DESPITE the boom enjoyed by online businesses in the country during the pandemic, a study by a US-based firm said the Philippines is not one of the best countries to put up these kinds of establishments.
Best Accounting Software, which reviews and rates financial software for small and medium enterprises, ranked the Philippines 78th out of 99 countries in terms of the Best Countries to Set Up an Online Business. The country only recorded an overall score of 34.34.
Why the low ranking? The country scored poorly in indicators that pertained to Internet, broadband connectivity, and especially in Internet security.
“Majority of countries most suited to starting an online business are located in Europe. Joined by the US, Canada and Singapore, these countries provide an all-around great starting point for your next business venture—but, the ‘perks’ of these locations tend to be met with a higher corporate tax rate,” it stated.
Best Accounting Software measured the performance of economies according to Internet Coverage and Penetration as well as Country Wealth and Ease of Processes.
For Internet Coverage and Penetration, the indicators are Mobile Internet Speed; Broadband Internet Speed; Number of Fixed Broadband Subscriptions; Internet Users; Social Media Users; Secure Internet Servers; and Online Purchases / Paying Bills Online.
In terms of mobile internet speed, the country averaged 17.83 mbps and scored 7.47 overall; Broadband Internet Speed, 27.07 and scored 9.85; Number of Fixed Broadband Subscriptions, 3.87 people per 100 population; and Internet Users, 67 percent of the population and scored 57.33.
In terms of Social Media Users, the Philippines averaged 67 percent of the population and scored 65.59 overall; and Bills Online, 9.9 percent of the population and scored 10.11 overall.
In terms of Secure Internet Servers, only 111 Filipinos per 1 million people had secure servers and gave the country a score of 0.04 overall. This is the lowest performance for this category compared to other Asean countries included in the ranking.
In terms of Country Wealth and Ease of Processes, this included Corporate Tax Rate; GNI (Gross National Income) per Capita; Individuals with a Finance Account; Payment Processing Providers; Economic Freedom; Number of Start-Up Procedures; Days Required to Start a Business; Cost of Start-Up Business Procedures; and Time Zones.
The Philippines Corporate Tax Rate is at 30 percent, the highest among the Asean countries in the ranking. This gave the country a score of 14.29 overall.
There’s an urgent push to bring down the corporate tax rate to 25 percent in the first year of implementation of the CREATE bill, now under deliberation in a bicameral conference committee of Congress.
GNI per capita of the country is at $3,850 which enabled the country to get a score of 3.62; about 34.5 percent of the population have finance accounts, which earned for it an overall score of 16.8; and economic freedom, a score of 61.21 overall.
In doing business, the country recorded 13 procedures to register a business, the most number among the Asean countries on the list. It takes 33 days to register a business in the country and costs 23.33 percent of GNI.
There are six countries with the same timezone as the Philippines; 237 co-work spaces, the second highest among the Asean countries on the list; digital skills, a score of 77.22, the third highest in the Asean nations on the list; logistics, a score of 39.53 overall; and postal development index score, 37.93.
“Each category was scored out of 100 (100 for the top-scoring country, 0 for the worst) and an average score created from all of the 20 categories,” Best Accounting Software explained.
Best Accounting Software said every country was given a point based on where it ranked between the highest-ranking and lowest-ranking countries. Countries with the best scores were given 100 points, while countries with the lowest scores were allocated zero points.
All of the countries in between these two scores received a score on a percentile basis, depending on where they ranked. The final score was achieved by taking an average of the 20 categories.
The ranking was based on research that covered over 200 countries worldwide, before finally featuring a comprehensive analysis of 99. Best Accounting Software said it included only countries where full data was available.