The Philippines’ ranking in the World Bank (WB) Logistics Performance Index (LPI) 2018 has improved by 11 notches to 60th place out of 167 economies from 71st place in 2016.
According to WB’s latest LPI report entitled “Connecting to Compete 2018: Trade Logistics in the Global Economy,” the Philippines scored 2.9 this year, an improvement since its continued decline in ranking since 2010.
The Philippines’ score improved in most of the criteria except in efficiency of the clearance process and timeliness of shipments.
The biennial report ranks countries based on key criteria of logistics performance, including border clearance efficiency, infrastructure quality, timeliness of shipments, ease of arranging competitively priced shipments, competence and quality of logistics services, and ability to track and trace consignments.
“Across the board, we have seen most countries investing in logistics-related reforms, especially in the areas of building infrastructure and facilitating trade,” economist at the World Bank Group and report co-author Jean Francois-Arvis said in a statement.
“Despite these efforts to modernize services, developing countries face many remaining challenges. This explains a persistent gap between high- and low-income countries in terms of logistics performance,” he added.
But income alone is not the sole determinant of a country’s LPI score, noted the report. Vietnam, Thailand, Rwanda, China, and India all outperform their income groups. These countries tend to have access to seaports or large international transportation hubs.
For the second third time in a row, Germany is the top performer with a score of 4.19, while Somalia ranked last with 2.0.
In the efficiency of the clearance process (i.e., speed, simplicity, and predictability of formalities) by border control agencies including customs, the Philippines declined to 85th place from 78th place, while timeliness of shipments dropped to 100th from 70th.
For the quality of trade- and transport-related infrastructure (e.g., ports, railroads, roads, information technology), the country improved to 67th from 82nd previously, and also increased to 37th place from 60th place in the ease of arranging competitively priced shipments criteria.
For competence and quality of logistics services (e.g., transport operators, customs brokers), the country climbed to 69th from 77th and likewise rose to 57th from 73rd for the ability to track and trace consignments.
In the Association of Southeast Asian Nations (ASEAN), the Philippines placed sixth from seventh in 2016, with Singapore still leading as the city state ranked seventh overall, a decline from fifth previously. Aside from the Philippines, four other ASEAN economies improved this year—Thailand to 32nd from 45th, Vietnam 39th from 64th, Indonesia 46th from 63rd, and Laos 82nd from 152nd.
Others all fell in ranking with Malaysia down to 41st from 32nd, Brunei 80th from 70th, Cambodia 98th from 73rd, and Myanmar 137th from 113th.
“Logistics are the backbone of global trade,” noted Caroline Freund, director, macroeconomics, trade and investment global practice at the World Bank Group.
“As supply chains become more globally dispersed, the quality of a country’s logistics services can determine whether or not it can participate in the global economy,” Freund added.
Aside from Germany, this year’s other top 10 performers are Sweden, Belgium, Austria, Japan, Netherlands, Singapore, Denmark, United Kingdom, and Finland. The top 10 performing countries have remained relatively unchanged over the past few years and tend to include high-income countries in Europe. Of the top 30 performers, 24 are members of the Organization for Economic Co-operation and Development, the report noted.
“Consistently, high-income countries, particularly those in Western Europe, emerge as world leaders on logistics,” the report said. The LPI score of high-income countries is 48% higher, on average, than low-income countries.
The bottom 10 countries in the ranking, meanwhile, are composed of mostly low-income and lower-middle-income countries. These are either fragile economies affected by armed conflict, natural disasters, political unrest, or landlocked countries that are naturally challenged by geography or economies of scale in connecting to global supply chains. – Roumina Pablo
