MANILA, Philippines - Focusing on taxes and investor protection, as well as forming a specialized agency that will deal with concerns in doing business. These are among the recommendations made by the Philippine Institute for Development Studies (PIDS) to Asia Pacific Economic Cooperation (APEC) members to improve the region’s business environment and ranking in the World Bank Doing Business report.
The government think tank released a policy note, commissioned by the Department of Foreign Affairs, to provide an analysis of priorities that will be used by the Philippines to push for as APEC host economy this year.
In the Policy Notes authored by PIDS consultants Ronald U. Mendoza, Tristan A. Canare and Alvin P. Ang, APEC is urged to expand the current areas or indicators monitored for its member economies.
Currently, APEC members are focused on starting a business, dealing with permits, getting credit, trading across borders, and enforcing contracts.
"While these areas are crucial in making doing business easier, additional focus on other criteria could also yield strong outcomes, particularly those focused on paying taxes and protecting investors,” the policy note read.
"Moreover, empirical and theoretical literature suggest that expanding priority areas have far reaching positive effects to economic growth and development,” it added.
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Based on WB’s 2015 Doing Business report, 15 of the 21 APEC members dropped in ranking in protecting investors from 2010 to 2015, and eight for paying taxes.
APEC as a region has been performing well in the Ease of Doing Business report, but are varied individually.
In the latest rankings, Singapore remains on top since 2007, followed by New Zealand and Hong Kong. Other APEC members that made it to the top 10 are South Korea (5th), United States (7th), and Australia (10th).
Papua New Guinea was the lowest-ranked APEC country at 133rd, followed by Indonesia (114th), and Brunei Darussalam (101st).
Lower-ranked members are advised to establish an agency that will handle doing business improvement concerns, similar to the Philippines’ National Competitiveness Council (NCC), the PIDS said in the policy note.
Originally called Public-Private Sector Task Force on Philippine Competitiveness, the NCC was created through Presidential Executive Order No. 571 in 2006 to promote and develop national competitiveness.
The Philippines ranked 95th in the latest WB report, jumping 13 places from the 2014 ranking and a climbing 38 notches from 2013.
"There are important coordination and governance challenges to be overcome in advancing these reforms notably in countries with a high degree of government decentralization,” the policy note said.
The PIDS said the proposed specialized agency would have representatives from the government, the private sector, the academe, and other stakeholders.
It would also be tasked to coordinate with policymakers, government agencies, and businesses, and will also propose and study policy reforms.
Among that reforms lower-ranked economies could start with are those that are easiest to accomplish, like changes that do not require amending laws.
"The APEC may also want to give attention to commonly implemented reforms that are not yet implemented in many of its members,” the policy note added.
The PIDS also recommended that better-performing economies could provide support through knowledge transfer to lower-ranked ones within and outside the APEC Summit.
"This may include: 1) allowing a representative from a better-performing country to observe the processes being implemented by the lower-ranked ones, and recommend process improvements; 2) sharing of technology on automation of submission and processing of documents; and 3) conducting a series of workshops...,” the policy note said.
