‘TAKE DB REPORT SERIOUSLY’
Cebu business leaders said the government should take the drop in the Doing Business ranking seriously in the midst of economic challenges.
Small traders said that while initiatives have already been undertaken, such as the passage of the Ease of Doing Business Law last May, there are still areas that need to be improved on, particularly in the local government levels.
The 2019 World Bank Doing Business (DB) report showed a drop in the Philippines’ ranking by 11 notches, from 113 (2018) to 124 (2019). Last year’s release also reported a dive in the ranking, from the 99th spot to 113th.
Cebu Business Club president Gordon Alan Joseph said the National Government should take the fall in ranking very seriously, especially when coupled with the current problems of inflation, governance, the perception of worsening corruption and the possibility of removing investment incentives.
“I hope the government has an answer to this, but this fall is truly indicative of the institutional weaknesses the Philippines continues to suffer from,” said Joseph.
Improvements
The Philippines registered a 1.36-point increase in the ease of doing business score at 57.68, yet received a lower ranking.
According to the 2019 report, the Philippines made strides in a couple of indicators, particularly
on starting a business, dealing with construction permits and protecting minority investors.
However, the survey took note of the increased tax registration costs and made trading across borders more difficult by increasing the number of inspections for importing, increasing the average time for border compliance.
According to Rey Calooy, president of Filipino-Cebu Business Club Inc. said they still suffer from slow processing of permits, particularly at the local level.
“I think it is not also fair that we fell 11 notches, despite the passage of the Ease of Doing Business Law. Our economic managers have been exerting efforts to streamline business proccesses. However, some of our members have noticed in the LGU (local government unit) level that registering new business activities would take almost three months, like registration or dealing with construction permits, among others,” said Calooy.
“There are still areas that we need to work on and improve,” he added.
He cited the access to finance to small and medium enterprises (SMEs) as among those that need improvement.
This year, the country ranked 166th in starting a business, 94th in dealing with construction permits, 29th in getting electricity, 116th in registering property, 184th in getting credit, 132nd in protecting minority investors, 94th in paying taxes, 104th in trading across borders, 151st in enforcing contracts, and 63rd in resolving insolvency.
The study was done among 190 economies.
Protest
Meanwhile, The Department of Finance (DOF) and the Department of Trade and Industry (DTI) aren’t convinced by the report, describing it “grossly inaccurate.”
“We demand that the World Bank review the Philippines’ rating, and make a correction immediately, given our country’s increases in the Ease of Doing Business (EODB) scores, which was, unfortunately, offset by the grossly inaccurate and understated findings in the getting credit indicator of the report,” the joint statement said.
The agencies told World Bank to make corrections on the report, as “this could unduly compromise the Philippines’ standing among the investment community and negatively impact the country’s development, considering that this document is widely used as a reference by investors and survey organizations.”
“As a highly respected institution, the World Bank has a responsibility to ensure that an economy is not unduly disadvantaged and that its report reflect the realities on the ground,” the joint statement said.
The DOF has submitted a letter to the World Bank challenging the data used in the report.
The Philippines was behind some of its Southeast Asian neighbors, with Singapore placing second, Malaysia (15th), Thailand (27th), Brunei Darussalam (55th), Vietnam (69th) and Indonesia (73rd).
Cambodia was in 138th place, Laos 154th, and Myanmar 171st.
I hope the government has an answer to this, but this fall is truly indicative of the institutional weaknesses the Philippines continues to suffer from.
GORDON ALAN JOSEPH
Cebu Business Club president