Makati City, December 08, 2010

Financial & Private Sector DevelopmentMakati City, December 08, 2010

Janamitra Devan Vice President

Financial and Private Sector Development

The World Bank and International Finance Corporation

Tanya Lat Project Manager

AIM Policy Center

Financial & Private Sector Development

What does Doing Business measure?

Doing Business indicators:

Focus on regulations relevant to the life cycle of a small to medium-sized domestic business in the largest business city

Are built on standardized case scenarios

The objective: efficient regulations, accessible to all, and simple to implement

DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets.

2


1 Footnote goes here (add tab after number for proper alignment). 10 pt Arial regular. Source: Place here. 10 pt Arial regular.

Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

Start-up Expansion Operations Closing Starting a

business

Minimum capital requirement,

procedures, time and cost

Registering property

Procedures, time and cost

Getting credit

Credit information systems

Movable collateral laws

Protecting investors

Disclosure and liability in related party transactions

Enforcing contracts

Procedures, time and cost to resolve a commercial dispute

Dealing with construction permits


Paying taxes

Payments, time and Total Tax Rate

Trading across borders

Documents, time and cost

Getting electricity (annex I)


Employing workers (annex II)

Closing a business

Time, cost and recovery rate

Property rightsInvestor protectionAccess to credit

Entry Administrative burden Flexibility in hiring

Recovery rateReallocation of assets


Top 30 economies on the ease of Doing Business 2009/10

4

1. Singapore 16. Korea, Rep.

2. Hong Kong SAR, China 17. Estonia

3. New Zealand 18. Japan

4. United Kingdom 19. Thailand

5. United States 20. Mauritius

6. Denmark 21. Malaysia

7. Canada 22. Germany

8. Norway 23. Lithuania

9. Ireland 24. Latvia

10. Australia 25. Belgium

11. Saudi Arabia 26. France

12. Georgia 27. Switzerland

13. Finland 28. Bahrain

14. Sweden 29. Israel

15. Iceland 30. Netherlands

148. Philippines

https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html

https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html


61%

63%

59%

47%

67%

OECD high Income

Eastern Europe and Central Asia

Sub-Saharan Africa

Middle East and North Africa

Latin America and

Caribbean

South Asia

East Asia and Pacific

Economies in East Asia & the Pacific were among the most active in making it easier for local firms to do business in 2009/10

5

84%

75%

Percentage of countries with at least one positive improvement in 2009/10


Closer to an apples-to-apples comparison

Expands Doing Business beyond the largest business

city

Captures local differences in regulations or enforcement

Gives specific locations an opportunity to tell their story

and provides a tool for locations to compete globally

Provides information on good practices within the same

country that can be easily replicated

Why expand Doing Business to the subnational level?


Doing Business in the Philippines 2011 covers 25 cities

Doing Business in the Philippines 2011 updates 2008 data and expands the analysis to 25 cities. The study measures national and local regulations across the country in 3 areas of the life of a business:

1. starting a business

2. dealing with construction permits

3. registering property

Second in a series of reports undertaken in partnership with the Asian Institute of Management Policy Center

Data collected with the help of more than 500 private sector contributors and public sector officials

Luzon: Batangas City, Caloocan, Las Piñas, Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa, Navotas, Parañaque, Pasay, Pasig, Quezon City, San Juan, Taguig, Valenzuela

Visayas: Cebu City, Iloilo City, Lapu-Lapu, Mandaue

Mindanao: Cagayan de Oro, Davao City, General Santos, Zamboanga City


• 65% of cities benchmarked in 2008 and again in 2010 have improved in at least one area measured

• Computerization and multiple service providers make it easier to do business, lower transaction costs and increase transparency across the Philippines

• High number of procedures continues to be a challenge for entrepreneurs

• Wide variation in local business regulation across the country points to ample room for further business reforms

• National level business reforms needed for more results

• Cities can learn from the existing good practices of their peers and become more competitive nationally and globally

Key findings

Financial & Private Sector Development9

19 business reforms since 2008 made it easier to do business in the Philippines

City or departmental reforms Implementation of national reforms

Starting a business

Dealing with construction

permits


Starting a business

Dealing with construction

permits


Caloocan

Cebu City

Davao City

Las Piñas

Makati

Malabon

Mandaluyong

Mandaue

Manila

Marikina

Muntinlupa

Navotas

Parañaque

Pasay

Quezon City

San Juan

Taguig

Valenzuela


Manila made starting a business easier in 2009/10 thanks to local level reforms

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 160

10

20

30

40

50

60

Procedures

Tim

e (

da

ys

)

1 procedure cut

Time cut from 53 to 38 days

Manila introduced a one-stop shop for the municipal license and cut the inspection by the mayor’s office, reducing start-up time by 15 days


Easier business entry means more new firms: evidence from empirical research

MexicoImpact of the reduction of registration procedures through the introduction of One-Stop Shops and the elimination of federally required procedures

Increase in the number of new firms of about 6% Increase in employment by 2.6% Consumer Price Index decrease by 1% due to competitive pressures of new

entrants

ColombiaImpact of the introduction of One-Stop Shops in 6 cities:

Increase of 5.2% in the number of new firms

IndiaImpact of the elimination of License Raj in 16 states over 64 industries:

Increase in the number of new firms by 6%

Why business regulation reform matters


Too many requirements to start a business


Wide variation in time and cost to start a business


9 of 20 cities benchmarked in 2008 made it easierto start a business


Majority of permit requirements during pre- and post-construction phases


90% of construction permit cost relates to electricityconnection


Variation in time and cost to register property


6 of 20 cities benchmarked in 2008 made it easier to register property


Philippine cities have good practices…

IndicatorGlobal Rank

(183 economies)Days to deal with construction permits Zamboanga City (46 days) 5Days to register property Mandaluyong (22 days) 49Cost to register property Mandaue (3.35% of property value) 64Cost to deal with construction permits Davao City (94.24% of income per capita) 67


…but there is room for improvement

IndicatorGlobal Rank Range (183 economies)

Number of procedures to register property 8-9 procedures 137-159Number of procedures to deal with construction permits

25-36 procedures 155-178Number of procedures to start a business 15-22 procedures 175-183


Thank youwww.doingbusiness.org/philippines


Annex slides


Davao, General Santos and Valenzuela each leads one area measured by Doing Business

Makati City, December 08, 2010

Documents

Transcript of Makati City, December 08, 2010