Building National Competitiveness

MR. RUY Y. MORENO NCC DIRECTOR FOR OPERATIONS , PRIVATE SECTOR

National Competitiveness Council Road Show Cagayan De Oro 26 April 2012

Competitiveness
= The set of institutions, policies, and factors that determine the level of productivity of a country, taking into account its level of development.

What we compete for

Investments Trade Jobs

People
Tourists Image and Reputation Brand

Strategy - Country
Benchmark against key global competitiveness indices
Map each indicator to the agency responsible Focus on lowest-ranking or easiest-to-fix indicators

Working Groups concentrate on specific projects

Link Competitiveness Plan to Philippine Development Plan, National Budget, LEDAC, Cabinet Agenda

Track city competitiveness and key indicators

2011 Performance
World Economic Forum GCI IFC Ease of Doing Business +10 -2

(following a +14 re-rating due to methodology change)

IMD World Competitiveness Report - 2 Transparency International +5 Millennium Challenge Account Pass Economic Freedom Index +8

NATIONAL COMPETITIVENESS COUNCIL

Where we are today

WEF Global Competitiveness Report : No. 75 / 142 (2011)
No. 7 of 8 in ASEAN

IFC Doing Business Survey : No. 136 / 183 (2011)

No. 7 of 8 in ASEAN

IMD World Competitiveness Report : No. 41/85 (2011)

No. 5 of 5 in ASEAN

FutureBrands Country Brand Index : No. 65 / 110 (2010)

No. 14 of 17 in Asia Pacific

NATIONAL COMPETITIVENESS COUNCIL

Our target
WEF Global Competitiveness Report No. 30 or higher by 2016 IFC Doing Business Survey No. 50 or higher by 2016 IMD World Competitiveness Report No. 20 or higher by 2016 FutureBrands Country Brand Index No. 30 or higher by 2016 No. 2 or 3 in ASEAN in all rankings

The most problematic factors for doing business in the Philippines, 2011
0 Corruption Inefficient government bureaucracy Inadequate supply of infrastructure Policy instability Tax rates Crime and theft Tax regulations Restrictive labor regulations Inadequately educated workforce Access to financing Inflation Government instability/coups Poor work ethic in national labor force 2.5 2.2 2.0 1.9 1.9 0.5 0.5 5.7 5.6 5.6 4.6 7.9 18.3 16.5 Percent of responses (weighted totals) 5 10 15 20 25 24.4 30

Foreign currency regulations

Poor public health

PHILIPPINE COMPETITIVENESS RANKING WEF GLOBAL COMPETITIVENESS REPORT 2010 & 2011
2010
RED bottom 20% (111th 139th) PURPLE bottom 40-21% (83rd 110th) ORANGE bottom 50 41% BLACK (1st 68th) (69th 82nd)

2010
25 indicators 37 indicators 20 indicators 29 indicators 111 indicators

2011
(113th 142nd) (85th 112th) (71st 84th) (1st 70th)

2011
21 indicators 36 indicators 17 indicators 37 indicators 111 indicators

INDICATORS OVER-ALL RANKING 1st pillar: INSTITUTIONS 1.01 Property rights

Ranking (2010) Ranking (2011)

Change

1.02 Intellectual property protection

1.03 Diversion of public funds 1.04 Public trust of politicians

1.05 Irregular payments and bribes

1.06 Judicial independence 1.07 Favoritism in decisions of government officials 1.08 Wastefulness of government spending 1.09 Burden of government regulation 1.10 Efficiency of legal framework in settling disputes

85/139 125 99 103 135 134 128 111 131 118 126 122

75/142 117 105 102 127 128 119 102 118 109 126 115

+ 10 +8 -6 +1 +8 +6 +9 +9 +13 +9 0 +7

INDICATORS 1.11 Efficiency of legal framework in challenging regulations 1.12 Transparency of government policymaking 1.13 Business costs of terrorism 1.14 Business costs of crime and violence 1.15 Organized crime 1.16 Reliability of police services

Ranking (2010)

Ranking (2011)

Change

116 123 126 104 106 105 129 75 56 80 109

118 120 130 112 102 112 118 62 52 84 111

-2 +3 -4 -8 +4 -7 + 11 + 13 +4 -4 -2

1.17 Ethical behavior of firms 1.18 Strength of auditing and reporting standards
1.19 Efficacy of corporate boards 1.20 Protection of minority shareholders interests 1.21 Strength of investor protection*

INDICATORS 2nd pillar: INFRASTRUCTURE 2.01 Quality of overall infrastructure

Ranking (2010)

Ranking (2011)

Change

2.02 Quality of roads

2.03 Quality of railroad infrastructure 2.04 Quality of port infrastructure 2.05 Quality of air transport infrastructure 2.06 Available airline seat kilometers*

2.07 Quality of electricity supply

2.08 Fixed telephone lines* 2.09 Mobile telephone subscriptions* 3rd pillar: MACROECONOMIC ENVIRONMENT 3.01 Government budget balance* 3.02 National savings rate* 3.03 Inflation* 3.04 Interest rate spread*

104 113 114 97 131 112 28 101 106 88 68 62 74 73 75 102 75

105 113 100 101 123 115 28 104 103 92 54 71 70 69 50 89 63

-1 0 + 14 -4 +8 -3 0 -3 +3 -4 + 14 -9 +4 +4 + 25 + 13 + 12

3.05 Government debt*

3.06 Country credit rating*

NATIONAL COMPETITIVENESS COUNCIL

Key Drivers
Macroeconomic Management
Technological Readiness Market Efficiency for Goods Institutions (Governance)

+14
+12 + 9 + 8

NATIONAL COMPETITIVENESS COUNCIL

Key Constraints
Institutions (Governance)
Infrastructure Innovation

Labor Market Efficiency

Education Higher education & training

+ + -

8 1 2 2

Science & Math education quality

Quality of primary education

+ 2 - 2 -11

IFC Doing Business Survey Philippines vs ASEAN* 4-year trend

COUNTRIES SINGAPORE THAILAND MALAYSIA VIETNAM INDONESIA 2012 1 17 18 98 129 2011 1 16 23 90 2010 1 12 23 93 2009 1 13 20 92

BRUNEI DARUSSALAM 83

86
126

96
122

88
129

PHILIPPINES
CAMBODIA

136
138

134
138

144
145

140
135

Philippine Competitiveness Ranking IFC Doing Business Report 2009 - 2012

Indicators
Over-all ranking Starting a business Dealing w/ construction permits Getting electricity Employing Workers Registering Property Getting Credit Protecting Investors Paying Taxes Trading across borders Enforcing contracts Closing a business

2012 (183 economies)

136 158 102

2011 (183 economies)

134 155 98

2010 (183 economies)

144 162 111

2009 (181 economies)

140 155 105

54 117 126 133 136 51 112 163

57 109 116 131 127 54 114 161

115 102 127 132 135 68 118 153

126 97 123 126 129 58 114 151

DOING BUSINESS REPORT 2012 (out of 183 economies)

INDICATORS
PHL
OVER-ALL RANKING Starting a business Dealing with construction permits Getting Electricity Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business 136 158 102 54 117 126 133 136 51 112 163

BRN CAM
83 136 83 28 107 126 122 20 35 151 44 138 171 149 130 110 98 79 54 120 142 149

IDN
129 155 71 161 99 126 46 131 39 156 146

MYS
18 50 113 59 59 1 4 41 29 31 47

SGP
1 4 3 5 14 8 2 4 1 12 2

THA VNM
17 78 14 9 28 67 13 100 17 24 51 98 103 67 135 47 24 166 151 68 30 142

Why does it matter?

GDP per capita (US$)
10,000 9,000 Malaysia 8,000 7,000 6,000 5,000 4,000 Indonesia 3,000 2,000 1,000 0 Philippines Vietnam Cambodia Thailand China

Source: IMF 2011

Why does it matter?

FDI inflows (US$ million)
14,000 Indonesia 12,000

10,000
Malaysia 8,000 Viet Nam

6,000

Thailand

4,000

2,000

Philippines

-2,000

Source: UN 2011

NATIONAL COMPETITIVENESS COUNCIL

2012 PLAN
o Continuous tracking of global reports

o Regional Competitiveness Councils

o Industry Roadmaps o National Competitiveness Assessment and Plan

Building Regional Competitiveness

by RUY Y. MORENO

Private Sector Director National Competitiveness Council

Building blocks
National Competitiveness Plan Local Competitiveness Councils Industry Roadmaps

Working Groups

Proposed Structure/ Activities

Regional Competitiveness Council (Public and Private sectors)

Data Collection/ Competitiveness Indicators (Academe)

Capability Building and Training

Monitoring and Evaluation

Other Productivity/Compet itiveness Programs (PGS for LGUs, among others)

BUILDING REGIONAL / LOCAL COMPETITIVENESS

Project Goal Creation of regional or local competitiveness councils whose objectives are to strategically map out how to make their respective regions or communities more competitive vis--vis selected ASEAN cities. Specific Objectives To encourage Regional Development Councils (RDCs) to organize their own Local Competitiveness Committees and work on the metrics to serve as a diagnostic tool for assessing their regional/local competitiveness. To tap reputable universities per region/province for competitiveness data collection (research) and conduct of surveys. To establish linkages with the various public and private key stakeholders and development partners in the regions/provinces for research, monitoring and evaluation.

RDC
Competitiveness Committee 50% Private 50% Public

Collect Data
Give to NCC

PROPOSED INDICATORS
Assessing Local Economic Development/ Competitiveness Broad Indicator I: dynamism of local economy II: responsiveness of LGU to business needs III: Infrastructure IV: quality of life V: cost of doing business VI: human resources and training

RDC - University Partner (data collection)

OVERALL RANKING & COMPETITIVENESS DRIVERS

CITY OVERALL RANK DYNAMISM OF LOCAL ECONOMY COST OF DOING BUSINESS INFRASTRUCTURE HUMAN RESOURCES TRAINING RESPONSIVENESS OF LGU QUALITY OF LIFE

METROPOLITAN GROWTH CENTERS Cebu City Davao City 1 2 1 2 2 1 1 2 1 2 2 1 2 1

GROWTH CENTERS

Cagayan de Oro City

Bacolod City Zamboanga City Olongapo City General Santos City Iloilo City Mandaue City Baguio City

1
2 3 4 5 6 7 8

1
5 7 10 9 4 2 6

3
6 1 4 7 9 5 10

2
7 4 3 1 8 6 10

3
3 3 3 7 1 7 2

3
1 6 8 9 4 7 2

3
2 5 1 3 7 9 6

Batangas City Lapu-Lapu City

9 10

8 3

2 8

9 5

7 10

5 9

8 10

OVERALL RANKING & COMPETITIVENESS DRIVERS

CITY OVERALL RANK DYNAMISM OF LOCAL ECONOMY COST OF DOING BUSINESS INFRASTRUCTURE HUMAN RESOURCES TRAINING RESPONSIVENESS OF LGU QUALITY OF LIFE EMERGENT CITIES Dagupan City Tacloban City 1 2 7 8 5 13 1 10 11 1 2 1 5 5

San Fernando City

Ormoc City Puerto Princesa City

3
4 5

9
5 2

2
3 17

3
4 6

6
11 11

3
6 9

1
5 3

Naga City
Pagadian City

6
7

3
17

13
1

10
8

2
6

4
7

16
13

Legaspi City
Tuguegarao City Surigao City Tagum City Angeles City Lucena City Cotabato City

8
9 10 11 12 13 14

10
4 15 11 1 6 14

11
7 9 8 15 6 11

7
13 9 2 12 17 5

6
6 11 11 11 2 2

10
5 8 12 15 11 16

8
11 9 17 14 9 15

Iligan City
Butuan City Santiago City

15
16 17

13
16 12

4
16 10

15
14 16

6
2 11

13
14 17

3
1 11

Proposed Indicators 1. Dynamism of Local Economy

Total Population Total Income Per capita income Regional GDP Regional GDP per capita Regional GDP Growth Rate

2. Business Environment
PEZA Approval, number of PEZA-approved facilities in the city or municipality Travel advisory, presence of travel warnings from other countries ICT Council, presence of ICT council (by city or municipality) Vulnerability to natural disturbances, presence of ICT council (by city or municipality) Number of crimes solved per capita by city or municipality

3. Risk Assessment
Geophysical - Number of typhoons in the past 3 years - Number of earthquakes in the past 3 years - Flood prone areas Geopolitical Per capita Internal Revenue Allotment Prevalence rate of diseases (provincial data), morbidity rate of disease Number of tuberculosis cases Number of pneumonia cases Number of election related violence crimes (provincial data) Number of terrorist acts

4. Responsiveness of LGU to Business Needs

Length of time to renew business permits (days) Cost of renewing business permits (% of annual revenue) Length of time to register property (days) Cost of registering property (% of value) Length of time to secure utility connection (days) Total time spent on administrative matters (i.e., tax and other payments), days per year Availability of investment incentives, local investment code Presence of Local Investment Promotion Office Presence of Business One-Stop Shop

5. Infrastructure
Availability of 24 hr electricity Availability of 24 hr water service Quality of road network Number of telephone service providers Number of internet providers Quality of internet connections Total number of cars for hire Travel time to airport Travel time, access to nearest international airport Travel time to seaport Travel time to nearest international seaport Frequency of flights per day

6. Quality of Life
Police to population ratio Monthly crime rate Doctor to population ratio Number of hospitals Number of hospital beds Number of high schools Number of colleges/universities Number of commercial banks Number of historical, tourism sites Number of hotel rooms (4-star, 5-star) Number of daily domestic flights (to Manila to Cebu) Number of daily international flight

7. Cost of Doing Business

Electricity cost (P/kwh) Water rate (P/cu.m.) Fuel cost (premium, P/liter) Minimum wage (per day) Commercial space rental/lease rate, central business district (P/sqm/month) Commercial lot value (P/sqm) Industrial space rental / lease (P/sqm/month) Industrial lot value (P/sqm)

8. Human Resources
Total number of high school and college students Number of high school graduates per year Number of college, university graduates per year Number of graduates who earn Licenses, Certification Percentage of population with college degrees Number of technical-vocational schools Number of graduate schools Total number of employees Unemployment rate Percentage of Professionals, By Region Number of working age population (ages 15-29, NSO) less number of graduates from all tertiary education institutions within a city's or municipality's boundaries (over total working age population)

CAPACITY BUILDING AND TRAINING

Customer Service Excellence for the LGUs/ BPLOs (c/o CIC)
Aims to enhance LGUs/BPLOs technical knowledge, professional attitude, and customer-orientation

Local Investment Promotion (c/o BOI)

Appreciation seminar for local executives, line-agencies and private sector organization representatives on their roles in investment promotion. It highlights the different investment promotion tools and strategies that can be used by the different localities to promote their area as an investment destination

Urban Planning
With populations growing and resources limited, it is important for LGUs and regions to properly undertake urban planning for optimal resource management

MONITORING & EVALUATION

Customer Feedback Surveys
Quick-response, self-administered surveys covering one specific topic at a time. First survey covered BPLS and was conducted from Jan 10 Feb 10.

Field Monitoring
In-depth studies to validate survey results and ask follow-up questions

Baseline Data Collection

Collection of basic data before and after programs are conducted in order to measure progress over time

Enterprise Surveys
Large-scale public opinion surveys conducted through face-to-face interviews

Sample, Bicol Competitiveness Committee (BCC)

Created on August 26, 2011 (RDC No. 25) Tasked to improve competitiveness in the public and private sectors in the region. Aims to - improve competitiveness of the LGUs - ensure complementation of productivity and competitiveness programs of the government and private sectors.

Bicol Competitiveness Committee

Functions a. To monitor the LGUs on selected competitiveness indicators, b. To assess productivity enhancing programs of various agencies, c. To advocate the enrolment of LGUs and key line agencies on different competitiveness systems, and d. To propose policy and administrative reforms

Bicol Competitiveness Committee

Chaired by NEDA Membership: 7 RLAs 6 PPDCs 7 CPDCs 7 private sector representatives (PCCI Bicol and 6 local chamber of commerce and industry) 27

Proposal to merge RPC, RIPC and BCC

Common of objectives, functions and membership; To have more focused activities on: improving competitiveness of the LGUs and government agencies, increasing productivity level of private enterprises, and promoting investments that will create jobs for the Bicolanos.

BCC-NCC BPLS-Field Monitoring Project (Bicol, pilot run)

Objectives: Validate results of the recently conducted BPLS in Bicol areas (Daraga, Tabaco, Guinobatan, Legaspi, Naga and Iriga) Establish baseline data on BPLS and gather relevant information Prepare completion report Implementation Date: March 12-23, 2012 Partners: NCC, academe, BCC, DTI-Bicol, RDC, development partner Project Mechanics: NCC and partner universities/colleges conduct field monitoring interview with mayor, BPLO head of LGU and 3 businessmen from each identified LGU; Preparation of reports for submission to NCC

NATIONAL COMPETITIVENESS COUNCIL

6/F, 361 Sen. Gil Puyat Avenue, Makati City Telefax No. 890-4861/751-3404

Thank you !!!

E-mail address: admin@competitive.org.ph www.competitive.org.ph www.governance.org.ph facebook.com/Compete.Philippines twitter.com/ncc_philippines