PH among most improved in WB's Doing Business poll
MANILA, Philippines (3rd UPDATE) - The Philippines is among the top 10 most improved economies in business regulation over the past year, according to this year's edition of World Bank's Doing Business Survey.
The Philippines jumped to 108th place from its previous ranking of 138.
The report said regulatory reforms in three areas implemented by government helped improve the country's rankings.
One of the reforms put in place is the online filing and payment system, which made tax compliance easier for companies.
Other reforms include simplifying occupancy clearances and new regulations that guarantee borrowers' right to access data.
The report measures the ease with which a business undertakes 10 processes in its typical life cycle—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Based on these indicators, the country marked the biggest improvement in resolving insolvency.
Gains were also seen in getting credit, getting electricity, trading across borders, dealing with construction permits, and registering property.
The Philippines now ranks 6th among ASEAN countries behind Singapore (1), Malaysia (6), Thailand (18), Brunei (59) and Vietnam (99).
The Philippines ranks higher than its Southeast Asian neighbors Indonesia (120) and Cambodia (137). The survey ranks 189 economies worldwide.
The Philippines' 30-point jump is the biggest improvement among all countries this year, said National Competitive Council co-chair Guillermo Luz.
It is also the Philippines' biggest jump in 11 years. Luz noted that the country's ranking in the survey relatively saw no change in the past three years.
“It’s the best in 11 years and it is coming off three years of virtually no change. So we made a concerted effort to really change with respect to the ease of doing business,” he said.
He added that the country aims to continue improving its ranking in the coming years.
The goal for the Philippines is to be in the top-third of global rankings by 2016, which means another 25- to 30-point jump should be made in next year’s rankings.
“We haven’t done [the numbers], but the numbers are going to be aggressive and will be in the neighborhood of 25 to 30 jump, at least. And I would say that’s going to be the minimum jump that we should expect from the agencies, we need more as a country to make those respectable jumps,” said Luz.
According to World Bank's senior financial sector specialist Nataliya Mylenko, the Philippines should have been ranked 133 in last year's survey because of the reforms implemented that met the deadline but may have been overlooked.
She said last year's slide to 138 from 136 "shouldn't have happened."
Doing Business 2014
The "Doing Business 2014" report said many countries are making it easier for people to start and run a local business, with low-income economies moving more quickly than larger ones to improve.
"Regulation is a reality from the beginning of a firm's life to the end," the report said. "Navigating it can be complex and costly."
But in many areas, it added, "there has been remarkable progress in removing some of the biggest bureaucratic obstacles to private sector activity."
The rankings focus on what a small or medium-sized business faces in its home country, as opposed to how a multinational giant would fare in the same environment.
The data was based on surveys of more than 10,000 professionals, mostly people who routinely help administer or give advice on legal and regulatory issues in a country.
The countries are scored on a range of issues, from how many days and procedures does it take to start a business, to the length of time to get a power hookup, to the ease of credit and the cost of exporting or importing a container.
Aside from the Philippines, countries credited with progressing the most include Rwanda, Russia, Ukraine, Kosovo, Yugoslavia, Cote d'Ivoire, Burundi, Guatemala and the former Yugoslav Republic of Macedonia.
Singapore, HK top list
Singapore and Hong Kong, meanwhile, rank the world's best places to run a business, while mainland China remains far down the list.
The Southeast Asian entrepots and finance centers topped the survey for the eighth straight year, with New Zealand, the United States and Denmark rounding out the top five, as a year ago.
The lower ranks of the 189-country list was populated with African countries like Chad, the Central African Republic and Libya holding.
China, which was furious to receive a ranking of 91 last year and has pressured the World Bank to drop the 11-year-old study, fell five notches this year to 96th place and was leapfrogged by Russia.
China is likely to remain unhappy with its rating. It scored particularly poorly on the challenges of starting a business, dealing with construction permits, making tax payments and protecting investors.
Even in trade, the mainstay of the world's second largest economy, it ranked only 74 on the list.
Last year China pressed the new World Bank President Jim Yong Kim to scrap the survey.
Bin Han, China's alternate director at the bank, said then that the report "used wrong methodologies, failed to reflect facts (and) misled readers."
But Kim tied the issues the report raises to the Bank's campaign to end poverty.
"It is indisputable that 'Doing Business' has been an important catalyst in driving reforms around the world," he argued.
Augusto Lopez-Claros, Director of Global Indicators and Analysis at the Bank, called support for the study "overwhelming".
"The reason why the World Bank has decided to keep the aggregate ranking is, most importantly, that they still gives you a sense of the best practices in the world.
"Countries find that very useful."
But others criticized the study's methodology, pointing out hard-to-justify conclusions.
For instance, in how hard it is for a company to get an electricity hookup, Haiti, one of the poorest countries in the world, ranks 67, while energy-rich Canada ranks 145.
Under "protection for investors," underdeveloped Sierra Leone ranks 22, while Switzerland is at 170.
"It is an extremely low-quality report," one World Bank source told AFP.
"They rank things that have nothing to do with each other. It's no longer economics." -- With Agence France-Presse