NCC eyes another 30-notch jump (BusinessMirror)

image by businessmirrorThe National Competitiveness Council (NCC) aims to improve the country’s ranking in the World Bank’s Doing Business report by at least another 30 notches next year to put the Philippines closer to its goal of making it to the upper third of the scale by 2016.

In a briefing on the Asian launch of the 2014 Doing Business report on Tuesday, NCC Private Sector Co-Chairman Guillermo Luz said the Philippines achieved its target of improving the country’s ranking by 30 notches in the survey this year.

If the country achieves this target again next year, the Philippines will be in the neighborhood of countries in the double-digit rank. Assuming that the 30-notch improvement happens next year, the country’s rank will be 78th overall.

This year the Philippines jumped 30 notches to 108th overall from 138th last year. This is the highest improvement that the country posted in 11 years since the Doing Business rankings were released, and currently the highest improvement made by any single country in the 2014 survey worldwide.

2014 top ten most improved in terms of ranking“We did place an original forecast of 27 to 30 in the first game plan and we’re happy to have met exactly that target of 30. For us go get to the top third, we need to do at least, almost averaging 30 a year, moving forward. It was actually crucial for us to hit 30 in the first year, just to show it could be done. We haven’t done the Game Plan 2.0, as I said the numbers will be aggressive of about 25 to 30 jump at least and I would say that will be the minimum jump that we should expect from the agencies. We want more, we need more as a country to make those respectable jumps,” Luz said.

“So give us a little more time, a few more days to begin cracking down on the numbers for 2.0 and then we will release it after we meet the task force to discuss the targets with them. Maybe by the end of November, we’ll have the new numbers out, but I will expect it to be in the neighborhood of at least a 30[-notch] jump,” he explained.

Luz said this year’s ranking could have still been higher if only some of the reforms that the country implemented made it to the June 1 deadline for the Doing Business report.

He said meeting the deadline of the World Bank doesn’t only mean having the reforms on paper but implementing them and being able to measure the results.

Some examples of the reforms that did not meet the June 1 cut-off included the implementing rules and regulations (IRR) of the Financial Rehabilitation and Insolvency Act (FRIA) of 2010. Having the FRIA lapse into law was one of the biggest improvements that the country recorded this year but having an IRR and being able to measure its effects will greatly improve the country’s overall ranking in the Doing Business Report next year.

This year the indicator on resolving insolvency saw a 65-notch jump in the country’s ranking in this indicator. The country’s ranking in terms of this indicator improved to 100th from 165th last year.

The World Bank noted that the FRIA will be able to reduce the time it takes to resolve insolvency to 2.7 years from 5.7 years; reduce costs to 22 percent of estate value from 38 percent; and increase the recovery rate to 29.9 US cents from 4.9 US cents. 

Another measure that did not meet the June 1 deadline is the installation of the e-court system as well as the online registration of businesses. Luz said the e-court system needs a full year to implement and measure, while the online registration is already in full swing and achieving critical mass in terms of those availing of the service.

Meanwhile, in terms of the 2014 Doing Business report, the country showed improvements in seven of the 10 indicators. It posted declines in two indicators and made no change in its ranking in the indicator on protecting investors.

Data showed that the Philippines did well in resolving insolvency by advancing 65 notches to 100th place overall; getting credit, up 43 notches to 86th place; and getting electricity, up 24 places to 33rd overall.

Other indicators that posted improvements in ranking were in paying taxes, which saw an increase of 12 notches to 131st; trading across borders, up 11 places to 42nd; and improved one rank each in dealing with construction permits to 99th and registering property to 121st.

Starting a business was the indicator which saw the largest decline in ranking. It slipped nine places to 170th from 161st, followed by enforcing contracts, down three places to 114th.

The World Bank explained that the decline in the country’s ranking in starting a business was largely due to higher improvements made in other countries while in enforcing contracts, this was largely due to the fact that court cases on contracts take a while to try and rule.

Overall, the performance of the country was commendable. Already, the Philippines finds itself in a better “neighborhood” in the rankings, alongside countries like Costa Rica, Belize, Granada and Paraguay, among others.

“We need an environment where various permits and licenses are rationalized, where compliance with rules and regulations does not create unreasonable burden, where rules and regulations are clear and transparent, where creditworthy firms can obtain financing even if they do not have real estate to offer as a collateral, and where disputes are resolved efficiently, fairly and at low cost,” World Bank Country Director for the Philippines Motoo Konishi said.

“We hope the Philippines continues on the path of reform. As we have heard, business registration and renewal of various permits remains an area that needs major improvements,” he added.

Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises finds that since 2005, some 22 of 23 economies in East Asia and the Pacific have made their regulatory environment more business-friendly.

Among the region’s economies, China made the greatest progress during that time in improving business regulations for local entrepreneurs.

In Photo: Panelists (from left) Motoo Konishi, World Bank country director; Jesse Ang, International Finance Corp. resident representative; Guillermo Luz, National Competitiveness Council private sector co-chairman; and Nataliya Mylenko, senior financial sector specialist of the World Bank Group, discuss the World Bank 2014 Doing Business report on Tuesday. (Nonie Reyes)