DOING BUSINESS IN THE PHILIPPINES...

Doing Business in the Philippines:

The Most Problematic Factors

Written by Fred, on 29-01-2008 14:06

We have an existing survey on which among two factors is more needed for Philippine progress -- more entrepreneurs or more opportunities. An overwhelming majority (83.3%), to date, says that we need more entrepreneurs. The survey , however, takes into consideration only two factors, which we could argue as constituting a problem -- a roadblock, if you will -- to Philippine progress. We are aware, of course, that the two factors mentioned are grossly inadequate if we are to discuss Philippine progress.

Just recently, the World Economic Forum released its Global Competitiveness Report for 2007-2008. The Philippines is ranked 71 in the Global Competitiveness Index rankings. Perhaps this is not something to be happy about, as the Philippines is 71 out of 131 countries/economies ranked, and lagging behind its neighbors, including Korea (11), Taiwan (14), Malaysia (21), Thailand (28), India (48), Indonesia (55), Vietnam (68) and Sri Lanka (70). The more intesting aspect of the Report is the portion on The Most Problematic Factors for Doing Business in the Philippines.* Half of the fourteen (14) identified most problematic factors are:

Factors - Percentage (%)
Corruption 22.30
Inadequate supply of infrastructure 17.80
Policy instability 15.20
Inefficient government bureaucracy 14.80
Government instability/coups 9.60
Tax rates 4.60
Tax regulations 3.60

The bottom 7 factors are: access to financing (3.30%), restrictive labor regulations (3.60%), crime and theft (2.30%), poor work ethic in national labor force (1.30%), inflation (1.10%), inadequately educated workforce (0.70%) and foreign currency regulations (0.50%).

It's very significant to note that half of the perceived problems -- the worst problems -- are attributable to the government. We are not here to denounce the government, although you could very well do that if you want. What we are after is for our government to do something about it. The problems, even if perceived ones, have been identified. The challenge of the government, therefore, is to address each and every one of them. While the Pinoy Entrepeneurs, and the Filipino people in general, could very well adhere to the words "ask not what your country can do for you - ask what you can do for your country," perhaps it's not unreasonable to ask our government what it can do -- specially if the worst problems are attributable to it. I would like to believe that PGMA, who is an economist, would see these "problems" as "challenges," just like how any entrepreneur would look at any problem.