The World Competitiveness Yearbook is a comprehensive annual report on the competitiveness of countries. Swiss-based International Institute for Management Development (IMD) created the World Competitiveness Ranking using statistics and surveys based on extensive research to rank these countries.
The yearbook provides coverage for 63 countries currently based on the availability of comparable international statistics. A country’s Gross Domestic Product is not enough. Political, social, and cultural dimensions also determine a country’s World Competitiveness Ranking.
A country’s economic performance, government efficiency, business efficiency, and infrastructure determine its rankings. More specifically, it measures business and consumer confidence, the presence of physical and digital infrastructure, and the likes.
World Competitiveness Rankings Top 10
Here are the countries which made the top 10 in this year’s world rankings:
- Denmark
- Switzerland
- Singapore
- Sweden
- Hong Kong SAR
- The Netherlands
- Taiwan
- Finland
- Norway
- United States
How did Denmark get the Number One Spot?
This is the first time Denmark has reached number one on the global competitiveness rankings. The Danish government plans to cut emissions by 70% in ten years. One can say that this effort might be a contributor to Denmark’s rankings. In the past five years, Denmark was ranked 6th, 8th, 2nd, 3rd, then 1st.
In terms of economic performance, there has been a massive improvement in Denmark’s international investments. The country’s health indicators, such as life expectancy and birth rate, were also significant in placing it first on the rankings. And according to experts, the Danish economy is far away from having a poor domestic economy.
From an economic point of view, Denmark’s economic performance fell but has now recovered by ensuring inclusive economic recovery. Right now, the Danish government will face economic problems with the Russian-Ukrainian war and inflation across Europe.
In terms of the competitive landscape for 2022, Denmark ranked 13th in economic performance, 6th in government efficiency, first in business efficiency, and 2nd in building resilient social infrastructure. The most considerable improvement that Denmark could have within its government is its tax policies.
The Philippines in the World Competitiveness Rankings
The Philippines has been impressive in the 2022 World Competitiveness Yearbook, climbing four spots in the rankings. From the 52nd spot out of 64 nations in 2021, The Philippines managed to rank at the 48th place out of 63 countries in 2022. This was the highest-ranking that the IMD has given since placing 45th in 2020.
Despite the improvement in the rankings, The Philippines still has a long way to go as it is still placed 13th out of 14 Asia-Pacific economies for the fifth consecutive year in the global competitiveness index.
Economic Performance
Regarding economic performance, the country’s GDP expanded by 5.7% last year. And in the first quarter of this year, the GDP has grown by 8.3%. According to the Philippine Statistics Authority, transportation and storage is the main contributor to the country’s GDP increase of 26.5%.
Wholesale and retail trade and automotive repairs account for 7.3% of the country’s GDP, and manufacturing in around 10.1%. On the other hand, there has been growth in the fields of agriculture (0.2%), forestry (10.4%), and fishing (8.6%) last year.
Infrastructure
Regarding infrastructure, The Philippines went from 59th place in 2021 to 57th place in 2022. For an administration with a flagship infrastructure project, it is a shocker that infrastructure is the lowest among the competitive factors. Despite having a low ranking, the country has performed excellently as it moved two places in the rankings.
The Philippines might be excellent at building expressways but has yet to improve in creating health and education infrastructure. However, we should be happy that the country increased its rankings regarding infrastructure. It just means that the government’s Build, Build, Build program is paying off.
Government Efficiency
From 45th place last year, the country placed 48th in the cost competitiveness index due to budget deficit and outstanding government debt. As of April 2022, the Philippine budget deficit stood at PHP 311.9 billion, and its outstanding debt rose to PHP 12.76 trillion. The reason for this debt and spending is the government’s COVID-19 response.
According to IMD, the challenges that The Philippines face in the following years are recovery from the pandemic while strengthening fiscal responsibility and poverty reduction. The Philippines also has to develop education and health systems that are sustainable in the future, as well as reduce climate change vulnerability.
Business Efficiency
There is also a decrease in the Philippines’ performance regarding business efficiency and international investment. From 37th place last year, the Philippines currently sits at the 39th place this year. The biggest plunge, however, is in the country’s overall productivity from 10th in 2021 to 57th in 2022. The culprit here is the COVID-19 pandemic as well.
How did the Country’s Ranking Improve?
Despite a decrease in the Philippines’ government and business efficiency rating, there has been an increase in the country’s infrastructure and economic performance. An increase in the country’s GDP, higher gross capital, macroeconomic stability, and employment creation made the Philippines a more economically competitive nation.
And according to experts, the country’s improved ranking can be a sign of more potential investments in the future. Moreover, European Chamber of Commerce of the Philippines Charles Wittig stated that these international benchmarks are a snapshot of a country’s economic health, guiding the decisions of the private sector.
And according to another expert, the incoming Marcos administration can further improve the country’s competitiveness by addressing corruption, sustaining infrastructure, lowering unemployment, maintaining fiscal health, reducing poverty, and making the nation stronger against climate change.
What does this Mean for Real Estate?
If the Philippines continues to improve with its World Competitiveness Rankings every year, there might be a boom in real estate investments. Two critical factors driving the real estate market are the economy and government policies. The Philippines is already doing an excellent job in one of these areas.
If the country’s government policies improve within the next few years, there might be a boom in real estate. If you are interested in real estate investments, you can invest in the best real estate development in the Philippines. Camella is one of the Philippines’ real estate giants and for sure, investing in our house and lot or condo is an excellent choice.
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