The Philippines slid to 113th in the World Bank’s 2018 ranking of 190 economies in terms of ease of doing business from 99th place in the previous report, mainly because of the change in methodologies.
“This rank is not comparable to the one published in the Doing Business 2017 report, because of methodology refinements,” the World Bank said.
The report said the country’s score or the distance to frontier metric actually improved to 58.74 this year from 58.32 last year, with 100 considered the frontier, or the best performance.
It showed, however, that the Philippines ranked behind other Southeast Asian countries such as Singapore which placed 2nd globally; Malaysia, 24th; Thailand, 26th; Vietnam, 68th and Indonesia, 72nd. New Zealand, which received a score of 86.55, topped the global list, followed by Singapore, Denmark, Korea, Hong Kong and the United States.
A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by sorting the aggregate distance to frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.
The World Bank report titled “Doing Business 2018: Reforming to Create Jobs” noted the Philippines implemented two key reforms in the past year to improve the business climate for small and medium enterprises
The Philippines, represented by Quezon City, improved its business regulations as captured by the Doing Business indicators in absolute terms, which means the country was narrowing the gap with the global regulatory frontier.
The country also stood out regionally in resolving insolvency, with a global rank of 59. The Philippines scored 14 out of 16 possible points on the strength of the insolvency framework index, which was higher than the average of 12 points in OECD high-income economies.
“The focus of the Doing Business report is on promoting regulatory reform that strengthens the ability of the private sector to create jobs, lift people out of poverty and create more opportunities for the economy to prosper,” said Rita Ramalho, acting director of the World Bank’s Global Indicators Group which produced the report.
“The Philippines is making steady progress in carrying out reforms that can make it easier for entrepreneurs to start and operate a business,” Ramalho said.
The report said despite the continued reforms in the Philippines, small and medium-sized businesses still faced significant regulatory challenges, leaving room for further improvements especially in the areas of starting a business, enforcing contracts and protecting minority investors.
The Philippines poorest score was in the area of starting a business which ranked 173rd among 190 countries. It took 16 procedures and 28 days to start a business in the Philippines, compared to only one procedure and half a day in New Zealand, which topped the global ranking.
The report showed that governments in 119 economies carried out 264 business reforms in the past year to create jobs, attract investment and become more competitive.
Marking its 15th anniversary, the report notes that 3,188 business reforms have been carried out since it began monitoring the ease of doing business for domestic small and medium enterprises around the world.
“Job creation is one of the transformational gains that countries and communities can achieve when the private sector is allowed to flourish. Fair, efficient and transparent rules, which Doing Business promotes, improve governance and tackle corruption,” said World Bank chief executive Kristalina Georgieva.
Developing countries carried out 206 reforms, accounting for 78 percent of the total reforms, with Sub-Saharan Africa implementing 83 reforms, a record for a second consecutive year for the region, and South Asia implementing a record 20 reforms. A large number of reforms centered on improving access to credit and registering a new business, with 38 reforms each, as well as facilitating cross border trade, with 33 reforms.