Janamitra Devan
Vice President
Financial and Private Sector
Development
The World Bank and International
Finance Corporation
Tanya Lat
Makati City, December 08, 2010
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
Financial & Private Sector Development
Doing Business indicators – 11 areas of business
regulation (9 included in the ranking)
Start-up
 Starting a
business
Minimum capital
requirement,
procedures, time
and cost
Expansion
 Registering property
Procedures, time and
cost
 Getting credit
Credit information
systems
Movable collateral laws
Operations
 Dealing with
Closing
 Closing a
construction permits
Procedures, time and
cost
business
Time, cost and
recovery rate
 Paying taxes
Payments, time and
Total Tax Rate
 Protecting investors
 Trading across
Disclosure and liability in
related party
transactions
Documents, time and
cost
borders
 Enforcing contracts
 Getting electricity
Procedures, time and
cost to resolve a
commercial dispute
Procedures, time and
cost
(annex I)
 Employing workers
(annex II)
Property rights
Administrative burden
Investor
protection
 1 Entry
Footnote goes here (add
tab after
number for proper alignment). 10 pt Arial regular.
Flexibility in hiring
 Source: Place here. 10 pt Arial regular.
Access to credit
Recovery rate
Reallocation of
assets
Financial & Private Sector Development
Top 30 economies on the ease of Doing Business
2009/10
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
4
Financial & Private Sector Development
Economies in East Asia & the Pacific were among the most
active in making it easier for local firms to do business in
2009/10
84%
OECD high
Income
Eastern
Europe and
Central Asia
67%
61%
75%
63%
Middle East and
North Africa
47%
Latin
America and
Caribbean
South Asia
East Asia and
Pacific
59%
Sub-Saharan
Africa
Percentage of countries with at least one positive improvement in 2009/10
5
Financial & Private Sector Development
Why expand Doing Business to the subnational level?
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
Financial & Private Sector Development
Doing Business in the Philippines 2011 covers 25 cities
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
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
Financial & Private Sector Development
Key findings
• 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
Financial & Private Sector Development
19 business reforms since 2008
made it easier to do business in the Philippines
City or departmental reforms
Starting a
Dealing with
Registering
business
construction
property
permits
Caloocan

Cebu City

Davao City

Implementation of national reforms
Starting a
Dealing with
Registering
business
construction
property
permits





Las Piñas
Makati
Malabon
Mandaluyong


Mandaue
Manila


Marikina
Muntinlupa
Navotas

Parañaque

Pasay

Quezon City

San Juan


Taguig
Valenzuela


9
Financial & Private Sector Development
Manila made starting a business easier in 2009/10
thanks to local level reforms
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
60
Time (days)
50
Time cut from
53 to 38 days
40
30
20
1 procedure cut
10
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Procedures
Financial & Private Sector Development
Why business regulation reform matters
Easier business entry means more new firms: evidence from empirical
research
Mexico
Impact 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
Colombia
Impact of the introduction of One-Stop Shops in 6 cities:
 Increase of 5.2% in the number of new firms
India
Impact of the elimination of License Raj in 16 states over 64 industries:
 Increase in the number of new firms by 6%
Financial & Private Sector Development
Too many requirements to start a business
12
Financial & Private Sector Development
Wide variation in time and cost to start a business
13
Financial & Private Sector Development
9 of 20 cities benchmarked in 2008 made it easier
to start a business
Financial & Private Sector Development
Majority of permit requirements during pre- and
post-construction phases
Financial & Private Sector Development
90% of construction permit cost relates to electricity
connection
16
Financial & Private Sector Development
Variation in time and cost to register property
Financial & Private Sector Development
6 of 20 cities benchmarked in 2008 made it easier
to register property
18
Financial & Private Sector Development
Philippine cities have good practices…
Indicator
Days to deal with construction permits
Zamboanga City (46 days)
Global Rank
(183 economies)
5
Days to register property
Mandaluyong (22 days)
49
Cost to register property
Mandaue (3.35% of property value)
64
Cost to deal with construction permits
Davao City (94.24% of income per capita)
67
Financial & Private Sector Development
…but there is room for improvement
Global Rank Range
(183 economies)
Indicator
Number of procedures to register property
8-9 procedures
Number of procedures to deal with construction
permits
25-36 procedures
Number of procedures to start a business
137-159
15-22 procedures
175-183
155-178
Financial & Private Sector Development
Thank you
www.doingbusiness.org/philippines
21
Financial & Private Sector Development
Annex slides
Financial & Private Sector Development
Davao, General Santos and Valenzuela each leads
one area measured by Doing Business
Financial & Private Sector Development