EDITORIAL - 124th out of 190

Two government departments are questioning some of the assumptions used in the World Bank Group’s annual report on ease of doing business. The WB report showed the Philippines falling to 124th place among 190 economies, from last year’s 113th rank, which was also a deterioration from its previous 99th place.

The Philippines in fact saw its scores improve in most of the indicators in the Doing Business Report 2018. But the WB noted two areas where the scores worsened. One is in increased tax registration costs. The second is in trading across borders, with the addition of more inspections for importation. This is within the jurisdiction of the scandal-wracked Bureau of Customs. Red tape means facilitation fees, and it cannot be cut by an M16 rifle; this should be noteworthy for the new team in the BOC.

Meanwhile, the departments of finance and trade are demanding a review of the WB’s “grossly inaccurate and understated findings” in the getting credit indicator, wherein the country scored a dismal 5 out of 100 and ranked 184th.

The WB might yet correct its assessment in this area. What pulled the country down, however, was that others implemented reforms more efficiently, putting them ahead of the Philippines. The rankings in Southeast Asia reflect levels of foreign direct investment in the region. While the Philippines has seen higher FDI, the numbers pale when compared to those of its neighbors. When countries offer similar opportunities, investors normally prefer to put their money where it’s easier to do business.

Since the early post-war years when the country ranked second only to Japan in terms of economic and human development indicators in Asia, the Philippines has been left behind by its neighbors. What are they doing right? Making it easy to do business has to be one of the reasons.

This has been a trend for some time now: the country is registering progress and doing well in many aspects, but others are doing better. The government has lined up more reforms to improve the country’s ranking in the next Doing Business report. With additional effort, the country should be able not only to catch up with its neighbors but also to excel.