By Elijah Joseph C. Tubayan
THE PHILIPPINES has remained in the lower half of an annual gauge of economies’ competitiveness in terms of improving business conditions for entrepreneurs, a better score notwithstanding.
The World Bank Group’s Doing Business 2018 report, released yesterday, showed the Philippines ranking 113th out of 190 economies tracked, 16th among 25 in East Asia and the Pacific and seventh among the 11 Southeast Asian countries.
Economies were gauged against 10 indicators, namely: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The report also measures labor market regulation, which is not included in this year’s ranking.Data were updated as of June 1.
While the National Competitiveness Council (NCC) noted in a statement that the Philippines’ current rank was “down 14 places from its No. 99 position last year,” the World Bank cautioned that “this rank is not comparable to the one published in the Doing Business 2017 report, because of methodology refinements.”
The Philippines actually improved its score “marginally” to 58.74 this year from 58.32 — with a higher score reflecting “a more efficient business environment and stronger legal institutions.”
Both the NCC and the World Bank noted, however, that “other economies had made larger improvements than the Philippines.”
The NCC also said the impact of improvements introduced by the administration of President Rodrigo R. Duterte — who assumed office at the end of June last year — “may not have been fully experienced yet by the businessmen surveyed during the first five months of 2017.”
The Philippines improved its ranking in just one indicator — paying taxes (105th), the NCC noted.
“The Philippines made paying taxes easier by introducing a new electronic system for payment and collection of housing development fund contributions,” the report read.
The nine other indicators where the NCC deemed the Philippines needed to show improvement are starting a business (173rd), dealing with construction permits (101st), getting electricity (31st), registering property (114th), getting credit (142nd), trading across borders (99th), protecting minority investors (146th), enforcing contracts (149th) and resolving insolvency (59th).
“This means that reforms in some of these areas are not yet felt by the users at the front-line services, suggesting the need to improve the implementation of improvements in the system,” NCC said in its statement, which prescribed a host of reforms.
Still, Rita Ramalho, acting director of the World Bank’s Global Indicators Group that produces the report, said in a statement: “The Philippines is making steady progress in carrying out reforms that can make it easier for entrepreneurs to start and operate a business.”
Among others, the report noted that “[t]he Philippines reduced the time to get an electricity connection by implementing a new asset management system and by creating a new scheduling and planning office.”
Moreover, “the country stands out regionally in resolving insolvency, with a global rank of 59”.
However, “[d]espite the continued reforms in the Philippines, small and medium-sized businesses still face significant regulatory challenges, leaving room for further improvements especially in the areas of starting a business, enforcing contracts and protecting minority investors,” the report read.
“Moreover, the pace of reforms is faster in many other countries, including in several regional neighbors.”
Sought for comment, Philippine Chamber of Commerce and Industry president George T. Barcelon — who is part of the NCC’s working group — replied in a telephone interview: “We’ve been hearing that the compliance on the local governments… they’re not processing as quickly as we would like.”