From 138th last year, Philippines moved up to 108th in the world’s business-friendly countries ranking released by the World Bank and International Finance Corporation yesterday.
In the latest Ease of Doing Business report, the Philippines improved in 7 out of 10 indicators, which is a complete turnaround from last year’s report that showed declines in 7 indicators.
Resolving insolvency or ability to pay debts is Philippines’ number 1 improvement. The report also showed that Philippines has improved in reducing time to recover credit, better access to credit information, making tax payments easier for companies, as well as faster processing of construction permits.
Nataliya Mylenko, World Bank’s senior financial sector specialist, stressed that the huge leap in the ranking was influenced by the Financial Rehabilitation and Insolvency Act, which took effect on August 31, 2010.
“This jump is the biggest because of a major reform which is the Financial Rehabilitation and Insolvency Act of 2010, finally we see the results of it as cases were solved because of this law,” she added.
The new law helped reduce the time to resolve insolvency from 5.7 years to 2.7 years and estate value from 38% to 22%.
The enactment of the Data Privacy Act of 2012 provides companies with better access to credit information, while processing of construction permits improved by reducing the processing time by 7 days.
Tax payments were made easier with the implementation of e-tax filing for Social Security System, PhilHealth and Pag-ibig contributions. The number of payments made in a year was reduced to 33.
“The indicator is counting each individual payment as filing, as a separate payment, automation of those procedures and time reduction lifted Philippines significantly in this indicator,” said Mylenko.
The report also showed that Philippines improved its trading across borders by eliminating 2 documents needed; while Twelve days were also reduced in getting electricity for businesses.
“These are very exciting times for the Philippines, it’s more fun in the Philippines to do business now,” said Mylenko.
The Philippines’ 30-point jump is the best improvement among all 189 countries this year, overtaking Southeast Asian neighbors Indonesia (120) and Cambodia (137).
The Philippines now ranks 6th among ASEAN countries behind Singapore (1), Malaysia (6), Thailand (18), Brunei (59) and Vietnam (99).