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Sub-National Doing Business in the Philippines 2011

Asian Urban Forum, November 15, 2011 Lai-Lynn A. B. Barcenas AIM Policy Center

Outline of Presentation

What does Doing Business measure? Why expand the Doing Business to the subnational level? What are the key findings of the study? How easy is it to get the necessary permits to start a business, construct a warehouse, and transfer land title? What are the global good practices in the Philippines?

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.

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 country that can be easily replicated Provides information on good practices within the same

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

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

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

City or departmental reforms Starting a business Caloocan Dealing with construction permits Registering property Implementation of national reforms Starting a business Dealing with construction permits Registering property

Cebu City Las Pias Makati Malabon

Davao City

Mandaluyong Mandaue Manila Marikina Navotas Pasay

Muntinlupa Paraaque Quezon City San Juan Taguig


Too many requirements to start a business

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

Variation in time and cost to register property

Philippine cities have good practices

Indicator Days to deal with construction permits Zamboanga City (46 days) Days to register property Mandaluyong (22 days) Cost to register property Mandaue (3.35% of property value) Cost to deal with construction permits Davao City (94.24% of income per capita)

Global Rank (183 economies) 5 49 64 67

but there is room for improvement

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 15-22 procedures

Global Rank Range (183 economies) 137-159

155-178 175-183

Thank you

The project was funded by the International Finance Corporation of the World Bank Group, Australian Agency for International Development (AusAid), Canadian International Development Agency (CIDA), and United States Agency for International Development (USAID) through their Local Implementation of National Competitiveness for Economic Growth Program (LINC-EG).