CHICAGO (JGL) – The Philippines has improved to 70th place from 76th in the 2016 Index of Economic Freedom ranking released Monday (Feb. 1) by the Heritage Foundation, a think tank based in Washington, D.C.
Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, according to the non-for-profit foundation.
Also in economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.
The economic freedom based on ten quantitative and qualitative factors is grouped into four broad categories or pillars of economic freedom: the first is the rule of law, which includes property rights, freedom from corruption; second is the limited government, which includes fiscal freedom and government spending; the third is regulatory efficiency, which includes business freedom, labor freedom, monetary freedom and the fourth, is open markets, which include trade freedom, investment freedom and financial freedom.
In the 2016 Index, the Philippines showed improvements in business freedom (+7.7); freedom from corruption (+2.0); and trade freedom (+1.0).
The Philippines achieved an Economic Freedom Score of 63.1 out of a possible 100, which is above the global and regional averages. The Philippines ranked 70th among the 186 countries (176 countries are ranked, eight countries are unranked) and 14th among the 42 countries in the Asia-Pacific region that were surveyed.
OVER 20 YEARS OF RANKING
The Heritage Foundation has been conducting the research and education of the Index of Economic Freedom for over 20 years as a resource on the advancement in economic freedom, prosperity, and opportunities and promotes these ideas in the homes, schools and communities.
“The Philippines welcomes the release of the 2016 Index of Economic Freedom. Its improvement by another six notches in the global ranking this year captures the sense of endless possibilities and potential that imbue the Philippine economy today under the leadership of the President Aquino, the steady and prudent economic management of the economic managers, as well as the leadership and hard work of the rest of the Cabinet, who have restored our government agencies to professionalism and institutional integrity,” said Philippine Ambassador Jose L. Cuisia, Jr.
In the report, the Heritage Foundation observed “the Philippine economy has been growing steadily at an average annual rate above six (6) percent for the past five years. The government has pursued legislative reforms to enhance the entrepreneurial environment and develop a more vibrant private sector to generate broader-based job growth.”
PH NOW “MODERATELY FREE”
While noting the problems of poor infrastructure, lingering institutional challenges, and the lack of dependable enforcement of the law, the Heritage Foundation also highlighted a number of positive developments. It recognized that public debt has been maintained below 40 percent of GDP, and budget deficits were controlled. The time involved in dealing with licensing requirements for new business has been notably reduced, and the cost of completing them has been cut. It also said that the financial sector, which is gradually modernizing, remains relatively stable and sound.
Based on an aggregated score, each of the 186 countries graded in the Index are classified as “free” (with a score of 80 or higher), “mostly free” (70-79.9), “moderately free” (60-69.9), “mostly unfree” (50-59.9), or “repressed” (under 50).
In previous years, the Philippines was under the “mostly unfree,” but it has returned to the “moderately free” category during the Aquino administration.
Ambassador Cuisia again thanked the Heritage Foundation for its transparency and objectivity in receiving information and data from the Embassy and other Philippine agencies.
“The Philippine Government will continue to work closely with the Heritage Foundation in ensuring that its annual survey reflects the key developments that are actually affecting economic freedom in the country,” he added.