An arduous journey for improving ease of doing business in the Philippines
SINCE my arrival in this country in late June, I have witnessed the increasing number of visitors and queries about the business environment in the Philippines. This is attributable to two milestone developments: the opening of the Korea Visa Application Center in August and the signing of the Korea-Philippines Free Trade Agreement (FTA) in September. Readers may think that most of the visa applicants are those who love K-pop and Korean drama. To my pleasant surprise, however, a sizeable number of them are also business-related, including those promoting business opportunities in the Philippines. Under the circumstances, the signing of the FTA is expected to provide an additional impetus to trade and investment between Korea and the Philippines.
The surge in queries and visits related to business begs the question: How is the ease of doing business in the Philippines perceived? Ease of doing business is an intricate amalgamation of various elements such as infrastructure, tax structures, and regulatory frameworks. What makes this complex matrix more complicated is that it is always compared to other countries, and it affects the overall perception and image of a country’s business environment. Often, perception trumps reality, and perception, once established, is extremely hard to change. As old habits die hard, perception, especially a negative one, lasts a long time.
I recall my conversation with a Filipino senator who confessed that doing business in this country is very difficult. If this is the observation from an influential politician, one could easily fathom the challenges faced by foreign businesses. In this regard, the OECD survey released in 2020 on FDI RRI (foreign direct investment regulatory restrictiveness index) is alarming. The Philippines is ranked as the third most restrictive among 84 countries, topped only by Palestine and Libya.