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02/02/2018: PH REMAINS “MODERATELY FREE” ECONOMY – 2018 IEF REPORT

PRESS RELEASE
WDC-07-2018

2 February 2018

WASHINGTON, D.C.— The Philippines firmly remained a “Moderately Free” country in the Heritage Foundation 2018 Index of Economic Freedom (IEF) released today in Washington, D.C.

In his report to Secretary of Foreign Affairs Alan Peter S. Cayetano, Philippine Ambassador to the United States Jose Manuel G. Romualdez said that the Philippines achieved an Economic Freedom Score of 65.0 out of a possible 100, which is significantly better than the global and regional averages.

While the Philippines moved down slightly from global rank 58th in 2017 to 61st place in 2018, it improved its regional standing by one rank to number 13th among 43 countries in the Asia-Pacific that were surveyed.

The IEF is an annual survey of 180 countries published since 1995 by the Heritage Foundation, a Washington-based think-tank. The 2018 Index graded economies based on 12 independent factors called Economic Freedoms.

“The Philippines notes the release of the 2018 Index of Economic Freedom. It clearly indicates the sustainability of Philippine economic growth particularly on the back of serious economic reforms, particularly in ease of doing business and taxation. We are assured that this will enhance continued business and investor confidence, as we implement an ambitious infrastructure development program in the next few years,” said Ambassador Romualdez, in Washington, D.C.

While noting the problems posed by still needed institutional reforms, and a weak judicial system in the Philippines, the Heritage Foundation also highlighted positive developments. It recognized that the Government has adopted fiscal reforms and that industrial production has been growing rapidly even as agriculture remains a significant part of the economy.

Performance in the economic freedoms relating to government size, regulatory efficiency and open markets generally improved or remained stable. The Philippines showed improvements in trade freedom (+4.3); judicial effectiveness (+1.1); fiscal health (+.5); and labor freedom (+.4). Business, investment and financial freedoms remained stable.

However, the Philippine Embassy also pointed out certain observations in the IEF report that do not seem to be supported by the facts on the ground. The report noted that the “rapid decline in the President’s popularity caused investor confidence to wane by the end of 2017.” It also stated that “an absence of entrepreneurial dynamism thwarts development.”

“I wish to note that the latest Pulse Asia survey showed the President’s trust and approval ratings at an all-time high of 80 and 82 percent, respectively. The latest Social Weather Station survey shows that the trust and satisfaction ratings are 83 and 75 percent, respectively,” Ambassador Romualdez said in reaction to the IEF report’s statement on the President’s popularity.

Ambassador Romualdez also referred to the ASEAN Business Outlook Survey 2018 published by the US Chamber of Commerce that showed 70% of those surveyed say that their companies plan to expand in the Philippines, and 85% of respondents expect their companies’ profits to increase in 2018.

“Among all ASEAN Member States, the Philippines scored highest in satisfaction with regard to an adequate and well-trained labor force, and second highest with regard to availability of trained personnel,” he likewise emphasized.

“We believe that there might have been a time-lag in terms of Heritage Foundation receiving the latest and complete information on the President’s approval ratings and the level of business confidence in the Philippines. We will also provide them with a full update on the positive strides that we have taken with respect to developing a dynamic entrepreneurial economy, supported by a robust MSME development program and an innovation start-up eco-system,” Ambassador Romualdez added. ###