It’s about smart regulations, not about many regulations. That’s according to groups that track what makes it easy to do business, and the Philippines isn’t faring well in this area. In the 10th annual Doing Business report, released recently by the World Bank and the International Finance Corp., the Philippines ranked 138th among 185 economies, down two notches from the previous year, and from 134th in 2010.
In 10 basic processes of doing business, the Philippines failed to improve in seven: starting a business, getting electricity, registering property, obtaining credit, protecting investors, paying taxes and enforcing contracts. The country registered improvements only in three processes: dealing with construction permits, resolving insolvency and trading across borders.
Such ratings won’t be so bad if the country’s neighbors don’t fare any better, but this is not the case. The top three – no surprise here – were Singapore, Hong Kong and New Zealand, with the city state rating No. 1 for the seventh consecutive year. The United States placed fourth. Malaysia ranked 12th overall and third in East Asia and the Pacific, Thailand placed 18th overall and fifth in the region, and Vietnam was 99th overall and 15th in the region. Indonesia was rated better than the Philippines, placing 128th, and even Cambodia did better at 133rd.
It’s surely no coincidence that the rankings also reflect levels of foreign direct investments, and track results of surveys on national competitiveness. In previous surveys where the Philippines slipped in ranking, those behind the studies said the slide was not necessarily because the country did worse, but because others did better.
This time, those behind the Doing Business report noted that the Philippines failed to introduce reforms, implement existing policies, or improve processes that would make doing business easier. They emphasized that reducing the steps in doing business also reduced opportunities for corruption. This alone should make the government of daang matuwid or straight path give priority to making it easier to do business in this country. As the latest Doing Business report showed, the country has a long way to go.