EDITORIAL - Doing business in the Philippines

Certain businessmen, especially those affected by congestion in the Port of Manila, are questioning the latest World Bank report showing the country improving in ease of doing business.

The World Bank Group, which ranked the Philippines nine notches better in its Doing Business 2015, attributed the questions to a new methodology in assessing 189 economies. The Philippines ranked 95th from the previous year’s 86th – an improvement under the revised “Distance to the Frontier” methodology.

Even with the new methodology, the Philippines ranked behind Southeast Asian neighbors Malaysia, Thailand and Vietnam. Singapore again emerged as the easiest place to do business in the world. The rankings tend to track levels of foreign direct investment in each economy. Despite being Asia’s second fastest growing economy, the Philippines lags behind its neighbors in FDI.

Some of the weaknesses are emphasized in the Doing Business report. Out of 10 indicators, the Philippines received negative marks in five: protecting investors, getting credit, dealing with construction permits, enforcing contracts, and trading across borders – a category that includes port operations.

The country received positive marks in starting a business, getting electricity, registering property, paying taxes and resolving insolvency. But within the region, the country still ranked worst in terms of starting a business, with 16 procedures against Singapore’s three. It takes an average of just four days and $440 to import a shipping container in Singapore, against 15 days and $915 in the Philippines.

Businessmen have in fact complained of longer waits lasting weeks or even months to clear their shipments in the Port of Manila. Owners of small and medium enterprises who have encountered mountains of red tape, especially at the local government level, may also wonder where those rosy figures on starting a business were culled.

The World Bank report is encouraging, but the government should listen to the opinions of businessmen to see where improvements are needed. The country is competing with more efficient neighbors for job-generating investments. There is a lot of catching up to do.