PHL slams 'Doing Business' report in complaint letter to WB chief

The Philippines has raised directly to the World Bank president, Jim Yong Kim, its objections on how the “Doing Business” report is done via a complaint letter Finance Secretary Cesar Purisima sent to the WB chief.

 

In the report's latest edition, the Philippines placed eight steps lower at 165th among 189 economies in terms of the ease of starting a business.

 

The latest "Doing Business" report found developing economies in general stepped up the pace of regulatory changes designed to make it easier to set up and operate a business, with particular improvements seen in cutting red tape for new entrants.

 

Reuters has reported that some have argued the DBR methodology is biased against all regulations and China and others have said it unfairly stigmatizes fast-growing economies, prompting changes to the way the scores were calculated this year.

 

"We are not alone in voicing critiques on the report... With the chorus of criticism against the report's conduct and methodology, we wonder why the World Bank has failed to respond to serve its members better," Purisima said. 

 

Overall, the 85 developing economies covered in the scorecard implemented 169 business reforms during the past year, compared with 154 reforms the previous year, the World Bank said.

 

The most improvements came in the time it takes to obtain a permit for starting a business and associated costs. The average time is now just 20 days, compared to 51 days in 2003, when the report was first published.

 

Purisima took issue with the frequent changes made to the methodologies, resulting in the retroactive revision of the rankings a year after their publication.  

 

"The 2016 edition again brings to the fore its most glaring flaws and inconsistencies, doing member countries like the Philippines a great disservice by damaging investor perceptions while serving as an unhelpful and unreliable basis for further improvement," the finance secretary said.

 

Keenly eyed by developing countries seeking to attract international investment, the Doing Business Report (DBR) is the World Bank's most-downloaded publication.

 

"The Philippines is keen to use competitiveness studies as tools for improvement, but reports like the Doing Business Report lose their utility and value if methodologies change almost yearly and if they are inconsistent with majority of the other reports gauging improvement across a variety of indicators," Purisima said. 

 

More troubling, according to the DOF, is the report's reliance on information collected through surveys instead of empirical data.

 

The report failed to give "due consideration" to on-the-ground reforms and improvements, the Finance chief said, citing the implementation of the Integrated Business Registration System that supposedly processed 94 percent of applications within a business day or even less. 

 

"There is also an over-reliance of looking at legislation as evidence of reforms, when in fact most of the effective reforms done in the Philippines have been administrative and executive in nature and do not even require congressional or presidential action," Purisima said.   — with Reuters/Keith Richard Mariano/ELR, GMA News