Philippines cuts ‘red tape’ in doing business

MANILA – The National Competitiveness Council (NCC) expects the Philippines to improve its global ranking in terms of ease of doing business after the government slashed some steps, cut the time and reduced the costs of putting up an enterprise.

In a press conference today, NCC co-chair Guillermo M. Luz expressed optimism that the country would climb by 20-25 notches in the Doing Business 2014 report, which the World Bank and the International Finance Corp (IFC) will release soon.

The Doing Business report measures the number of steps, the time it takes, and the costs incurred to start and run a business in a country.

Last year, the Philippines landed 138th place out of 185 countries covered by the Doing Business report. Only Laos was worse than the Philippines among the nine Asean countries covered by the survey.

“The Philippines ranked poorly in this report in the last three years,” Luz said, adding that the country would do well after improvements in at least six other competitiveness reports released in the past few months.

For one, the Philippines rose six notches to 59th in the World Economic Forum’s (WEF) Global Competitiveness Report released early this month.

“So far, we have a good record, a perfect record in fact. We’re up double-digit on some of those. We want to capitalize, take advantage and build on this trend,” Luz said.

He enumerated the improvements made this year in eight of the 10 Doing Business indicators, as follows:

• STARTING A BUSINESS – slashed to 11 steps and 11 days from the previous 16 and 36, respectively, the number of steps and days for a company to begin operations;

• DEALING WITH CONSTRUCTION PERMITS – reduced to 17 steps and 61 days from 29 and 84, respectively, the number of steps and days to secure clearances to build a warehouse;

• GETTING ELECTRICITY – cut to 4 steps and 50 days from 5 and 50, respectively, the number of steps and days to obtain electricity supply;

• REGISTERING PROPERTY – streamlined to 8 steps and 23 days from 8 and 39, respectively, the number of steps and days;

• GETTING CREDIT – improved to 5 the depth of credit information index (with a high of 6) from 3 previously and jacked up to 9 from 4 the strength of legal rights index (with a high of 10)–indices that measure accessibility of credit information, and protection of rights of borrowers and lenders, respectively;

• PROTECTING INVESTORS – improved to 7 from 2 previously (with a high of 10) the extent of disclosure index, jacked up to 9 from 3 (with a high of 10) the extent of director liability index, increased to 10 from 8 (with a high of 10) the ease of shareholder suits index;

• PAYING TAXES – reduced to 14 payments and 193 hours from 47 and 193 the number of taxes and hours to pay them; and

• TRADING ACROSS BORDERS – slashed to 5 and 6 the number of documents to export and import, respectively, from 7 and 8 previously, while also cutting to 15 and 12 from 15 and 14 the number of days to export and import, respectively.

The NCC has yet to determine the inroads made in the two remaining categories of enforcing contracts and resolving insolvency, Luz said.

In last year’s report, the Philippines’ ranking in 7 of the said 10 categories declined.

“I feel we deserve plus 20-25 ranks improved based on these reforms,” Luz said, adding that the country is on track to reaching the top 60 of the Doing Business rankings by 2016.

Trade Undersecretary Nora K. Terrado said the streamlined processes in securing permits have resulted in a 5-7 percent increase in business registrations during the first half. –Ben Arnold O. De Vera, InterAksyon.com