our country. We take this as an affirmation of the goals we have set out to achieve and a recognition of how far we have gone to realize the potentials of our people and country," Lacierda said in a briefing.
Economic freedom is measured based on 4 pillars - Rule of Law, Limited Government, Regulatory Efficiency, and Open Markets.
Based on its aggregate score, each of 177 countries graded in the 2013 Index was classified as “free” (combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
The Philippines did the best in the Limited Government pillar where it saw its index scores for government spending and fiscal freedom increase to 90.2 and 79.3, respectively.
The country did poorly in the regulatory efficiency pillar, which measured the ease of doing business, monetary freedom, and labor freedom. The country's index scores for business freedom, monetary freedom, and labor freedom declined to 53.1, 51, and 76.6, respectively.
"The business start-up process remains time-consuming. Launching a business takes 16 procedures and 36 days. The time involved in completing licensing requirements has been notably reduced, and the cost of completing them is slightly more than the level of average annual income. The labor market remains structurally rigid, although existing regulations are not particularly burdensome. Inflationary pressures have been building," the Heritage Foundation stated.
In terms of the Rule of Law, which measures freedom according to property rights and the freedom from corruption, the country maintained its score in property rights at 30 and improved its score to 26 in freedom from corruption.
For Open Markets, the Philippines saw its index score improve to 50 in investment freedom. The country maintained its score in trade freedom and financial freedom at 75.5 and 50, respectively.
"Weathering the ongoing global economic slowdown with a high degree of resilience, the Philippine economy has been on a steady path of economic expansion, growing at an average annual rate above 4.5% over the past five years. The government has pursued a series of legislative reforms to enhance the entrepreneurial environment and develop a stronger private sector to generate broader-based job growth," the Heritage Foundation said.
In this year's index, 91 out of 177 countries saw their scores improve and 78 saw a decline. On the plus side, average government spending scores improved. Heritage Foundation said this, however, was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labor markets. - Rappler.com