The World Bank’s Ease of Doing Business Report 2019 saw the Philippines go down from placing 113th to 124th out of the 190 countries. The primary reasons behind this fall in ranking seem to be the steep costs of business registration and policies of lengthy imports inspection.
What is interesting though is that the report announced on Wednesday also pointed at the country’s score actually improving from 56.32 to 57.32 when it came to the overall ease of doing business owing to the different reforms that has been introduced over the last year. This is a case of relativity and basically means that while the Philippines moved toward practical reforms and better practices, other countries were faster in implementing pro-business regulations.
Recent reforms by the country are aimed at increasing minority shareholders’ rights and functions in major corporations to strengthen their position and provide protection, making ownership and control frameworks clearer and standardized, while also streamlining processes of tax registration and business licensing to make the format simpler.
This year’s Ease of Business report was themed “Training for Reform” and mirrored a “new record in bureaucracy busting reforms for the domestic private sector,” said the World Bank. It was noted that 314 business reforms have been put in action over last year across 128 economies as compared to the 290 reforms that were implemented two years ago. Moreover, the reforms are to be focused on low-income to lower middle-income markets.
Scoring the overall ease of doing business takes into account 10 indicators: starting a business, dealing with construction permits, accessing electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Based on the reforms implemented, the top 10 improvers this year are Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, Côte d’Ivoire, Turkey and Rwanda.
Shanta Devarajan, the World Bank’s Senior Director for development economics and acting chief economist, was quoted stating that, “The diversity among the top improvers shows that economies of all sizes and income levels, and even those in conflict can advance the business climate for domestic small and medium enterprises. Doing Business provides a road map that different governments can use to increase business confidence, innovation, and growth and reduce corruption.”
With the new reforms to go into place, would the Philippines be able to climb back up the rank ladder? It would interesting to witness the shift as more emerging markets go steadily up the rungs.