Philippines slips 2 notches in Doing Business report

THE Philippines has become less business-friendly for local firms mostly because of its poor score in terms of dealing with construction permits, according to a report issued by the World Bank and its private-sector investment arm, the International Finance Corp. (IFC). In their report titled “Doing Business 2011,” the multilateral lenders said the country’s ranking in terms of ease of doing business fell by two notches to 148th from the 146th last year.

The report surveyed 183 economies.

Out of the nine criteria used in the study to measure a country’s competitiveness, the Philippines scored poor in terms of dealing with construction permits at 156th place from last year’s 111th.

“The Philippines made construction permitting more cumbersome through updated electricity connection costs,” the report said.

The report said getting construction permits takes 26 procedures from last year’s 24 procedures, while the cost rose 778.5 percent of income per capita from only 81.7 percent previously.

The number of days in accomplishing the construction permits, however, improved to 169 days from 203.

The report said 57 percent of new construction in the Philippines is considered illegal.

The Philippines’ score in terms of starting a business however improved to 156th from 162nd. The country also fared better in terms of paying taxes, 124th from 135th; and trading across borders, 61st from 68th.

Its ranking in registering property remained at 102nd; protecting investors, 132nd; enforcing contracts, 118th; and closing a business, 153rd.

The multilateral lenders said areas of business regulation reform for the Philippines are starting a business, trading across borders and dealing with construction permits.

The Philippines also continued to lag behind most of its neighbors, with Thailand at 19th place; Malaysia, 21st; Vietnam, 78th; and Indonesia, 121st.

Jesse Ang, IFC Philippines representative said the report can serve as a global benchmark for the new Philippine government as it begins regulatory reforms.

“These should help the country to keep pace with other economies in enabling local small and mid-sized companies to join the formal sector, become more competitive, and create more jobs,” the IFC official said.

The report said emerging-market economies such as Indonesia, Malaysia, and Vietnam took the lead, easing business start-up, permitting, and property registration, and improving credit information sharing.

Malaysia reduced the time and cost to transfer property by introducing more online services. Singapore, Hong Kong, New Zealand, United Kingdom and United States lead the world in the ease of doing business for local firms.

“New technology underpins regulatory best practice around the world,” Janamitra Devan, vice president for Financial and Private Sector Development at the World Bank Group said.

“Technology makes compliance easier, less costly, and more transparent,” Deval added. –DARWIN G. AMOJELAR SENIOR REPORTER, Manila Times