THE PHILIPPINES has dropped four spots in an index that ranked countries based on their ability to attract and retain talent.
The Philippines ranked 84th out of 134 economies in the 2023 Global Talent Competitiveness Index (GTCI) by business school Institut Européen d’Administration des Affaires (INSEAD) in collaboration with the Descartes Institute for the Future and the Human Capital Leadership Institute.
This was the Philippines’ lowest placement since the index started in 2013. Last year, the country ranked 80th out of 133 economies in the talent competitiveness index.
“The (Philippines) is regarded as a talent laggard because its GTCI score in the latter five-year period is lower than in the former period (down 2.9%) and because it has a lower-than-average score in GTCI 2023: 39.23 against an average of 47.77,” INSEAD said.
The Philippines was also one of the laggards in the Eastern, Southeastern Asia and Oceania group, ranking 13th out of 15 countries.
However, it ranked 8th within its income group, lower-middle income, which INSEAD said implies that 82% of the countries ranked lower.
Switzerland, Singapore and the United States remained the world’s top three most talent competitive countries. The rest of the top 10 included Denmark, the Netherlands, Finland, Norway, Australia, Sweden and the United Kingdom.
The GTCI measures how countries grow, attract, and retain talent through six pillars: enable, attract, grow, retain, vocational and technical skills and global knowledge skills.
The Philippines ranked the highest in the pillar of grow at 49th place with a score of 42.77, while it had the lowest rank of 102nd in the pillar of attract with a score of 40.04.
For the remaining pillars, the country ranked 54th in global knowledge skills, 86th in vocational and technical skills, 89th in enable, and 92nd in retain.
Felipe Monteiro, co-author of GTCI 2023 and INSEAD’s senior affiliate professor of strategy, said in an e-mail interview that the Philippines has seen a decline in employability.
“The data suggest that it has become more difficult to find skilled employees and that skills mismatching (skills gaps, skills shortages) might be a growing problem,” he said.
Mr. Monteiro said the Philippines can improve its ability to attract talent from overseas.
“There is also ample scope to become more open towards foreign business, including foreign direct investment (FDI),” he said.
Mr. Monteiro noted the strongest aspects of the country’s talent competitiveness is “the ability to grow talent and the innovative economy with a high share of high-value exports.”
“The country should build on its fairly strong tertiary education institutions, including good business schools, by increasing enrolment rates and by improving digital skills, among others,” he added.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the Philippines may have a hard time attracting talent because of the high cost of living as inflation remains high.
“[Another reason] is the limited financial resources, as manifested by the National Government budget deficit, for education, infrastructure, healthcare, and other social services as well as the lost productivity due to traffic congestion in various urban areas/central business districts amid lack of mass transport system,” he said in a Viber message.
Mr. Ricafort said the Philippines can increase its competitiveness by attracting more foreign direct investments in manufacturing, agriculture and other high-tech industries.
“These would facilitate more high-tech exports to the world but would require higher skills such as STEM (Science, Technology, Engineering, and Mathematics) courses, more graduates, and specialized schools in an effort to have a better equipped labor force for the higher end of the global supply and value chain,” he said.
Mr. Ricafort said the country should also develop high-tech areas or economic zones similar to Silicon Valley in California, “as the country positions in the higher end of the global supply chain/value chain as a source of advantage compared to other ASEAN countries with lower labor costs/cost of living which will also at least curb brain drain for Filipino talent to seek greener pastures overseas.” — Justine Irish D. Tabile