Phl needs to raise the bar after drop in WB ranking

CEBU, Philippines — The Philippines may have to work harder to create an even more hassle-free place to do business here.

The government has criticized the World Bank for the Philippines' steep drop to 124th place in its 2019 Doing Business Report from 113th place in 2018.

While the ranking seems "unfair" indeed, the Philippines must put more effort instead in raising the bar, said Rey Calooy, president of Filipino-Cebuano Business Club, a business group composed mostly of small and medium businesses.

"I think it is not also fair enough to fall by 11 notches despite that we have just passed Ease of Doing Business Act," Calooy told The FREEMAN yesterday.

"In fairness, our economic managers have been exerting efforts to streamline business processes," the Cebuano businessman said.

But Calooy also pointed out that some businesses still struggle to transact especially with local government units.

"However some of our members have noticed that in the LGU level, registering new business activities would take almost three months," he lamented.

He cited that these transactions include getting construction permits, getting electricity permits or requesting to transfer electrical post, starting a business, getting FDA (Food and Drug Administration) approval and getting BOC (Bureau of Customs) accreditation for imports and exports which is needed to trade across borders," Calooy stressed.

He said these are the areas the government must look into and improve.

The World Bank’s Doing Business 2019 report ranks 190 economies based on how easy it is to do business there, taking into account trading regulations, property rights, contract enforcement, investment laws, the availability of credit and a number of other factors.

Last week, the Department of Finance and the Department of Trade and Industry slammed the bank's report which it said contains "grossly inaccurate findings" in the Philippines.

The DOF has sent a letter of complaint to the Washington-based lender to "formally challenge portions of the data and methodology applied by the Bank that led to the Philippines’ drop in the DB rankings."

"We demand that the World Bank review the Philippines’ rating, and make a correction immediately given our country’s increases in the ease of doing business (EODB) scores, which was, unfortunately, offset by the grossly inaccurate and understated findings in the Getting Credit indicator of the Report," the agencies said in a joint statement.

"This correction should be done soon as the report could unduly compromise the Philippines’ standing among the investment community and negatively impact the country’s development," they said.

The country posted increases in 7 out of 10 indicators but still received a lower ranking, which was mainly due to its low Getting Credit score of 5, from 30 in 2018, the agencies said.

They attributed the low score to the "failure of the World Bank’s survey team to gather the correct information on the country’s credit information database."

"The Philippines should have obtained a higher score if the World Bank included data from all the credit bureaus," they said.

"Instead, it obtained its data only from the BAP Credit Bureau Inc, which has the smallest database of 1.7 million borrower-entrepreneurs."

"While the World Bank has taken governments to task by fostering an enabling environment characterized by efficient business regulations, so must the World Bank exercise responsibility and greater transparency in its methodology," the statement further read. (FREEMAN)