MANILA, Philippines - Economic freedom in the Philippines suffered when the global crisis broke out in 2008, according to an annual ranking that downgraded the country 8 notches down to 76th out of 141 economies.
Volatile inflation which "made it virtually impossible" for firms and individuals to safeguard their assets was among the key factors for the Philippines’ poorer showing as were its restrictions on trade, an Economic Freedom of the World report released last month stated.
The country’s index score dipped to 6.77 from 6.92, mirroring the fall in the global economic freedom average which was said to have retreated for the first time in decades.
The report was prepared by the Economic Freedom of the World Network, a group of think tanks including the University of Asia and the Pacific’s Center for Research and Communication. It used hard data and opinion surveys from international organizations.
Rankings were based on showings in 5 areas: extent of state spending, the legal system’s ability to secure property, access to sound money, openness to trade, and regulation of credit, labor and business.
The Philippines’ score fell in 3 of the 5 indicators. When adjusted to account for the entry and exit of economies in the rankings throughout the years, the Philippines was 66th, down 4 spots from 2007.
Among the 7 Southeast Asian countries, the Philippines placed third above Malaysia, Indonesia, Vietnam and Myanmar. But it trailed Singapore and Thailand.
Hong Kong retained the highest rating at 9.05 out of a possible 10. Others in the top ten were: Singapore, New Zealand, Switzerland, Chile, the United States, Canada, Australia, Mauritius and the United Kingdom.
Zimbabwe was at the bottom.
"Access to sound money" -- measured mostly in terms of inflation -- was the area where Philippines’ performance worsened the most.
Philippine scores in terms of freedom to trade internationally and the efficacy of the legal system likewise dipped as these were dragged down particularly by tariff policies and perceptions of biased courts.
Slight improvements in government spending and business regulations were unable to offset the deterioration in the rest of the factors.
Local business groups, however, are optimistic that the country’s ranking will improve.
While noting inconsistencies between national and local government policies, Philippine Chamber of Commerce and Industry President Francis C. Chua said, "the economy is good."
Foreign business chambers were likewise heartened by indications from the new administration.
"If we look at the same data in some years’ time, we would have moved upwards," European Chamber of Commerce of the Philippines Executive Vice-President Henry J. Schumacher said.
"We will have improved rapidly," American Chamber of Commerce of the Philippines Executive Director Robert M. Sears said.