At the National Competitiveness Council, we believe that city and municipality competitiveness is a key building block for national competitiveness. We also believe that with over 100 million people across 7,000 islands, it is important to create more economic engines in the form of LGUs 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 create a better investment environment for the country as a whole because there would now be more options available.

Our problem was that we couldn’t easily identify which cities would likely be good candidates as their growth engines. Moreover, cities themselves could not tell how they compared against others or if their competitive positions were improving or not over time. So, in 2012, we conceptualized the Cities/Municipalities Competitiveness Index and started organizing 17 Regional Competitiveness Committees across the nation to oversee a review.

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 an initial set of discussions with industry experts and academe, we worked jointly with our Regional Competitiveness Committees to draw up a list of indicators which would measure the competitiveness of cities and municipalities.

The criteria were initially categorized in three broad pillars – Economic Dynamism, Government Efficiency, and Infrastructure – for a total of 30 indicators. At first, not all data were readily available because records were not well maintained. Many cities had difficulty submitting data for measurement. Nonetheless, a total of 285 cities and municipalities entered the Index in the project’s first year and we announced our first ranking report in 2013. Since then, we have 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.

Last week, we announced the winners of our fifth annual Cities/Municipalities Competitiveness Index awards. From a modest start of 285 local government units 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 August 16 at the Philippine International Convention Center. When we first 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 attract 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 city by rank in our Cities/Municipalities Competitiveness Index (CMCI).

The CMCI is a great project for a number of reasons. First, it is large-scale data-gathering and measurement exercise of LGUs undertaken by the private sector, government agencies, academe, and the LGUs themselves. The data and results generated by the award 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 they are truly in search of competitive cities.

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

Full results are available on www.cmcindex.org.ph.

Guillermo M. Luz (gm.luz@competitive.org.ph) is the Private Sector Co-Chairman of the National Competitiveness Council.