The recommendation came following the release of its survey results on “Doing Business 2009″ indicating Philippine overall ranking in terms of ease in conducting business dipping by four notches to 140 out of 181 countries from last year’s 136.

The country’s ranking, however, actually moved down by one notch with the addition of three countries in the survey –Bahamas, Qatar and Bahrain.

“We should make these reforms happen –and soon,” IFC Resident Representative Jesse Ang noted, referring to reforms underway including establishing a Web-based registry system, a credit information system to reduce lending risks and implementing the anti-red tape law to ensure speed and transparency in government transactions with the public.

WB Country Director Bert Hofman explained that less cumbersome regulations bring small microenterprises into formal sector and enables increased access to finance for their expansion.

“Research indicates that countries with burdensome regulations tend to have a larger informal sector, higher unemployment, and slower rates of new business formation,” he noted.

For his part, National Competitiveness Council private sector co-chair Cesar B. Bautista expressed confidence their initiatives undertaken to improve local business environment can increase the country’s ranking next year.

The number of days for business was further reduced from 58 to 52 days to 39 days, Trade Undersecretary Zenaida Maglaya noted.

Aside from this measure, Maglaya said 15 National Economic, Research and Business Assistance Center (NERBAC) have been launched throughout the regions.

She said those in Cebu, Davao and Pampanga are fully operational focusing on knowledge management, investment promotion and business licensing, while most newly launched NERBACs are handling business licensing activities.

Likewise, the Board of Investments (BOI) expanded its One Stop Action Center into an Investments Servicing Group to provide the crucial, expanded and upgraded services to a broad range of investors with one department acting as the NERBAC-National complementing the NERBAC regional centers, she added.

Maglaya said the completion of Philippine Business Registry connectivity requirements for Security and Exchange Commission, Social Security System, Taguig, Navotas, San Fernando City of Pampanga and Gen. Santos City is ongoing.

This year’s IFC Doing Business survey measures the following indicators: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

The Philippines scored the lowest in starting and closing a business at 155 and 151, respectively.

It rated the highest in terms of trading across borders that examined the number of documents, number of days and cost to export and import.

For the third year in a row, Singapore ranked first in the overall ranking in terms of ease in doing business, followed by the New Zealand and United States.

Source: Adelaida Bulaon

Finance Undersecretary Jeremias Paul Jr. said the department agreed with Socioeconomic Planning Secretary Ralph Recto to cut the subsidies given to the NFA so the government could expand its cash transfer program.

“It’s a good idea. Let the poor get the subsidy,” he said yesterday on the sidelines of a Senate hearing on the proposed P1.415 trillion budget for 2009.

He said that next year, the NFA will lower its rice importation volume and there will be a shift to “domestic production.”

The government, Paul added, would be better off not intervening in the market. “So we’re inclined to do targeted subsidies,” he said.

As such, he said, the government will increase the subsidies given to other sectors.

“It’s up to them where they want to use the money, whether for rice or other food,” he said.

Earlier, Recto said the government should go slow in giving huge subsidies to NFA. He said it would be more beneficial to increase the subsidies given to other sectors such as the unemployed, the senior citizens and to the educational sector.

The interagency Fiscal Incentives Review Board (FIRB) had approved an increase in the Tax Expenditure Fund (TEF) of the NFA.

The so-called TEF is a subsidy released by the Department of Budget and Management (DBM) to government-owned and controlled-corporations and state-run companies mainly to settle customs duties and other taxes arising from the importation of goods.

The government has programmed a TEF for the grains agency of only P7.5 billion for 2008 but NFA expects its TEF needs to increase to as much as P32 billion or more than four times the programmed amount.

The subsidy enables NFA to continue with its operations and fulfill its mandate of selling rice at a cheaper price than the prevailing market rates. It also helps the grains agency to have more funds for its import requirements.

Providing tax subsidy to the NFA is the more favored mitigating measure instead of reducing the tariffs on rice.

Last year, the NFA incurred a deficit of P2.6 billion due to its mandate to sell rice below market prices.

The government has also allocated P2 billion for power subsidies for roughly P4 million small electricity consumers.

Source: Iris C. Gonzales