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EODB 2021

Doing Business 2021

As per Rule XI Section 4 (b) of the Implementing Rules and Regulations of R.A. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the Anti-Red Tape Authority is mandated to implement various ease of doing business and anti-red tape reform initiatives aimed at improving the ranking of the Philippines, among other functions.

To this end, ARTA has taken over the function of the former National Competitiveness Council and the Department of Trade and Industry –Competitiveness Bureau of monitoring our country's competitiveness ranking in the World Bank's Doing Business (DB) Report for the 2021 cycle.

The Doing Business Report, also known as the DB Report, is an annual publication of the World Bank Group which measures aspects of business regulations across 190 economies and selected cities at the subnational and regional level. It looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.

The DB Report covers 12 areas of business regulation. Ten of these areas are included in the ease of doing business score and ease of doing business ranking: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

Doing Business also measures regulation on employing workers and contracting with the government, which are not included in the ease of doing business score and ranking.

DB INDICATOR WHAT IS BEING MEASURED
Starting a business Procedures, time, cost, and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time,, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency
Employing workers Flexibility in employment regulation and redundancy cost

The DB Report measures aspects of business regulation affecting small domestic firms located in the largest business city of the economies included in the study. The Philippines’ DB Profile was determined from data gathered by the World Bank Group in Quezon City.

For the 2020 DB Report, the Philippines ranked 95th out of the 190 economies with a score of 62.8. With this, the country has posted one of the highest jumps in the ease of doing business (EODB) scores with its 29-notch improvement from the 2019 report.

Among the divisions of ARTA is the Doing Business Division which is under the Better Regulations Office and is tasked to perform the following functions:

  • 1. Track and monitor the Philippine performance in World Bank’s Doing Business (DB) Report and other global competitiveness indices;
  • 2. Identify and coordinate with concerned agencies reform targets aimed at improving the Philippine competitiveness rankings and score;
  • 3. Supervise, monitor, and assess the planning and implementation of reform initiatives geared towards the streamlining of regulatory procedures and simplifying the requirements for business related transactions; and to
  • 4. Recommend and develop policy reforms and strategic projects intended for the long-term competitiveness of the Philippines.

Discussed below are the Doing Business activities, programs, and projects of the Anti-Red Tape Authority led by its Doing Business Division.

Creation of Doing Business Committees
Doing Business Committees, composed of public and private sector members, were organized to initiate, develop, implement, and monitor reform initiatives in the business regulatory environment. These committees were formed to support in improving the public sector performance and in enhancing delivery of frontline services in relation to the DB Report.

The Doing Business Committees are comprised of 10 sub-committees representing the 10 indicators. Each work team is composed of representatives from the different national government agencies involved in each process, private sector advisors, and LGU officers.

Upon taking over the DB function from DTI, ARTA now organizes and heads the meetings of the DB committees.

Competitiveness Research and Benchmarking
The Competitiveness Research is necessary to gather baseline information on the eleven indicators covered in the DB report. This procedure identifies those activities needed in the analysis of the doing business indicators from understanding the methodology, gathering the historical data, getting the best practices in the world and in the ASEAN, and identifying and comparing the most applicable practices in the Philippines.

Conduct of Public and Private Sector Dialogues
Public and private sector dialogues feature the most relevant topics impacting the competitiveness of the Philippines. This exercise gathers key decision-makers and reform advocates from the public sector, the private sector, the academe, and the media to discuss the reforms, key items, and most controversial action plans that will further the interests of concerned stakeholders. Apart from discussions, the main objectives of the dialogue are to educate the audience, engage them in discussions, and encourage them to act on the recommendations presented.

Conduct of Doing Business Summit
ARTA organizes Doing Business events to update the public on the reforms developed by the DB Committee to improve the overall ease of doing business of the country. It is also meant to present the commitments of the DB Sub-Committees to implement the reform targets.

ARTA had conducted an Ease of Doing Business Summit on December 18, 2020 and an Ease of Doing Business Forum on February 24, 2020.

On the Ease of Doing Business Summit, DTI Secretary Ramon Lopez and ARTA Director General Jeremiah Belgica had a ceremonial turnover of the task of overseeing the Philippines’ DB ranking.

Development of the Doing Business Competitiveness Strategy
ARTA develops a Doing Business Competitiveness Strategy, outlining the reform initiatives and reform targets needed to be implemented by national government agencies with the purpose of improving the performance of the country in the Doing Business Report. These initiatives include streamlining of processes for an overall reduction in the required steps, documents, turnaround time, and transaction costs for the business community and stakeholders.

The DB Competitivenes Strategy also features the impact assessment of the reforms per indicator and to the overall rankings and score.