WB: PH lags in solving commercial disputes

Credit to Author: JORDEENE B. LAGARE| Date: Fri, 25 Oct 2019 19:43:36 +0000

THE Philippines is lagging behind its counterparts in East Asia and the Pacific when it comes to resolving commercial disputes in the region, according to the World Bank (WB).

The multilateral lender made the observation after the country’s ranking significantly improved in its latest ease of doing business report.

In a video conference on Friday, World Bank Operations Analyst Maksym Iavorskyi said the Philippines takes around 962 days to resolve commercial disputes, compared with the 580 days of the above-mentioned regions.

“The biggest room for improvement for the Philippines is, specifically, we see time is quite high that businesses spend to go to the court procedure to resolve commercial disputes… This is an area where the Philippines can improve on,” Iavorskyi told reporters.

“The implementation of electronic courts can help improve enforcing contracts indicator…for example, to file complaints electronically to courts. This is an area specifically where the Philippines can move into because apparently on the court automation index…the Philippines has a score of zero,” he added.

Generally speaking, the World Bank observed that having a one-stop shop will help entrepreneurs in putting up their own businesses since it only involves dealing with only one authority.

“They may have to go to one authority, register with main authority, then to tax authority then another procedure. Sometimes, the cost in registering a business can be cumbersome. There are different barriers that entrepreneurs can face when it comes to starting a business,” World Bank Senior Economist and Statistician Arvind Jain mentioned.

The 2020 Doing Business report released on Thursday showed that the country’s ease of doing business score was 62.8 (with zero as the lowest and 100 the highest). The World Bank rated 190 economies.

The 10 areas gauged in the report are 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.

Across all indicators, the country obtained its highest ranking in getting electricity (32nd), getting insolvency (65th), protecting minority investors (72nd), dealing with construction permits (85th) and paying taxes (95th).

The Philippines, however, ranked low in other indicators such as trading across borders (113th), registering property (120th) and enforcing contracts (152nd).

For this year, the country’s worst ranking was in starting a business (171st), down from last year’s 166th place.

But the international financial institution mentioned that the country was one of the 42 economies that improved the most across three or more doing business topics.

When asked if the country can retain its momentum in terms of ease of doing business, Jain said “it remains to be seen.”

“I think we’ve definitely seen some encouraging activities in the latest cycle…but we’ll find our a year from now whether there will be any improvements,” Jain told reporters.

Earlier, Trade Secretary Ramon Lopez said the Philippines was one of the top three “high jumpers” among the 190 economies covered by the World Bank report.

“In terms of [improvement in ranking] the Philippines was the 3rd highest, next only to Togo (+40) and Saudi Arabia (+30). We shared the same spot with Jordan, which also increased by +29 notches,” Lopez said in a statement on Thursday.

According to the Trade chief, the last time the Philippines ranked 95th — the highest spot held by the country so far — was in 2014. “This cycle’s increase is the highest recorded annual improvement of the country since 2010.”

“In pursuing ease of doing business, the Department of Trade and Industry adopted the formula of a whole-of-government approach combined with public-private sector partnership. This formula involves the judiciary, legislative and executive branches working with the private sector towards the deliberate and methodical execution of a sound and clear competitiveness strategy,” he added.

President Rodrigo Duterte signed Republic Act 11032, or the “Ease of Doing Business Act,” requiring government agencies to act on applications within three days for simple transactions, seven days for complex ones and 20 days for those which are classified as highly technical.

The road to 95 was much challenging like Mount Everest. “Much like a climb to Mount Everest, we need to prepare for the next base camp. The target in the PDP for 2020 is top 40%, which would be around rank 76,” Lopez said.

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