By Beatrice M. Laforga and Jenina P. Ibañez
DOING BUSINESS in the Philippines is easier now thanks to recent reforms, according to the World Bank Doing Business 2020 report.
The country’s ranking rose to 95th place from 124th last year, while its score improved by several points to 62.8, the multilateral lender said yesterday.
Despite the rank improvement, Manila was still seventh among 10 Southeast Asian Nations, behind Singapore which ranked second, Malaysia at No. 12, Thailand at 21st, Brunei at 66th, Vietnam at No. 70 and Indonesia at 73rd.
It was only better than Cambodia (144), Laos (154) and Myanmar (165).
The Philippines made it easier to start a business by abolishing the minimum capital requirement for domestic companies, said the World Bank, which used Quezon City as a benchmark. It also made dealing with construction permits easier by improving coordination and streamlining the process for obtaining an occupancy certificate.
“The role of government policy in the daily operations of small and medium-sized domestic firms is a central focus of the Doing Business data,” the World Bank said. “The objective is to encourage regulation that is efficient, transparent, and easy to implement so that businesses can thrive.”
The Philippines also strengthened minority investor protection by requiring greater disclosure of transactions with interested parties and enhancing director liability for transactions with interested parties, according to the report.
The Philippines was among 42 economies that made doing business “easier” in at least three out of 10 areas after enforcing regulatory reforms, the World Bank said.
“Selecting the economies that implemented regulatory reforms in at least three topics and had the biggest improvements in their ease of doing business scores is intended to highlight economies with ongoing, broad-based reform programs,” the World Bank said.
“The improvement in the ease of doing business score is used to identify the top improvers because it allows a focus on the absolute improvement — in contrast with the relative improvement shown by a change in rankings — that economies have made in their regulatory environment for business,” it added.
The top 10 economies that made improvement across three or more areas were Saudi Arabia (62), Jordan (75), Togo (97), Bahrain (43), Tajikistan (106), Pakistan (108), Kuwait (83), China (31), India (63) and Nigeria (131).
“Governments can foster market-oriented development and broad-based growth by creating rules that help businesses launch, hire and expand,” World Bank Group President David Malpass said in a statement. “Removing barriers facing entrepreneurs generates better jobs, more tax revenues and higher incomes, all of which are necessary to reduce poverty and raise living standards,” he added.
The “big jump” in the Philippine ranking would help the country get a higher credit rating, improve business sentiment and attract more investments, Trade Secretary Ramon M. Lopez said at a separate briefing yesterday. “Hopefully it will create greater confidence in the Duterte administration.”
He promised more improvements once the country shifts to the electronic processing of requirements in starting a business and adopts an automatic approval and e-payment system along the way.
The full implementation of a law that promotes economic activity by increasing access to cheap credit particularly for micro, small and medium enterprises will “improve the business climate” in the Philippines and empower small entrepreneurs, Finance Secretary Carlos G. Dominguez III said in a separate statement.
Albay Rep. Jose Maria Clemente “Joey” S. Salceda said the “biggest source of rigidity” for businesses remains constitutional restrictions. But “reforms are now gaining traction that would thrust the Philippines into a more competitive economy as proven by the 29-notch leap,” he said.
The Philippines recently set up an Anti-Red Tape Authority, one of the offshoots of an Ease of Doing Business Act that President Rodrigo R. Duterte signed last year.
The World Bank report measured competitiveness of economies in doing business using several indicators: starting a business, employing workers, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.