A recent report by the International Monetary Fund said the Philippines has room to improve its business environment and infrastructure relative to its peers in the Association of Southeast Asian Nations, but it needs to address those gaps that threaten its potential to attract private investment and boost productivity growth.
The report said the Philippines has room to improve its business environment and infrastructure relative to its ASEAN peers, as it lags on economic openness, business regulation reform, electricity access, and logistics, which are key to private investment and productivity growth in sectors which the country wishes to expand capacity, including the industrial and manufacturing sectors.
The IMF also noted that the Philippine Development Plan 2023-28 highlights infrastructure gaps beyond conventional means, including education facilities and equipment shortages that limit learning opportunities for students, particularly in underfunded areas.
It adds that internet costs remain prohibitive, with fixed broadband prices four times higher than in Vietnam and more than double the Southeast Asian average.
On the bright side, financial markets appear to be operating at least as well, if not better than upper-middle-income countries, with regards to credit provision and financial market regulation, the IMF noted.
It pointed out that key policy priorities include expanding access to quality education and health services, strengthening employment opportunities, and addressing skill mismatches between graduates and labor market demands.
Addressing governance issues is also critical to building investor confidence, as although the country outperforms G20 emerging markets in regulatory quality, accountability and effectiveness, the Philippines still lags behind ASEAN peers.
Strengthening anti-corruption efforts and improving the rule of law can enhance business certainty, ensure fair contract enforcement, and protect property rights, the IMF added.
Among the advantages of being a country with a lot of room for improvement is the privilege of having choices, as focusing on any of the recommendations can already result in tangible improvements.
All our government has to do is pick the ones that can yield the most productive and sustainable results.*
