Hinrich Foundation Sustainable Trade Index Manila briefing highlights trade imperatives for policymakers, industry leaders and academics
MANILA, Philippines, Aug. 30, 2016 – The Hinrich Foundation and Asia Society Philippines co-hosted the Manila briefing on the Hinrich Foundation Sustainable Trade Index, with the support of the National Competitiveness Council on Aug. 25 at the Makati Shangri-La Hotel.
Presenting findings to assembled senior policymakers, industry leaders and academics were:
- Guillermo Luz, Private Sector Co-chairman of the National Competitiveness Council.
- Fernando Zobel de Ayala, President and COO of Ayala Corporation and Vice-Chair of Asia Society Philippines.
- Merle A. Hinrich, Chairman, Hinrich Foundation and Executive Chairman, Global Sources.
- Chris Clague, Senior Analyst, Economist Intelligence Unit, and;
- Stephen Olson, Research Fellow, Hinrich Foundation.
The Index, written by The Economist Intelligence Unit (EIU), measures the capacity of countries to participate in the international trade system in a manner that supports the long-term domestic and global goals of economic growth, environmental protection, and strengthening social capital.
The Hinrich Foundation’s objective in developing the Index is to bring attention to the full range of considerations for governments, policy advisors and businesses when contemplating the expansion of a country’s trading capacity.
Trade’s impact on poverty alleviation
“Trade has been instrumental in lifting hundreds of millions of people out of poverty,” said Chris Clague, senior editor at the EIU. “But, there needs to be a more meaningful discussion among policymakers, the private sector and civil society about how trade can be made more sustainable. This index, and the accompanying report, are designed to spark that discussion.”
Merle A. Hinrich, founder of the Hinrich Foundation, said in his opening remarks that the Philippines’ GDP was currently at a robust 6.8 percent. “We should be celebrating. It’s phenomenal. But then you pause and think about the poverty representing one quarter of the population. Is this sustainable? And you have to be very serious about that question. And this brings me to the importance of the sustainable trade index.
“This index is not about passing judgment on any government’s political orientation, actions or policies. Every country is different and some policies work better in one environment than another. We most sincerely trust that the progress made in the Philippines will endure and that the people will continue to share the benefits of global trade.”
Methodology and Philippines results
The Index covers 19 Asian economies plus the U.S. as a benchmark. An interactive workbook is provided to enable users to run scenarios by adjusting the weightings of the economic, social and environmental categories, which the Index refers to as pillars, as well as the indicators within each pillar.
The Philippines secured 13th place overall on the Index, with rankings of ninth in the economic pillar, sixth in environment and 19th in the social pillar. Details show:
- Philippines ranks ninth in the economic pillar, over-performing its overall ranking by four places. Factors contributing to this score include, as a middle-income economy, the Philippines’ modest growth in per capita GDP, low exchange rate volatility, small foreign trade and payments risk. However, it exhibits an underdeveloped manufacturing sector.
- Philippines ranks sixth in the environment pillar, ranking second place on air pollution, due to a relative lack of pollution-generating industries. The country has signed a number of treaties on environmental protection, equalling the performance of Japan, South Korea and the U.S., towards the top of this indicator.
- In the social pillar, the Philippines ranks 19th. While institutionalized migration does help to address poverty and high unemployment, poverty and inequality continues to be a challenge, with 25% of the population remaining below the poverty line and the country having the forth Highest Gini coefficient among covered economies. Poor scores on the corruption and political stability indicators contributed to the low ranking.
The Hinrich Foundation welcomes feedback on the Index, which can be downloaded along with an infographic and a workbook of the data at www.hinrichfoundation.com/trade-research/sustainable-trade-index.