World Bank study shows decline in RP business environment

MANILA, Philippines – Doing business in the Philippines varies greatly among cities, a possible factor that brought the country’s overall ranking three notches down in the global study on doing business by the World Bank Group.

The new report, Doing Business in the Philippines 2008, was presented the other day by the International Finance Corp., the private sector investment arm of the World Bank Group.

In the Doing Business 2008 report covering 178 economies worldwide, the IFC noted that the Philippines fell to 133rd from its previous rank of 130 in 2007 as it registered lower rankings in areas such as “starting a business,” “registering property” and “trading across borders.”

In the latest report, the IFC cited how cities can improve their business environments by sharing and adopting best practices. It is the first subnational report of the Doing Business series to study the Philippines and was produced in partnership with the National Competitiveness Council and the Asian Institute of Management Policy Center.

The report covers 21 cities and three areas of regulation – starting a business, dealing with licenses, and registering property. It finds that city regulations and the interpretation and implementation of national laws vary greatly, thereby constraining or promoting local business activity.

For example, it takes 21 days in Mandaluyong to transfer a property title, compared to six weeks in Mandaue. To build a warehouse and connect basic utilities requires 23 procedures in Taguig and 33 in Mandaue and Pasig.

The report also finds that both national and subnational governments are responsible for creating a positive business environment. Starting a business in the 21 cities takes an average of 18 procedures, 11 of which are required nationally and seven by local governments.

“Doing Business in the Philippines is a diagnostic tool that provides actionable information for designing and implementing reforms to guide local officials in creating competitive environments to attract new investments,” said Federico Macaranas, Executive Director of the Asian Institute of Management Policy Center and a core member of the National Competitiveness Council.

“The new report can help cities identify opportunities for reform. IFC will help implement follow-up initiatives for simplifying business processes that will accelerate private sector development and improve people’s lives,” said Jesse Ang, IFC Resident Representative for the Philippines.

“The report also provides important insights for local governments and aims to catalyze reforms. Cities that do well in creating a good business climate are also likely to do well in poverty alleviation. The World Bank and IFC are therefore keen to support reform-minded local governments around the country,” added Bert Hofman, World Bank Country Director. – Ted Torres