FEF Discussed PH’s Latest Economic Freedom Performance

The Foundation for Economic Freedom (FEF), in partnership with Fraser Institute and Atlas Network, conducted an Economic Freedom Audit Validation Workshop on September 28, 2022, at Shangri-La the Fort, Manila, Taguig City. The event was attended by stakeholders and representatives from relevant organizations from both the public and private sectors.

The said workshop tackled the results and recommendations from the Economic Freedom of the Philippines 2022 workshop held on April 6, 2022, where participants from government and non-government institutions provided policy suggestions in areas where the country performed poorly, according to the Economic Freedom of the World 2021: Annual Report.

READ: FEF talks on improving PH economic freedom

The new 2022 Annual Report was also presented during the Validation Workshop.

The EFW index was developed by the Fraser Institute to measure the degree to which the institutions and policies of different countries across the globe are consistent with identified tenets of economic freedom.

Spanning a total of 165 jurisdictions, the 2022 EFW index used 2020 data—the year when the global pandemic started—to assess the consistency of government policies and structures that uphold the cornerstones of economic freedom, such as personal choice, voluntary exchange, open markets, and clearly defined and enforced property rights.

Philippines’ economic freedom rankings in five areas based on 2020 data.

Citing the EFW 2022 Report, FEF Fellow Christopher Ilagan locates the country’s overall performance at 66^th out of 165 countries, moving down from 63^rd in the previous year. He expounded the country’s scores under five areas: (1) Size of Government (24^th); (2) Legal System & Property Rights (121st); (3) Sound Money (24^th); (4) Freedom to Trade Internationally (102^nd); and (5) Regulation (59^th). He then discussed some factors behind the scores, particularly under Areas 2, 4, and 5.

FEF Fellow Christopher Ilagan discusses the Philippines’ performance in the 2022 Economic Freedom of the World Index by the Fraser Institute.

In terms of the legal system and property rights, the country experiences the persisting military influence in the rule of law, lack of transparency, and poor reliability of public authorities in law enforcement.

Meanwhile, the country’s freedom to international trade was greatly affected by heavy restrictions brought about by the onset of COVID-19. The country’s business regulations are also marred with red tape, overregulation, and overlapping bureaucratic processes. These policies hinder the entry of new businesses and competition.

According to FEF Chairman Roberto de Ocampo, the findings are useful for policymakers to examine the aspects of the Philippine economy that need further reforms.

“We have to make it easier, for example, for people to apply and start business. Ang problema sa atin, mahilig tayo sa maraming dokumento, imbestigasyon, at pipirmahan. Dahil sa ganon, napakahirap magsimula ng isang business sa Pilipinas,” he said.

WATCH: PH ranked 66^th in global economic freedom index

Guided by the report findings, FEF continues to push for reforms that will boost the country’s economic freedom. Earlier, it lobbied for the eventual passage of the amendments to the Public Service Act, which opened several key sectors of the economy to full foreign ownership of public services in the Philippines.

READ: FEF lauds game-changing law on foreign investments

FEF is also actively urging the government to ratify the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement.

“The RCEP agreement’s immediate value lies in the promise of seamless production networks among the members who will be tied to common standards, disciplines on intellectual property, rules of origin, customs processes, e-commerce, and competition policy. Within this framework of stable and predictable rules, the Philippines could aspire to become a regional manufacturing and services hub, thereby creating much-needed domestic jobs,” said FEF Vice-Chairman Romeo Bernardo.

READ: FEF statement on RCEP ratification

by Cesar Ilao III