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By Darwin G. Amojelar Reporter
THE Philippines has become less
business-friendly, according to a report issued by the World Bank
and its private-sector investment arm, the International Finance
Corp. (IFC).
In its report titled “Doing
Business 2008,” the multilateral lender said the country’s
ranking in terms of ease of doing business slipped by three notches
to the 133rd spot from the 130th place last year, citing the slow
pace of reforms in the area of business regulation. The report
surveyed 178 economies. In the 2005 report, the Philippines landed
on the 121st spot.
Out of the 10 criteria used in
the study to measure a country’s competitiveness, the Philippines
scored low in terms of closing a business at 147th; starting a
business, 144th; protecting investors, 141st; paying taxes, 126th;
employing workers, 122nd and enforcing contracts, 113th. The
country’s ranking however improved in terms of trading across
borders, 57th; dealing with licenses, 77th; registering property,
86th; and getting credit, 97th.
“The Philippines did not do any
reform this year, many countries are reforming ... The slippage is
because it [has] not done anything,” Justin Yap, World Bank’s
private sector development specialist said in a video conference.
“[The Philippines] is a slow
reformer. I hope it will pick up. If a country can’t do reforming
it will [be] left behind,” Yap added. The report showed the
Philippines lagged behind its closest neighbors (see table).
Singapore topped the rankings for
the second consecutive year, followed by New Zealand and the United
States. Also ranking high on the list were Hong Kong, Demark, the
United Kingdom, Canada, Ireland, Australia and Iceland.
Jesse Ang, IFC acting country
manager for the Philippines and Thailand, said the report measures
regulatory performance that allows policymakers and reformers to
pinpoint areas for reform and to design a reform agenda.
“In the Philippines’ case,
the challenges have been identified and reforms are starting to be
implemented. Like in most cases, however, it takes a while for the
impact of reforms to be felt and reflected,” Ang said.
“Through more strategic and
focused implementation, the Philippines can quickly lower the cost
of doing business and attract more private sector capital,” he
added.
Ang said that focusing the
country’s efforts on reforms in these areas can help small and
medium enterprises to flourish. The World Bank identified reforms in
three key areas that could yield quick wins in terms of ease in
doing business: starting a business, property registration and
getting credit.
“The Philippines can quicken
the pace of ongoing and planned reforms to raise investment from its
current rate of 15 percent of GDP [gross domestic product] to a rate
more comparable to its neighboring countries, where investment rates
range well above 20 percent of GDP,” Maryse Gautier, World Bank
acting country director for the Philippines, said.
“Raising investment is
important not just for sustaining growth but for generating more
jobs to get many more Filipinos out of poverty,” she added.
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