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In the Philippines, all politics and doing business is local

It’s the time of the year again when the World Bank releases the latest results of their Ease of Doing Business Survey that is conducted among 185 countries all over the world. The results of this survey are the ones often used by multi-national companies as a basis on whether they should invest in a particular country or not. We all know how important foreign investments are since these can often lead to a stronger economy for a particular country as well as additional job opportunities for its citizens. Unfortunately, our country didn’t fare too well in the 2013 edition of this survey, finishing 138th among 185 countries all over the world. The survey was done by measuring and ranking a country’s performance on several important aspects such as starting a business, getting credit, registering property, getting electricity, dealing with construction permits and paying taxes to mention a few. Our Asian neighbors — Singapore and Hong Kong — actually topped the survey while our other Southeast Asian neighbors such as Malaysia and Thailand also ended up in the top 20. Clearly, this does not augur well for our government’s current efforts to attract more businesses to set up here in our country. As we all know, more businesses mean more job opportunities that will eventually lead to the decrease of poverty rates in our country.
Looking closely at the reasons why our country continues to lag behind our Asian neighbors, we can see that the Philippines ranks 161st in terms of Starting a Business. The data provided by the World Bank states that it takes 16 steps to be able to open a business here and this would usually take a period of 36 days. Another revealing data is the ease by which business can get a construction permit wherein our country ranked in 100th place because it takes 84 days just to be able to secure a permit here. Finally, it takes almost 40 days here in our country just to be able to register your property and 842 days or almost three years just to be able to enforce contracts. It is no surprise that even local businessmen are also wary of opening more businesses in our country since these delays coupled by the graft and corruption happening in our different government agencies make the cost of doing business go higher than what is necessary and also create an uneven playing field.
Opening businesses, securing construction permits and even registering your property are all taken cared of by our local government units. Thus, the reforms that are needed to make our country competitive will need to come from the local level. Many of us tend to focus on our national candidates every time there is an election thus, we fail to scrutinize the kind of local candidates and leaders that we elect. How many of us actually know who our councilors are? Yet, these councilors that we elect are the ones that decide on zoning exemptions in our cities or municipalities that can cause much problems in a particular area. When a zoning exemption is given by the municipal or city council, a property developer can construct a building that is higher than what the original zoning regulation has stated. The effect of this zoning exemption can be disastrous for those living near the area since this can lead to higher traffic of vehicles, waste management problems and even water supply problems since there will now be a higher density of people living in a particular area. This is currently happening in many major cities all over Metro Manila where you have high-rise residential buildings being constructed left and right without proper consultation happening to the stakeholders living in the area. Insiders have said that for zoning exemptions to be granted in some cities, the property developer must shell out at least P 100,000.00 per councilor that goes to show that graft and corruption is still rampant in our local government units. This will amount to a few million pesos which is a small amount compared to the tens of millions that a property developer will be able to earn because he or she was able to secure a zoning exemption. If I were an honest to goodness businessman, I would have no choice than to just play into this game to be able to compete with other businesses or choose not to do business in that particular city or municipality anymore.
In the coming 2013 elections, we will be given another opportunity to select the right leaders for our country, let us make sure that we take time to know our local candidates just as we take time to know our national candidates. Let us remember that for our nation to be competitive with our other Asian neighbors, it is imperative that much needed reforms also happen in the local level where up until today, it continues to be business as usual even during this time of “Matuwid na Daan.”
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Harvey S. Keh is Director for Youth Leadership and Social Entrepreneurship at the Ateneo School of Government and is also the Lead Convenor of the Kaya Natin! Movement for Good Governance and Ethical Leadership.