TWO years ago, right after the AIM Policy Center made public the Philippine Cities Competitive Ranking Project (PCCRP) results for 2005, the Iloilo City Government invited some fifty (51) residents coming from various sectors to a forum to assess how the City fared with the other cities in the country. At the end of the conference, the group came up with some list of things-to-do for the City to improve its competitive rank of 3 among the 15 mid-sized urban centers.

The PCCRP is a biennial independent study conducted throughout the archipelago. For 2007 results, Iloilo City came out on the 8th spot - a very discouraging development, a slip from rank 3 in 2005, which came just as the City was recovering from the devastations of the typhoon; at such a time when everyone was still nursing the hurt of loss and cleaning up the spoils of the floods. It was also very disappointing since the citation was cutoff for the top 7, leaving out Iloilo City “in the cold”.

Philippine state of competitiveness. In his effort to check on why the “low” grade and the perceived dismal performance on the drivers of competitiveness, Mayor Jerry P. Treñas sent two City Hall executives to attend the national conference on the state of Philippine competitiveness at the SMX Convention Center in Pasay City last 15 July 2008.

The gathering brought together institutions which are active in supporting activities focused on social economy and political reforms such as the Konrad Adenauer Stiftung (KAS), an independent non-profit German political foundation; Asian Institute of Management (AIM), the premier business school in the Asia-Pacific; the National Competitiveness Council, and the Philippine Creative Industries.

Klause Preschle, Country Representative of the KAS and Francis G. Estrada, president of AIM played hosts to the conference attended by some three hundred delegates, mostly people from the AIM and agents of change. Estrada reported on the World Competitive Scoreboard which indicated the 2008 overall rankings for the 55 economies. The Philippines improved its rank from 45 last year to 40 this 2008.

The same report listed five challenges in 2008: innovation in advancing the country’s creative human capital; mitigate the impact of food, energy and climate security issues; accelerate the completion of priority infrastructure projects; pursue education policies that help develop a globally competitive workforce; and intensify public-private sector partnerships to fast track political and economic reforms.

The National Competitive Council (NCC) first year harvest was given a positive review by Ambassador Cesar B. Bautista. Dr. Federico Macaranas spotlighted the creative industries as a vital key to sustain and improve the country’s competitiveness.

In order for the Philippines to land in the upper third of the economies ranked by 2010, the country’s competitiveness strategies are looking to the creative industries.

The conference keynote speaker was Marikina Mayor Marides C. Fernando who shared the Marikina experience. She cited her 3E’s strategy of enacting ordinances, educating constituents and enforcing laws. Another keynote address was delivered by DOST Undersecretary Fortunato de la Pena.

The national conference brought to the fore the efforts that the various groups – the National Competitive Council and the various institutions in the creative industries, are putting into improving the competitiveness of the country. The recent results remind the proponents of development, of a tremendous task ahead towards making dreams real.

PCCRP 2007. For the 2007 round, the survey covered 90 cities – 20 metro, 25 midsized, and 45 small urban centers, but those cited were only the top 25 – 6 metro, 7 midsized, and 12 small cities. The awarding of citations for the 25 cities that ranked at the top of the three categories was held in Makati, last 4 July 2008, where the official results of PCCRP2007 was presented. The event was attended by the winning LGU delegations and representatives of the partner organizations and schools which assisted in the survey.

Documents gathered from the AIM Policy Center showed that Iloilo City did not make it to the Magic 7 of the Midsized Cities because with an overall score of 6.60, it was behind Olongapo (7.05), General Santos (6.94), Tarlac (6.80), San Pablo (6.75), Cabanatuan (6.74), Tagum (6.66), and Lucena (6.64).

If we look at the top 6 among metro cities, only Davao (7.05) and Quezon City (6.61) have higher grade than Iloilo City. Notice that Iloilo City has beaten the other four: Makati (6.58), Manila (6.43), Marikina (6.37) and Lapu-lapu (6.30).

In PCCRP2005, the scores for Iloilo City in the seven drivers were: cost of doing business, 6.04; dynamism of local economy, 6.16; linkages, 6.47; human resources, 6.65; infrastructures, 5.84; responsiveness, 5.96; and quality of life, 6.27.

In PCCRP2007, only six drivers were measured: cost of doing business, 7.27; dynamism of local economy, 4.75; human resource and training, 7.79; infrastructures, 7.40; LGU responsiveness, 6.87; quality of life, 6.75. ‘Linkages’ was stricken out from the list of “drivers”.

The qualitative meaning of the score is such that 1-2 is very low competitiveness where reform is necessary; 3-4 is below average and there is a need for improvement; 5 is average benchmark; 6-7 is above average with enhancement as the required intervention; and 8-10 is high which must be sustained.

Except for dynamism of local economy, all the other five (5) measures have above average ratings which have improved over time. The table of individual PCCRP scores of 22 mid-sized cities by drivers showed that in the overall scores, Iloilo City is 8th; in the cost of doing business, #18; in dynamism of local economy, #7; in human resource, #12; infrastructure, #9; responsiveness, #9; quality of life, #6. Dr. Macaranas explained that in the dynamism of local economy, the weight percentage was increased to 25% from the previous year’s equal weights (14.3%) for all the seven drivers. Add to this the change in the indicators which put emphasis on the firm’s growth and performance, accessibility to financing, and voice in the LGU, then you get into a situation of low scores cutting across all the surveyed cities.

The numbers could be more appreciated if we consider the indicators in the “dynamism of local economy”. For example, under firm’s growth and performance, three indicators were considered: the comparative increases in the firms revenue for three consecutive semesters (between 2006 and first semester of 2007, between first semester of 2007 and the second semester of 2007) and the number of registered businesses in the previous year. Businessmen respondents may not provide the true picture for fear that the survey may be used as basis for the tax assessment. Thus the 5.73 and 5.47 scores were easy to understand. What was incredible was the score of 1 for the number of registered businesses in 2006. The very low score of 1 is unimaginable in a highly urbanized city and does not reflect the real picture of the local business.

In “access to financing”, indicator for number of commercial and universal bank has a low score of 2, which is not believable considering that Iloilo City has more than one hundred bank offices and is the third most dense in bank to area ratio in the country. The other four indicators were reflective of the locals’ preference for bigger and more stable banks.

“Voice in the LGU” is another misrepresentation for a relatively low score especially at the time when the city was proud to declare that private-public partnership is alive and well in the city; in fact thriving to be the recognized best practice by many institutional partners. But ratings were mainly perceptions of the respondents and may not be reflective of the real picture. This is here where the credibility of the results and the integrity of the ranking system are put to a test. PCCRP has to be very convincing to explain the outcome; otherwise it would only breed dissatisfaction and disenchantment.

The top 5 midsized cities in the 2005 survey, where Iloilo City was ranked third for its overall score of 6.22, did not fare better in the ranking for 2007. Iloilo City slid to # 8 (with an overall score of 6.60); Bacolod was # 1 then (with a score of 6.34), but slid to # 17 (6.30); Batangas from #2 (6.23), went down to #20 (6.14); San Fernando, Pampanga from #4 (6.12), dropped to #11 (6.56); and Iligan from #5 (6.04), fell to #15 (6.42). It may be noted that though the ranks of Iloilo City, San Fernando in Pampanga, and Iligan fell, their scores increased. Of the five, Iloilo City has the highest score, thus the most competitive.

Among the midsized cities, General Santos, Tarlac, and Cabanatuan registered higher rank in 2007 than in 2005 and took the lead. New entrants Olongapo, San Pablo, Tagum and Lucena completed the top 7 for 2007.

What do these numbers tell us? PCCRP is intended for city leaders, who can use these numbers as a “policy and management tool to identify gaps and potentials in different areas of the competitiveness of their respective localities. It can also serve as guide for shapers of local policies in knowing the strengths and weaknesses of their respective urban areas.”

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