The Philippines slid a few notches down in a recent survey that compared the IT competitiveness of 66 economies around the world, indicating that the country needs to shape up to better compete with other countries.

The country ranked 12th in Asia Pacific and 51st overall this year, a downgrade from 2008 when it placed 10th in the region and 47th globally. The US topped the survey, with Singapore being the highest-placed Asian country at the 9th spot.

The study was conducted by the Economist Intelligence Unit (EIU), the research arm of the London-based magazine The Economist. The Business Software Alliance (BSA), an organization of the world’s largest software vendors, said it funded the survey but the EIU was solely responsible for its content.

The study noted that the Philippines improved significantly in the IT Infrastructure category and advanced slightly in Research and Development in 2009 compared to 2008.

However, it declined in Support for IT industry Development and even more so in the Human Capital area during the same period. The ratings for the Philippines in terms of Business Environment and Legal Environment remained more or less the same in both years.

Claro Parlade, the newly appointed BSA director for Software Policy in Asia Pacific, said in a recent press briefing that the Philippines did not fare badly in the survey but said the country needs to brush up in some areas, particularly in passing vital legislations, in order to stay competitive.

Parlade, a UP-educated lawyer who was active in the local IT industry prior to his appointment, is the first Filipino to occupy a regional position in the BSA. Now based in Singapore, the Philippines was the first stop of his regional swing to discuss the results of the survey.

“We’re doing fine, but skills development remains to be a long-term imperative for the Philippines,” said Parlade, noting that adjustment in IT employment category knocked the Philippines out of the top ten in Asia Pacific in favor of populous nations China and India.

The BSA exec said the Philippines could capitalize on its huge population, a luxury that Singapore does not have although the island-nation is equipped with the right HR skills.

Singapore, in fact, ranked third globally in the category of innovation environment, owing to its strong support for R&D and its IT firms’ record of patenting innovations. The Philippines, on the other hand, has one of the lowest R&D expenditure in the world.

Parlade said that while the local BPO sector contributed to the competitiveness of the Philippines, it is important for the country not to rely too much on being a cheap offshore destination.

“There would always be a country that would come along that will offer a much cheaper price,” he said.

“Innovation is a way for the country to differentiate itself in this area.”

Broadband penetration is also a good barometer of a country’s IT competitiveness, said Parlade, as he quoted a World Bank report which indicated that there is a 1.3-percent increase in a country’s GDP for every 10-percent uptick in broadband penetration.

Based on the survey, the Philippines is only 58th in the world in broadband connectivity and lags most countries in Asia.

Parlade said there are steps that the government can take without the need for huge capital investments. He said one of these include passing the proposed laws on cybercrime, data privacy, and copyright amendment pending in Congress.

“The creation of DICT (Department of ICT) would also institutionalize the e-government fund which can be used for various IT initiatives,” he said.