The Philippines’ economic freedom ranking dropped three places in the Canadian conservative think tank Fraser Institute’s Economic Freedom Index for 2020, placing 66th out of 165 economies with a score of 7.09.
The country scored 0.25 points lower than its 7.34 score in the 2019 index that measures economic freedom based on five categories – sound money, size of government, legal system and property rights, freedom to trade internationally, and regulation.
The Philippines performed best in the sound money category, gaining points from the previous year by scoring 9.58 in the category that covers money growth, inflation and freedom to own foreign currency bank accounts. Its lowest score was in legal system and property rights at 4.44, due to the weakening impartiality of the country’s courts. Scores all declined in the rest of the categories assessed.
The Philippines, which shared the 66th spot with Indonesia, lagged behind Southeast Asian neighbors such as Singapore (2), Malaysia (49), Brunei (59) and Cambodia (63). However, it was ahead of Thailand (86), Vietnam (113) and Myanmar (137).
“The index attempts to measure the strength of our institutions in preventing political corruption and other practices such as bribery, extortion, nepotism, cronyism, patronage, embezzlement and graft,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University said. He noted the “maneuvering” of independent institutions during the previous government was a major threat to economic freedom.
Lanoza also noted the index tracks the “crumbling” of Philippine democratic institutions. “The only way this will change is to strengthen the checks and balances in our institutions.”
The decline in ranking may reflect a serious problem in governance, but it can still be reversed if the new administration of President Ferdinand Marcos Jr. is willing to pursue the necessary good governance reforms that can reverse the slide, especially as government has been showing a tendency to take sides for or against businesses.
Whether the slide in economic freedom ranking, which is closely related to strong institutions and good governance, will continue or not, is now up to the new administration. Filipinos can only hope their government sees it as a priority.*
