Some of the observations made in the study are being disputed. Still, the results of the 2018 Index of Economic Freedom drawn up by the Washington-based think-tank Heritage Foundation can serve as a signpost in the government’s reform agenda.
Among 180 economies included in the study, the Philippines ranked 61st in terms of economic freedom. It was a slip of three notches from last year, when the country registered a 12-notch improvement from its rating in 2016. The think-tank noted that lower scores in government integrity, monetary freedom and property rights pulled down the Philippines’ ranking.
Placing 61st among 180 is not bad, but clearly it can be better, especially considering that several other economies in Asia ranked ahead of the Philippines. Hong Kong beat Singapore as the world’s freest economy this year, followed by New Zealand, Switzerland and Australia. Among Asian economies, Taiwan ranked 13th; Malaysia, 22nd; South Korea, 27th; Japan, 30th; Macau, 34th and Thailand, 53rd. The Philippines at least ranked ahead of Indonesia (69th), Brunei (70th) Cambodia (101st), China (110th), Mongolia (125th), Myanmar (135th), Laos (138th), Vietnam (141st) and Timor-Leste (167th).
Despite the three-notch slip, the Philippines maintained its “moderately free” ranking with its overall score of 65 out of a possible 100. Among other things, Heritage Foundation noted “an absence of entrepreneurial dynamism” that thwarted development in the Philippines. The think-tank also stressed the need for deeper institutional reforms in terms of business freedom, investment freedom and the rule of law.
The report noted that while judicial independence is “strong” in the Philippines, the justice system is weak and vulnerable to political influence, with the courts plagued by inefficiency, low pay, intimidation, delays and case backlogs. “Corruption and cronyism are pervasive, and the country is a regional money-laundering hub,” the report added.
These observations are not new. Having them included in yet another international survey should inspire more effort to implement the necessary reforms.