“The Importance of Metrics and Measurement as a Tool for Governance, Budgeting Management and Competitiveness”

Ladies and gentlemen, good afternoon.

Let me first express my sincerest gratitude to the summit organizers, led by the National Competitiveness Council, for this opportunity to speak in front of you.

Amid the critical issues we face today and as we prepare ourselves to face the remaining challenges ahead, I think it is important to remind ourselves of our achievements and how far we have gone in transforming the Philippine economy.  Many of us may already know this, but it always gives us pleasure to mention that the Philippines remains among the top performers in the region in the midst of downside developments in the global economy, as well as domestic challenges, particularly the natural and man-made calamities that the country has experienced in the last couple of years.

The country also continues to receive an unprecedented level of confidence among the international business community. In fact a year after our credit rating was upgraded to investment-grade status by major credit-rating agencies, the Philippines recently won a “BBB” rating from Standard & Poor’s in May of this year– the best grade ever that we received from a major credit-rating agency. This has been reinforced by improvements in Philippines’ ranking in several global competitiveness reports such as the International Finance Corporation’s Ease of Doing Business Report, Transparency International’s Corruption Perception Index, and the World Economic Forum’s Global Competitiveness Index.

Our assessment of the country’s economic performance in the past three years confirmed that good governance, strong macroeconomic fundamentals–sustainable fiscal and external positions and a stable financial sector–and political stability are crucial in creating a favorable climate for investment and in sustaining economic growth. Furthermore, these  have given us wider fiscal space with enough flexibility to sustain the momentum of increased spending and improved budget allocation, allowing us to make critical investments in physical infrastructure, education, health, and social services, which could lead us to a higher growth trajectory.  

Despite these achievements, the government does not lose sight of the need to deepen the inclusivity of our development process. We need to ensure that economic growth is rapid enough to matter, given the country’s large population, geographical differences, and social complexity. We need sustained growth that creates jobs, draws the majority into the economic and social mainstream, and substantially reduces mass poverty.

But the national government cannot do this alone. Local government units or LGUs are very much crucial in the country’s move towards economic prosperity. To make growth inclusive, our role in government, from the national to the local, is to provide a level playing field so that everyone has a chance to participate in the growth process and to benefit from economic progress. Improving and sustaining competitiveness is important in this respect.

As we continue to improve our monitoring system for capturing the overall global competitiveness ranking of the country, we also need to look at how local governments are working to improve local competitiveness. We need to identify objective and specific indicators of development and competitiveness at the local level that can be directly linked with the country’s global competitiveness rankings. Such local competitiveness indicators would also show the economic or business strengths and weaknesses of the LGUs and allow for local level comparisons. Local competitiveness indicators will eventually be useful tools for identifying the kind of interventions needed to help lagging LGUs catch up.

Therefore, it is critical to develop tools or methodologies for measuring competitiveness. Necessarily, data need to be available. Currently, most of the data capturing mechanisms are only at the regional level. Thus, we need to establish a mechanism for data generation down to the level of cities and municipalities. This is where NEDA and our attached agency, the Philippine Statistics Authority (PSA), and the Department of Trade and Industry (DTI), through the National Competitiveness Council (NCC), will join forces to create methodologies and formulate policies to institutionalize regular data gathering and reporting of local competitiveness. NEDA also recognizes the importance of locally-generated indicators and indices that can be used to monitor the status of the governance reform agenda. Together with the PSA, we will develop governance indicators and annually generate the same for use in the next development planning cycle.

Through this partnership, NEDA-PSA and DTI-NCC will share expertise in data gathering or generation, as well as in analysis and validation of results. This will be done in coordination with the concerned Regional Competitive Councils. Of course, the LGUs will be the main and most-valued partners of this venture.

I would also like to add that this initiative to develop and institutionalize a local competitiveness index will support many strategies in the Philippine Development Plan.  For one, knowing the competitiveness rating of localities will help direct investors to specific areas where there is high potential for growth and where financing is needed. On the part of government, establishing a local competitiveness indicator system would help in channelling resources to areas where these are most needed. This will support our development goal of reducing multidimensional poverty and creating massive quality employment.

Furthermore, the local indicator system supports the grassroots participatory process strategy and can also be used as reference for the Seal of Good Local Governance, which is being regularly awarded by the Department of Interior and Local Government or DILG. The Seal, awarded through an open and transparent process, serves as incentive to LGUs for good local governance, based on the two pillars of strong, responsive government – good performance and good housekeeping.

On my final note, let me underscore the importance of a reliable local indicator system as a tool for governance, especially in making evidence-based decisions and informed policy choices and programs towards achieving our collective goals for sustained and inclusive development. In this context, I enjoin everyone to place greater value on developing and institutionalizing a local competitiveness index while keeping in mind that inclusive, broad-based growth requires the participation of and coordination among government agencies at different levels as well as the private sector and development partners. Let us work together to raise our standards for governance that will translate into greater competitiveness. Let us put our heads together to build a strong foundation for inclusive growth.

Thank you very much and mabuhay!