The Philippines drops its ranking in the 2016 Doing Business Report

28 October 2015    

The Philippines dropped from No. 95 to No. 103 of 189 economies, based on the 2016 Doing Business report of the World Bank - International Finance Corporation. Despite the drop, the Philippines has gained a total of 45 spots in the last five years.

The Doing Business purportedly measures regulatory quality and efficiency based on detailed diagnostics on the ease of doing business regulations in the life cycle of a business : starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

However, the Report has undergone methodological changes in four of the last five years, making it confusing and unreliable for measuring change, according to National Competitiveness Council private sector co-chairman Guillermo M. Luz. “Despite our efforts to introduce reform projects to improve the ease of doing business in the Philippines, IFC shows different sets of scores and rankings every year due to a change in methodology. The changes are applied retroactively so even prior years’ results are changed without our knowledge. This makes it difficult to tell whether we are on the right track or not using this instrument. It has become unreliable.”

The NCC, through its Gameplan for the Ease of Doing Business, has made steady improvements by streamlining processes and introducing reforms across a wide range of the indicators. Two significant reforms were launched to impact the Starting a Business indicator. The process to start a business was made simpler and easier as businesses will now just have to go through 6 steps and 8 days, down from the previous process of 16 steps and 34 days. In line with this, the Quezon City LGU has set up an online portal to facilitate business registration as well. Today,  a total  of 13.182  of filings at the SEC are now processed in one day . Likewise, filings have increased by   24%  for the period April- September  2015  with 12, 312 business registrations as compared to last year’s 9,912 over  the same period.

Among the other reforms implemented this year are in the “Paying Taxes” category. E-government initiatives were created which offer accessible and convenient online transactions for payroll-related payments for Philhealth and Pag-IBIG.

On-going initiatives are also being reinforced to further increase court efficiency and transparency. The E-Court system is now providing ease of access to court employees and judges to be more in control of their time and activities in connection to the cases they handle. It also allows the public to monitor the progress of cases handled in Quezon City, the local government unit used by the IFC in its study.  

Mr Luz questioned the relevance of the diagnostic tool moving forward. “We have done so much to improve doing business in the Philippines. However, the Doing Business Report doesn’t capture these initiatives and the constant methodology change and recalculation of ranking every year is of no help. We need consistency in the diagnostic tool to monitor ourselves, and better measure our performance. We recognize we need to continue introducing reforms and improvements in the ease of doing business and will continue to do so. Continuous improvement will take place through high levels of collaboration and cooperation across government agencies and between the public and private sectors.”