An MRT-3 train in Manila. The Philippines’ infrastructure is holding it back. Source: Wikimedia
Out of a study ranking freedom in 178 economies, the Philippines comes 70th, according to the Index of Economic Freedom by the Heritage Foundation.
The Washington-based think tank analyses developments in economic freedom, prosperity and opportunities.
The Philippines scored a “moderately free” rating of 63.1 out of a possible 100, its highest rating in five years.
The freest economy was Hong Kong, then Singapore, New Zealand, Switzerland and Australia. North Korea came last with a 2.3 “repressed” rating.
Out of Asean, only Malaysia had a “mostly-free” economy with Thailand “moderately free” and Cambodia and Vietnam rated as “mostly unfree”. Myanmar and Laos had a “repressed” economy, along with 22 other countries, including Argentina.
The United States was in 11th place with 75.4 points and China was 144th with 52 points, among 62 countries rated “mostly unfree”.
The think tank argued that economically free societies enabled citizens to work, own property, consume, trade and invest without restrictions.
The index measures the rule of law, including property rights and freedom from corruption; limited government with fiscal freedom and government spending under assessment; regulatory efficiency looking at business, labour and monetary freedom; and open markets examining trade, investment and financial freedom.
The Philippines has been growing at 6 per cent with unemployment falling and agriculture, electronics, clothing making and shipbuilding all growing impressively, the think tank said.
The financial sector remained relatively stable and sound.
The report praised the Philippines’ monetary freedom, management of public finance and work done to enhance the entrepreneurial environment and develop a vibrant private sector.
It reported that the archipelago’s poor infrastructure was blocking progress but labour freedom and rule of law were listed as the main problems.
“Corruption and cronyism are rife in business and government. A few dozen leading families hold a disproportionate share of land, corporate wealth and political power. A culture of impunity, stemming in part from case backlogs in the judicial system, hampers the fight against corruption. The rule of law is generally weak as courts are hampered by inefficiency, low pay, intimidation and corruption,” the report said.
“The labour market remains structurally rigid, although existing regulations are not particularly burdensome.”
It urged Manila to introduce anti-corruption measures.