The next frontier of competitiveness

The case of doing business conversation in the Philippines has, for too long, been framed as a governance story. Reduce red tape. Cut processing times.

- IRA PAULO POZON

Eliminate opportunities for corruption.

These are all worthy goals, for sure, and the Philippines has taken great strides of improvement. However, these are inputs, not outcomes. The outcome we should be measuring ourselves against is far more demanding: whether the Philippines is becoming more or less competitive as a destination for capital, talent, and enterprise in a rapidly shifting global economy.

That distinction matters enormously. An economy can score well on permit processing times and still be losing the competitiveness race. Rankings are lagging indicators. By the time we celebrate moving up twenty notches on a global index, the investment decisions that will shape the next decade have already been made, and made elsewhere.

COMPETITIVENESS IS ABOUT RELATIVE POSITION

National competitiveness is not an absolute standard. It is a relative one. We are not competing against our own past performance; we are competing against regional peers. Vietnam, for instance, attracted $27.6 billion in realized foreign direct investments (FDI) in 2025, its highest in five years, with manufacturing absorbing over 80% of those inflows as global supply chains continue their deliberate diversification away from China. We are competing against Indonesia, which drew $24.2 billion in FDI in 2024 alone. We are competing against Singapore, which long ago stopped playing the permit-reduction game and instead built its advantage on trust infrastructure, regulatory predictability, and the seamless movement of capital, data, and talent.

Despite a 38.5% rise in FDI inflows in 2024, the Philippines attracted only 4% of the total FDI flowing into Southeast Asia, which reached $225 billion that year. That is the context for this conversation - not whether we improved, because we did. The true question is whether we are improving fast enough, and in the right dimensions.