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How competitive are cities and municipalities?

We at the National Competitiveness Council believe that city and municipality competitiveness is a key building block for national competitiveness. We also believe that with over 100 million people across 7,100 islands, it is important to create more economic engines in the form of local government units to drive long-term economic growth and development. Building these economic engines will disperse investment and job opportunities and spur inclusive growth. It will also spread risk for companies looking for new business locations and, because there will now be more options available, create a better investment environment for the country.

Our problem was that we couldn’t easily identify the cities likely to be good candidates as growth engines. Moreover, the cities themselves could not tell how they compared against others, or if their competitive positions were improving over time—or not. Thus, in 2012 we conceptualized the Cities/Municipalities Competitiveness Index (CMCI) and began organizing 17 regional competitiveness committees (RCCs) nationwide to oversee a review.

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Our goal was to measure all cities and municipalities (the Philippines has 1,634) annually and to eventually institutionalize and embed this data-gathering and analysis in cities so they could use their own data to plan their futures. Following initial discussions with industry experts and academicians, we worked with our RCCs to draw up a list of indicators that would measure the competitiveness of cities and municipalities.

The criteria were initially categorized under three broad pillars—economic dynamism, government efficiency, and infrastructure—for a total of 30 indicators. Not all data were readily available at first because records were not well maintained. Many cities had difficulty submitting data for measurement. Nonetheless, a total of 285 cities and municipalities entered the CMCI in the project’s first year, and we announced our first ranking report in 2013. We have since made some adjustments in the indicators to focus on readily available data and added a fourth pillar—resilience—because this had become increasingly important for cities and municipalities in the age of climate change.

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Last week, we announced the winners of our fifth annual Cities/Municipalities Competitiveness Index awards. From a modest 285 LGUs in 2013, we now have 1,487 cities and municipalities, or over 90 percent of the country covered. The awarding has become a much-anticipated event by mayors and city administrators, and 2,000 people attended the awards ceremony on Aug. 16 at the Philippine International Convention Center.

When we started, many people doubted that mayors would want their cities to participate and be measured. But we argued that those who understood competitiveness would realize that the more competitive they are, the easier it would be for them to draw investments and generate jobs. They also realized that the more they measured their city, the more effective they would be as executives and managers. Today, it is not unusual for me to meet a mayor who introduces his or her city by rank in our CMCI.

The CMCI is a great project for a number of reasons. First, it is a large-scale data-gathering and measurement exercise undertaken by the private sector, government agencies, academe, and the LGUs themselves. The data and results generated by the CMCI have become a benchmark for government agencies and investors to more closely monitor cities and make decisions, whether for budgeting or investing. Second, there is obvious pride in winning. LGUs send as many as 30 people on stage to receive their awards. Third, the private sector is heavily involved, not only in data-gathering but also in giving out the awards, underscoring the fact that it is truly in search of competitive cities.

The old adage that “what gets measured, gets managed” rings true for Philippine cities. Local competitiveness will lead to better delivery of services and economic development in cities—the building blocks of nations.

Full results are available at www.cmci.org.ph.

Guillermo M. Luz ([email protected] org.ph) is the private-sector cochair of the National Competitiveness Council.

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