THE Philippines jumped to No. 95 out of 189 economies in the World Bank-International Finance Corp. (IFC) Ease of Doing Business report released recently. The country’s latest ranking is an improvement of 13 countries from its rank of No. 108 based on last year’s report of the World Bank and its private investment arm, the IFC, as noted by the National Competitiveness Council (NCC).
Since 2011, the Philippines has overtaken 53 countries covered by the report. Still, the country remains at the halfway point of the global rankings. The NCC’s goal is to bring the country to the top 3 of global rankings by 2016 from its starting point in the bottom-third of the tables three years ago.
Based on the latest rankings, the Philippines also moved up to No. 5 among the members of the Association of Southeast Asian Nations (Asean) from No. 6 last year and No. 8 in 2012.
In a statement released in Washington, the World Bank noted that in the Philippines’s improvements in resolving insolvency, getting electricity, registering property and paying taxes enhanced the country’s ranking. Measured against global best practice or distance to frontier in business regulations, the country’s performance puts it in the same range as Vietnam and Indonesia, the World Bank said.
Aside from the improvement in the World Bank rankings, the Philippines has also earned investment-grade credit ratings from the major rating agencies, which should pave the way for a wave of foreign investments into the country.
In its latest report, the Bangko Sentral ng Pilipinas (BSP) said net foreign direct investments (FDI) inflows in August amounted to $299 million, more than twice the $141 million that came in a year ago. This brought the cumulative net FDI for the first eight months of 2014 to $4.3 billion, up 59 percent from $2.7 billion for the same period last year.
With four months remaining in 2014, the net FDI inflows already exceeded the $3.9 billion the Philippines received in the whole of 2013.
The NCC, in its statement, said it would continue to introduce changes to improve the country’s competitiveness rankings so as to make it more attractive to investors.
I note that when we talk of competitiveness we always look at the national government. The reality, however, is that local government units (LGUs) are also an important factor that investors must deal with in starting business in the Philippines.
The decentralization of government gave substantial power to the LGUs, including the regulation of businesses in their jurisdictions. This creates a situation where investors feel they have to deal with two separate governments, each with its own set of regulations and requirements, which in the end make it difficult to start and operate business.
I believe the focus should not be on the national government agencies alone. There should be an effort to harmonize or standardize regulations and requirements from the national to the local government level, with the overall objective of making it easy for investors to come in and set up shop here.
Many LGUs, particularly cities and urbanizing municipalities, now have at the helm progressive executives who are aware of the advantages and value of applying best business practices in governance.
These cities and municipalities are easy to spot because they stand out among the LGUs in terms of better infrastructure, better finances and an enhanced business environment, including regulations that make it easy for investors to establish businesses. They should serve as models for other LGUs.
To make it happen, the national government should strive to encourage all local governments to adopt a standard set of business regulations and permitting procedures, which do not duplicate or contradict regulations and procedures being implemented by national agencies.
This means that a company that wants to set up shop in the Philippines could expect the same simplified and efficient regulations and procedure in any city or town in the country.
These all translate to more employment and livelihood opportunities for their residents.
For comments, e-mail mbv.secretariat@gmail.com or visit www. mannyvillar.com.ph.
1 comment
YOu should run again, i will vote for you this time….esp. if there is no other option to the dark Lord