From the 138th spot last year, the Philippines has jumped 30 notches in ease of doing business, according to the World Bank and International Finance Corporation. In the Doing Business 2014 report, the World Bank and IFC said the Philippines was among the top 10 economies that registered the biggest improvement in the business environment since the previous year.
The improvement in ranking is impressive, but placing 108th among 189 economies is not much to crow about. Especially since those at the top are the Philippines’ neighbors. Singapore held on to the No. 1 spot, followed as usual by Hong Kong. In Southeast Asia, the Philippines ranked behind Malaysia, Thailand, Brunei and Vietnam, and placed ahead of Indonesia, Cambodia and Laos.
It is no coincidence that the most business-friendly economies see high levels of job-generating foreign direct investment, with local entrepreneurs also accounting for a substantial chunk of national production. And it is surely no coincidence that the most business-friendly economies also rank high on international surveys on national competitiveness, transparency and good governance.
The Doing Business report is based on 10 indicators: starting a business, dealing with construction permits, getting electricity, registering property, obtaining credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.
The World Bank and IFC noted that the Philippine government implemented regulatory reforms in dealing with construction permits, obtaining credit and paying taxes. That leaves seven areas that can use reforms. The World Bank noted that starting a business is a particularly problematic area.
There are investors who will disagree with the assessment of significant reforms even in the three areas where the country registered the most improvement. Rising by 30 notches should encourage the Philippines to sustain and even accelerate the momentum of reforms.