Phl drops in World Bank survey; NCC: Phl needs to improve economic indicators, sectors

CEBU, Philippines - The National Competitiveness Council said the Philippines needs to improve certain indicators and sectors in setting up a business, after the country’s ranking dropped in the latest Ease of Doing Business survey released by the World Bank-International Finance Corporation.

The report released last week created confusion due to survey recalculations imposed by the Washington-based lender, which resulted to changes in the rankings.

Under the new methodology, the country's ranking slipped by nine notches to 95 from 86 a year ago. 

In a phone interview with The FREEMAN, Guillermo Luz, private sector co-chairman of NCC, asserted that in the revised ranking, the nation actually climbed to 95 from 108, as indicated by IFC's published report last year.

"The confusion arises from the new methodology by the World Bank; because of the transposition that we even don't understand," he said. He also explained the country was not informed on the new criteria adopted by the WB and therefore, was not able to submit new requirements.

"The country dropped ranking and scores in some indicators with the introduction of new criteria," NCC added in a statement.

The multilateral lender said it changed the ranking methodology, widened scope indicators and expanded data coverage, which resulted to drop in rankings.

"We are also convinced that if the new criteria were communicated earlier to us, we will be able to address those issues early and prevent downgrades in some indicators," the chairman further stated.

At the indicator level, the Philippines showed gains in Resolving Insolvency, Getting Electricity, Registering Property, Starting a Business and Paying Taxes. Among these indicators, the country gained efficiency in setting up electricity from rank 33 to 16, up by 17 notches.

On the other hand, the nation also saw declines in areas of Protecting Minority Investors, Dealing with Construction Permits, Trading across Borders, Getting Credit and Enforcing Contracts.

The NCC noted the gains were mostly associated with efficiency-related measures such as fewer procedures, shorter time periods and lower costs. In future reports, it stressed, quality-related procedures will become important as these are expanded in specific indicators.

Among the 10 ASEAN countries, the Philippines now ranks fifth in terms of ease of doing business. It is ahead of Brunei Darussalam, Indonesia, Cambodia, Lao PDR and Myanmar; it is likewise behind of Singapore (which tops first in the ranking among the 189 economies worldwide), Malaysia, Thailand and Vietnam.

In fact, Luz said, the Philippines had an improvement of 53 spots in the annual Doing Business report in the last four years.

"The ranking only looks up at the government processes in doing business here -- this is a more process-oriented assessment," he said, noting the council also tracks the World Economic Forum ranking which shows a macroeconomic picture to see where the Philippines positions in a wide range of global indicators.

The NCC official said the country has done measures to address the downsides in both micro and macro aspects of the economy. According to the council, governments and investors around the world consider the performance of the country in the survey as an indicator of how conductive an economy is for business.

"The results also show that our task force can be an effective group for driving change and improvements," he said, referring to the inter-agency group with which the NCC is part of. The task force is assigned to improve the ease of doing business in the country and work on reforms in government agencies regarding the indicators tracked by the survey.

Before the Aquino administration will end in 2016, the country is targeting to land in the top 60 and is actually now moving up, he said. "That's really our goal," he stressed, saying the Philippines remains in the bottom half of the global ranking.

"The NCC will continue to introduce changes designed to bring the country to the top-third of global rankings by 2016 from its starting point in the bottom-third of the tables three years ago," he said.

The key is to improve the downsides so the country can stand at par with the most business-friendly economies in the world, he said. — Carlo S. Lorenciana (FREEMAN)