Philippines 4th in the World's Worst Countries for Business

Doing Business in the Philippines

Though this is not new to most Filipinos, the report of the World Bank should serve as a wake up call for the government to look into the existing laws and regulations of government agencies and local government units (LGU's). This might be one of the major factor why many foreign investors shun doing business in the Philippines despite the effort of the Aquino government.

The World Bank's "Ease of Doing Business" study includes 183 countries. In the CNBC report, they come up with the 10 Most Worst countries for doing business. The countries were ranked based on a lot of factors such as ease of starting a business, paying taxes, getting construction permits, investor protection laws, and other factors.

The world's worst countries to do business with also included some economic superpowers. Below are the ranking from the countries included in the top 10.

1. Venezuela
2. Ukraine
3. Algeria
4. Philippines
5. Nigeria
6. India
7. Indonesia
8. Brazil
9. Russia
10. Argentina



Reasons why the Philippines is included in the Top 10 of the World's Worst Countries to do Business and why we are on the top in the south East Asia. Qoutes from the CNBC report.

Philippines

2010 GDP: $199.6 billion
2010 FDI: $1.7 billion

The Philippines is the lowest ranked Asian country on the list of the most difficult places to do business in. It attracted just 2.5 percent of the $76.5 billion of foreign direct investment that flowed to the 10 members of the Association of South East Asian Nations (ASEAN) in 2010.

Despite having massive untapped mineral wealth, a key geographical location between Southeast and North Asia and a large, growing English-speaking population, the country has fallen behind its neighbors in economic growth.

Foreign businesses are wary of the Philippine's unstable legal system, violence, and bureaucracy. Its ease of doing business ranking from the World Bank fell a further two spots this year from 2010. The country also ranks among the lowest when it comes to starting a business, and resolving insolvency, with the latter taking more than five and half years, compared with an average one year and seven months in OECD countries.

Last month, Philippine President Benigno Aquino made trips to the U.S., China, and Japan to push for investments, as well as to send a message that things are changing in the country, after two previous administrations were dogged by corruption allegations. Aquino's trip to China resulted in $7 billion to $9 billion of potential investments.

The Philippines also jumped 10 places to 75th in the World Economic Forum's global competitiveness index this year.

Philippine lawmakers should take action on this. They could help, by proposing new legislations that would help new investors, filipinos or foreign businessmen. Instead of proposing laws that would change the names of public places, such as naming EDSA to former President Corazon Aquino, or congressional investigations that are only used for personal gains, look at the deeper problems of the Philippine economy.

The government's effort to go after corrupt officials is just the tip of the iceberg. There are still so many things that they must do to improve the business climate in the Philippines.