AIM Policy Center unveils results of Philippine Cities Competitiveness Ranking Project.

FIVE METRO cities, five-mid-sized cities, and 10 small cities have been cited as the Philippines' most competitiveness Ranking Project (PCCRP) 2005. The findings of the biennial survey were revealed in a national conference held at the Inter-Continental Hotel Makati on February 13, 2006.

The AIM Policy Center completed the project in collaboration with the United State Agency for International Development (USAID), the Asia Foundation, and the German Technical Cooperation (GTZ). The PCCRP assesses the capacity of a city to provide an environment that nurtures the dynamism of its local enterprises and industries. It also assesses the general ability of a city to attract investments and entrepreneurs, and to uplift the living standards of its residents. Lastly, the project provides a benchmarking process that will aid individual cities in measuring competitiveness. City competitiveness itself is defined as "ability of a city to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people."

The PCCRP ranks the competitiveness of various cities using seven major drivers of competitiveness: cost of doing business, dynamism of local economy, linkages and accessibility, human resources and training, infrastructure, responsiveness of local government to business needs, and quality of life. These drivers were adopted from \ the World Competitiveness Yearbook of the Swiss-based International Institute for Management Development.

Sixty-five cities were surveyed in PCCRP 2005, the fourth edition of the project. Cities were categorized in to 13 metropolitan cities (cities comprising Metro Manila, Metro Cebu, and Metro Davao), 15 mid-sized cities (non-metro cities each with a population greater than 200,000), and 37 small cities (each with a population less than 200,000). Geographically, 30 cities are from Luzon, 14 from Visayas, and 21 from Mindanao.

In his presentation, Policy Center executive director Dr. Federico Macaranas named the following as the most competitive cities for each classification, in alphabetical order.

Metro: Davao, Las Piñas, Makati, MArikina, and Muntinlupa
Mid-size: Bacolod, Batangas, Iligan, Iloilo, and San Fernando, Pampanga
Small: Dagupan, Koronadal, Legaspi, Naga, Olongapo, San Fernando (La Union), Sta. Rosa, Surigao, Tagbiliran, and Tagum

The PCCRP aims to motivate local government leaders to become economic and development managers apart from being providers of outstanding public goods and services. The study is designed to inculcate these in local government leaders as well as businesses and civil society by promoting healthy competition among cities.

The growth of local government units was a prevalent theme in the speeches and remarks during the conference. Keynote speaker Sen. Francis Pangilinan, who pushes for livable communities and urban reform in his agenda, said, "Cities must become pockets of excellence… Each city is not competing against other cities; it is competing against itself. It must surpass its own self.

"All development is local," declared Mr. Jon Lindborg, USAID mission director. "A growing body of evidence shows that business growth is most supported at the local level."

Ms. Martina Vahlhaus, GTZ program manager, also exhorted local executives to "play a role in encouraging good practice in other cities and boost the local investment climate."


Methodogy

The PCCRP utilizes qualitative and quantitative criteria to assess city competitiveness vis-à-vis the major drivers of competitiveness. Each driver has corresponding indicators. Twenty-three indicators were quantitative, 45 perception- based.

Qualitative data. Sixty SME owners and managers per city answered a self- administered survey consisting of 45 questions.

Quantitative data. Fact-based city/provincial data were gathered from official government publications.

Focus Group Discussion. At the end of the survey phase, industry associations, local chamber officials, and businessmen were convened to discuss issues relevant to a city's overall performance.

The data were derived with the assistance of various academic partners: Angeles University Foundation, Ateneo de Davao University, Ateneo de Naga, Ateneo Zamboanga, De La Salle Lipa, De La Salle Dasmariñas, Mindanao State University - Iligan Institute of Technology, Notre Dame of Dadiangas College, Siliman University, St. Louis University, University of San Agustin, University of San Carlos, and Xavier University.

The AIM Policy Center validated the survey results and quantitative data before converting each score for all 70 indicators into a 10-point scale based on national and global benchmarks. Sadly, no city garnered the high-competitiveness score of 8- 10. Citing qualitative vs. quantitative scores, Dr. Macaranas observed, "The perception that cities are doing good is higher than the actual competitiveness result."


Factors of Competitiveness

Based on statistical results and primary information from focus group discussions, the interplay between factors was deemed necessary to become a competitive city. Foremost is the leadership value of local government officials, followed by the presence of a strong support system (business alliances and responsive civil society). Other factors influencing city competitiveness include quality of human resources, presence of good infrastructure, and a stable peace and order situation.


Best Practices of the Most Competitive Cities

1. Basics form the bedrock - roads and bridges, power, water, telecommunications
2. Quick, simplified response from the local government which brings down the cost of business.
3. Accurate and timely collection of statistics is valuable. Data build into policymaking, resulting in regulations and ordinances responsive to current and emerging needs.
4. Ideas should move people to action. The constituency must be engaged through online availability of development plans, text facility, radio programs, pamphlets, meetings, and participatory governance.
5. the key to getting people to change their behavior sometime lies with the smallest details of their immediate situation (Gladwell, the Tipping Point), such as health, cleanliness, etc.

The City Competitiveness Program (CCP) at AIM

CCP was established in 1997 with the end goal of helping Philippine urban centers cultivative competitive industries, promote healthy communities, and maximize the competitiveness potential of Philippine cities. Cities are the hubs of national economic development. But in most developing economies, opportunities are concentrated in major growth areas and poverty is perennial in rural areas. If economic opportunities were spread across the country, the problem of rural-urban migration could be alleviated.

Pinoy Cities on the Rise 2005, the official publication of PCCRP, will be available in April 2005. It will highlight the good practices of the most competitive cities. For the first time, the AIM Policy Center will come up with an assessment (at least a one-page summary) for each of the 65 cities.