Purisima complains to WB chief over 'erratic' Doing Business report

MANILA, Philippines - The Philippines escalated its complaints on the annual Doing Business report ranking to the highest official of the World Bank Group.

In a six-page letter, Finance Secretary Cesar Purisima wrote World Bank President Jim Yong Kim to protest the latest report's "glaring flaws and inconsistencies" that allegedly caused the Philippines to drop six notches.

The country ranked 103rd in the 2016 edition, down from 97th a year ago.

"We repeat - the report is published at a great disservice to your member countries and revisions in findings cannot undo the damage done to affected economies," Purisima said. 

"Further, the negative perceptions caused by the published reports have already impacted both policy and investment decisions and cannot be undone by revisions in rank and score," he added.

A copy of the letter was sent to reporters on Monday.

The finance chief, who also serves as the country's World Bank governor, reiterated questions he earlier raised against the report's "erratic" and "unsound" methodology that change year after year.

From 2011 to 2016 editions, Purisima noted that it was only in 2012 when the World Bank did not make unilateral changes to methodology.

Changes were made without prior consultations with member-countries, he said, hence they should have been applied on succeeding editions after they were implemented.

As a result, country rankings fluctuated over the past five years, both on original rankings and those using revised computations. 

"The erratic nature of the report methodology gives a sense that rules keep changing in the middle of the game. We think however that this case is more like changing the rules of the game, when the game is already over," Purisima explained.

"This is neither productive nor constructive for many of the economies and sectors reading the report," he added.

Aside from this, using a sole city - in the Philippines, Quezon City - as a representative for over-all business climate is also "inaccurate." He said areas where there are special economic zones were disregarded.

Locators in these zones are granted tax and non-tax incentives to operate and provide livelihood to the public.

"Businesses accredited to operate in these zones have simpler registration processes - evidence that the experience of doing business in the Philippines, or in any country for that matter, is never homogeneous," Purisima said.

Purisima and other finance officials have said that this was not the first time they questioned the Doing Business report's rankings. The finance chief added on his letter that other countries have also aired their criticisms.

"Many countries such as Malaysia, and even the private sector community in South Korea, have expressed the same sentiment," he said.

"With the chorus of criticism against the report's conduct and methodology - we wonder why the World Bank has failed to respond to serve its members better," he stressed.

Purisima's letter detailed the country's improvements on other competitiveness studies during the Aquino administration such as the World Economic Forum's Global Competitiveness Index and Heritage Foundation's Economic Freedom Index.

From 2013 to 2015, the Philippines improved from to 76th from 86th place in the WEF report, while its Heritage counterpart saw a 21-notch uptick to 76th place.

Copies of the letter were also sent to other World Bank executives, including Managing Director Sri Mulyani Indrawati and East Asia and Pacific Regional Vice President Axel Von Trotsenburg.