NEW DELHI: The Philippines' ranking in a globalization index has slipped even as flows of goods and services, capital, information and people continued to improve worldwide despite more turbulent times.

The 2024 edition of the DHL Connectedness Index placed the Philippines in 65th out of 181 countries as of 2022, down seven notches from 58th in 2017.

Among the 28 East Asia and Pacific countries monitored in the report, the country ranked 13th. It joined 37 other countries which saw their levels of connectedness decline while 143 countries became more globally connected.

The change in the Philippines' overall score — 52.1 out of 100 from 52.4 five years earlier — was marginal, indicating that other countries had made larger gains. Overall, however, the country's score rose for a second year from a low hit in 2022.

Its rankings, meanwhile, in terms of four "pillars" — international trade, capital, information and people — and their depth and breadth also fell.

With regard to depth, or the size of international flows relative to domestic activity, the country ranked 126th with a score of 43.9, down from 120th and 44.1 in 2017.

The Philippines saw its highest ranking and score in terms of breadth — the distribution of flows across origin/destination countries — at 29th and 61.9, respectively, but these were also lower than the 27th and 62.4 posted five years earlier.

It was not ranked or scored with regard to the people pillar given a lack of data, but was 60th (from 50th) in terms of trade, 54th (from 45th) in terms of capital and 69th (from 62nd) with regard to information flows.

The drop in the information ranking came even as the Philippines' score for this measure rose.

The country with the largest share of the Philippines' international flows is the United States, accounting for 20 percent, followed by China (10 percent), Japan (8 percent), Singapore (5 percent) and South Korea (4 percent).

Singapore is the world's most globally connected country, the DHL report said, followed by the Netherlands and Ireland. Singapore also topped the depth rankings while the United Kingdom, 9th overall, led in terms of breadth.

Key findings

Despite the Covid-19 pandemic and geopolitical issues, globalization still reached a record high in 2022, DHL said, adding that latest data showed that it remained close to that level last year.

"The resilience and growth of international flows of trade, capital, information and people in the face of recent crises strongly rebuts the notion that globalization has gone into reverse," it said.

Steven Altman, director of the DHL Initiative on Globalization at New York University Stern School of Business' Center for the Future of Management, said: "Geopolitical threats and public policy shifts have led many to predict a fracturing of the world economy along geographic or geopolitical lines, or even a retreat from international to domestic business."

Altman, one of the authors of the DHL report, added that "it is important to recognize the resilience of global flows because a lopsided focus on the threats to globalization could make deglobalization a self-fulfilling prophecy."

This year's report noted that ties between the United States and China were continuing to diminish, but added that flows between the two were larger than almost every other pair or countries.

Russia and Europe also decoupled in the wake of the former's invasion of Ukraine, and among the major Group of 20 countries Russia saw the largest drop in global connectedness in 2022.

Despite the ongoing turbulence, global flows have not seen a split between rival geopolitical blocs. In particular, the share of trade between US-aligned and China-aligned groups rose during the pandemic but fell in the wake of the war in Ukraine.

"Excluding Russia, it is now back roughly to its pre-pandemic level," the report states.

The Philippines was categorized as leaning toward the US.

Corporate globalization, meanwhile, is also continuing to advance, and announced expansion plans were said to be at the highest relative to global gross domestic product (GDP) in over a decade.

The share of global trade to world GDP also hit a record high in 2022 but dipped last year, which was said to be consistent with trade slowing more than GDP when global growth slows. A substantial improvement, however, is expected this year.

Information flows have also increased but are stalling, with the report noting that US-China tensions were weighing on international research collaboration and that many countries had also restricted international data flows.

On the whole there remains substantial room for improvement, DHL said, as domestic flows still substantially exceed international flows.

On a scale of zero percent to 100 percent, with zero percent indicating no flows across borders and 100 percent a state where "borders and distance no longer matter at all," global connectedness currently only stands at 25 percent.