Lack of reforms noted

By EMILIA NARNI J. DAVID, Senior Reporter

A FAILURE to implement reforms has meant the Philippines not having improved in the World Bank and International Finance Corp.’s latest global Doing Business report.

The country was ranked 138 out of 185 countries in the 2013 report, which compares to last year’s 136th out of 183. Malta and Barbados were new to this year’s rankings.

The country posted lower scores in seven of the 10 indicators monitored, particularly in starting a business where the Philippines fell to 161st from 158th previously.

“The time it takes to start a business is actually reasonable; the trouble is the number of procedures. The Philippines is one of the countries that have the greatest amount of procedures to start a business,” said Hans Shrader, IFC senior operations office, during a briefing yesterday.

The number of procedures increased to 16 this year from 15, well over the three seen in neighboring Malaysia or the one in Canada and New Zealand. The time it takes to start up a business also went up to 36 days from 35.

In terms of securing electricity, the country’s ranking fell to 57th from 53rd. The ranking for registering property also fell to 122nd from 120th, as did those for getting credit (129th from 127th), protecting investors through corporate governance (128th from 124th), paying taxes (143rd from 136th), and enforcing contracts and court efficiency (111th from 109th).

The Philippines saw improvements in rankings for trading across borders (53rd from 56th), resolving insolvency (165th from 166th) and dealing with construction permits (100th from 101st).

For construction permits, however, the country was still tagged as among those having the most number of procedures (29, compared to Hong Kong’s six).

It was also cited as one of the countries were resolving insolvency is the most difficult, with a recovery rate of just 4.9 cents to the dollar compared to Japan’s 92.8 cents. The country was also listed as among the slowest in resolving insolvencies, the process taking 5.7 years compared to Ireland’s 0.4, and the most costly at 38% of the estate from just 1% in Norway.

In terms of trade, however, it was cited as having one of the least costs ($585 /container versus Tajikistan’s $8,450).

“The report largely deals with what small and medium enterprises have to do to begin their business cycle which gives a measure on the efficiency of the bureaucratic environment for businesses in a country,” Mr. Shrader said.

The IFC noted the Philippines should look into the implementation of the Philippine Business Registry for Sole Proprietorships, reexamine the process to obtain a certificate of registration from the tax bureau and operationalize the Credit Information Corp.

The National Competitiveness Council (NCC), for its part, said it had gained approval for a new “game plan” that would significantly reduce the number of days and procedures needed to begin and end a business cycle.

The NCC is targeting to leap in the rankings to 109th in next year’s report and be in the top 70 by 2016.

“We are determined to get a big jump in the rankings,” NCC co-chairman Guillermo M. Luz said.