THE Philippines’ ranking in ease of doing business fell two notches mainly because of lack of regulatory reforms, according to a report issued by the World Bank and its private-sector investment arm, the International Finance Corp. (IFC).

In a report titled “Doing Business 2012: Doing Business in a More Transparent World,” the multilateral lenders said the country’s ranking in terms of ease of doing business dropped by two notches to 136th out of 183 economies.

Las year, the Philippines ranked 134th. “While the Philippines has passed several laws and initiated programs to improve its regulatory environment, it is imperative that implementation has to happen more quickly and in full,” Jesse Ang, IFC resident representative to the Philippines, said.

Globally, Singapore and Hong Kong SAR (China) provide the friendliest regulatory environments for local entrepreneurs. China has advanced the most in rank over the past six years within East Asia and the Pacific region.

Doing Business analyzes regulations affecting domestic firms and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency, and trading across borders.

This year, the rankings on ease of doing business have expanded to include indicators on getting electricity. The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong, China; and Singapore.

The IFC official said that the Philippines needs to put up the necessary regulatory infrastructure to improve businesses’ lot in the country. “In particular, improvements such as setting up the Credit Information Corporation and fully operating the Philippine Business Registry, have to be sped up to make a real difference for domestic entrepreneurs,” he added.

Previous year’s rankings were back-calculated by the report to account for the addition of new indicators, data corrections, and methodology changes in existing indicators. Because of the changes, the Philippines’ initial ranking last year of 148 moved to 136.

Despite the country’s low ranking, Chiyo Kanda, World Bank acting country director, said that the Philippines’ adoption of a new insolvency law, which provides a legal framework for liquidation and reorganization of financially distressed companies is a significant reform that will help improve local business climate.

“Accelerating reforms to further simplify requirements for opening and closing a business will unleash the power of small and medium enterprises to create more jobs, thus lessening poverty in the country,” Kanda added. Of the region’s 24 economies, 14 improved business regulations in the past year. The Solomon Islands, Tonga, Vanuatu, and Malaysia improved in three or more areas measured by Doing Business. Malaysia rose five places in the global ranking, to 18, by implementing regulatory reforms—including a new one-stop shop for start-ups, computerization of commercial courts, and improved insolvency proceedings. Brunei Darussalam’s rank climbed to 83, partly because the country made it easier for businesses to get an electrical connection.