Least business-friendly

Editorial

Doing business in the Philippines remains difficult, despite the pronouncement of President Benigno Aquino III to rid the bureaucracy of graft and corruption. The World Bank and its investment arm, International Finance Corp., ranked the Philippines 138th out of 185 countries in their 2013 Ease of Doing Business scorecard, down from 136th spot in 2012. The report said the Philippines “lags in implementation of regulatory reforms that would make it easier for local entrepreneurs to conduct their businesses.”

“The Philippines continues to improve its macroeconomic environment, but the implementation of necessary reforms to reduce the complexity and cost of doing business continues to lag, and needs higher prioritization to help assure more inclusive growth,” says IFC resident representative in the Philippines Jesse Ang.

The report noted that completing a business transaction in the Philippines required several complex steps for a number of days. Opening a business in the Philippines was also much more difficult than in other countries. “In New Zealand, it requires only one procedure and one day and costs 0.4 percent of income per capita; in the Philippines it takes 16 procedures [from 15] and 36 days and costs 18.1 percent of income per capita,” the 282-page report said.

The Philippines has the third most number of procedures, next to Venezuela with 17 and Equitorial Guinea with 18. On securing construction permits, the Philippines is one of the countries with the most number of procedures at 19 and the most number of days (84) to obtain it. By comparison, Hong Kong and New Zealand only have six procedures.

The report said 23 economies in East Asia and the Pacific had made their regulatory environment more business-friendly since 2005, and cited China as the one that had the greatest progress in improving business regulations.

Singapore topped the global ranking on the ease of doing business for the seventh consecutive year, while Hong Kong held the second spot. The report considered New Zealand, the United States, Denmark, Norway, the United Kingdom, South Korea, Georgia, and Australia as the countries with business-friendly regulations.

It is no wonder that the Philippines lags behind in Asia in attracting foreign investments. President Aquino and his Cabinet should take the report more seriously and take steps to improve the country’s business climate, instead of a pursuing political witchhunts that lead nowhere.