By Elijah Joseph C. Tubayan
Reporter
THE PHILIPPINES managed to improve its score in the World Bank’s annual report that tracks economies’ competitiveness in ease of doing business, but its rank slipped as reforms to streamline transactions and strengthen stakeholder rights were offset by increased layers for import inspection and higher tax registration costs.
The World Bank’s Doing Business 2019 report, themed: “Training for Reform” and released on Wednesday evening, placed the Philippines at 124th out of the 190 economies tracked, down 11 places from 113th last year.
The Philippines’ ease of doing business overall score actually improved to 57.68 this year from 56.32 last year, as there were three reforms introduced, from two reforms the previous year. The score reflects an economy’s position vis-a-vis the best regulatory practice. A score closer to 100 indicates a more efficient business environment and stronger legal institutions.
The economies’ competitiveness was measured across several indicators, namely: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Labor market regulation data were not included in this year’s report, the World Bank clarified.
Quezon City was the report’s benchmark for the Philippines.
“In the Philippines, minority investor protections were strengthened by increasing shareholders’ rights and role in major corporate decisions and clarifying ownership and control structures,” the World Bank said in a statement.
“The Philippines issued new rules for companies listed on its stock exchange. Shareholders can now approve the appointment and dismissal of the auditor and companies must establish an audit committee composed exclusively of board members,” the report added.
“In the area of Starting a Business, the Philippines simplified tax registration and business licensing processes, but increased tax registration costs.”
The World Bank also took note of improvements in the Philippines’ risk management practices in the construction sector.
However, it noted that the Philippines made trading more difficult this year.
“Trading across borders was made more difficult by increasing the number of inspections for importing, thereby increasing the average time for border compliance,” the report said.
The top 10 economies in the Doing Business 2019 are New Zealand, Singapore, Denmark, which retained their first, second and third spots, respectively, for the second consecutive year, followed by Hong Kong, South Korea, Georgia, Norway, United States, United Kingdom and Macedonia.
“East Asia and Pacific region has made significant progress in enabling entrepreneurship and private enterprise. As the reform momentum continues building up in the region, those economies which lag behind have the opportunity to learn from the good practices adopted by their neighbors,” Rita Ramalho, senior manager of the World Bank’s Global Indicators Group, said in a statement.
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