The Philippines is among the Asian economies that improved their standing in the 2025 IMD World Competitiveness Ranking (WCR), rising to 51st out of 69 economies, up from 52nd in 2024 and 2023.
The Switzerland-based business school IMD attributed the upward trajectory of Asian economies like Taiwan, Malaysia and the Philippines to strategic industrial policies and digital investments.
However, IMD noted several challenges for the Philippines, including the need to rekindle economic dynamism and growth, address inflation expectations and promote inclusive technology investments to boost labor productivity and entrepreneurship.
Improving education and healthcare to foster inclusive growth and reduce vulnerabilities, as well as adapting to shifting global economic and geopolitical dynamics, were also highlighted.
In specific categories, the Philippines ranked 33rd in economic performance, 51st in business efficiency, 46th in business efficiency (likely a typo, assuming the second “business efficiency” meant another category), and 60th in infrastructure. The country saw improvements in domestic economy, international trade and employment, but declined in international investment and prices.
The World Competitiveness Center’s annual report identified effective governance and institutional strength as key drivers for maintaining economic prosperity amid global socio-political fragmentation.
Switzerland reclaimed the top spot, followed by Singapore and Hong Kong.
“Government efficiency and fragmentation are highly connected,” said Arturo Bris, director of the IMD World Competitiveness Center (WCC), which has conducted the research for 37 years. “Economic and political consensus creates stability, and vice versa.”
The report said the top 10 economies all maintain strong institutional frameworks, robust infrastructure, and adaptive governance models, which are crucial for competitiveness in a fragmented world where currency risk and protecting domestic needs have become strategic priorities.
A new white paper from the WCC, “From Government Policy to Business Acumen: Strategizing for Competitiveness in a Fragmented World,” offers a practical guide for business executives navigating the global competitiveness landscape.
The 2025 report also highlighted that while traditional determinants of competitiveness – macroeconomic stability, business-friendly environments, and quality infrastructure – remain necessary, they are no longer sufficient. “Institutional quality is not merely an administrative feature but a strategic asset,” the report writers stated. “Countries that combine institutional strength with inclusive outcomes are able to withstand external shocks without yielding to internal fragmentation.”
Qatar’s entry into the top 10 underscored the growing competitiveness of Gulf economies, boosted by strategic investments in labor market efficiency and financial infrastructure. The UAE and Taiwan (Chinese Taipei) also made significant advances due to improvements in business dynamism, investment flows, and innovation capacity.
Canada, Germany, and Luxembourg showed the greatest improvements within the top 20, while Australia and Ireland saw the largest declines. Small, agile European economies continued to demonstrate that size is not a determining factor of economic competitiveness if governance is effective and policy is coherent.
The WCC annually revises its dataset, adding or removing criteria as appropriate. The International Institute for Management Development (IMD) has been developing leaders for over 75 years.
