THE Philippines improved 12 notches to 58th spot in the 2017 Index of Economic Freedom from 70th last year.
In the latest annual global survey conducted by US-based think tank Heritage Foundation covering 186 countries and released by the Bangko Sentral ng Pilipinas over the weekend, the Philippines’ economic freedom score advanced to 65.6, a 2.5-point increase from its 2016 Index of Economic Freedom score. The score is higher than the world average of 60.9 and the Asia-Pacific region average of 60.4.
The think-tank said the gains were driven by the country’s “notable successes in fiscal policy, government spending and monetary stability.”
Heritage Foundation measures economic freedom based on 12 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom.
These are rule of law (property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business freedom, labor freedom, monetary freedom); and open markets (trade freedom, investment freedom, financial freedom).
The IEF reveals a positive relationship between economic freedom and a variety of positive social and economic goals, such as poverty elimination, greater per capita wealth, healthier societies, cleaner environments and democracy.
Heritage Foundation highlighted the country’s solid economic performance amid a challenging global economic environment.
“The Philippines has achieved notable economic expansion, driven by the economy’s strong export performance and inflows of remittances,” it said.
Dubbed as one of the strongest performers in Asia, Philippines GDP accelerated to 6.8 percent in 2016 on the back of higher investment and robust public and private consumption. Personal remittances, meanwhile, reached $29.7 billion in 2016, or a 4.9 percent increase from the year-ago level, and exceeded the Bangko Sentral’ projected growth of 4.0 percent for the year.
The positive investor sentiment, buoyed by the country’s strong growth momentum, pushed foreign direct investments to $7 billion in the first 11 months of 2016, 25.4 percent higher than $5.6 billion posted in the same period in 2015.
Heritage Foundation noted that “the government continues to pursue legislative reforms to enhance the overall entrepreneurial environment and develop a stronger private sector that is needed to generate broader-based job growth.”