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Quality power supply to sustain ease of doing business in PHL

Posted on October 31, 2014

By Kris M. Crismundo

MANILA, Oct. 31 (PNA) — As the Philippines surged 53 notches in the Ease of Doing Business report of the World Bank (WB) and International Finance Corporation (IFC) from 2011 to 2015, both public and private sectors are increasing their efforts to achieve its goal of getting in the upper third in the world ranking.

National Competitiveness Council (NCC) Co-Chair for Private Sector Guillermo M. Luz told the Philippines News Agency that quality of power supply in the country is very crucial, not only in attaining upgrades in the Doing Business report ranking but basically for business operations.

“Quality of power supply is important. We should have, of course, pay attention to it regardless it would affect our ranking or not because it could affect us in business,” Luz said.

The Doing Business report measures regulations in the local economy through 10 indicators affecting the cycle of a business that include: 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.

Aside from global rankings, the WB and IFC report now focuses in the “distance to frontier” which is determined by scores. The closer the score to a perfect point of 100, the better a country’s performance in easing doing business.

In a video conference with Southeast Asian nations, Washington D.C.-based WB Group Global Indicators Group Director Augusto Lopez Carlos announced that the Doing Business report has expanded its measure; now, looking into quality of regulatory environment which will include reliability of power supply in an economy.

The concern is: can the Philippines sustain its upgrades in the Doing Business report with the newly introduced methodology and the looming power situation in the country?

“I hope (the new measure will) not (affect our increase ranking), he added.

“Definitely the private and public sectors take steps to make sure that we have the proper power supply next year,” Luz said.

Meanwhile, in a hearing at the House of Representatives early this month, Department of Energy (DOE) Assistant Director Irma Exconde mentioned that the projected power supply shortage for two weeks in April 2015 is at 31 megawatts (MW).

But the DOE official noted that the country should also have power reserves ideally at 647 MW.

Hence, projected power shortage in summer next year is 678 MW.

DOE Secretary Carlos Jericho Petilla in previous interviews said the projected power shortfall next year is mainly due to scheduled maintenance of various power plants.

Although the country received investments in new power plants, these investments in the energy sector will not yet operate by 2015.

Moreover, aside from looking into reliable power supply, the Philippines also need to focus on indicators such as starting a business, getting credit, and protecting minority investors, according to Luz.

“Starting a business is number one on my list to move on (the ranking). We have the most number in ASEAN for corporations; not the longest but the most number,” Luz mentioned.

The Philippines has 16 procedures for an enterprise to register its business name just to start a business.

This is the longest procedure among 10 ASEAN members; Singapore and Malaysia only have three steps in starting a business; Thailand has four steps; Laos has six steps; Vietnam and Indonesia have 10 steps; Cambodia and Myanmar have 11 steps; and Brunei Darussalam has 15 steps.

“We would continue to argue and we will take a very close look in credit information and protection of minority investors portions. They put in new criteria in each side and we look at it,” Luz added.

According to Lopez Carlos, the WB and IFC inserted three new measures in this year’s report and another five measures next year particularly in areas of resolving insolvency, protecting minority investors, and getting credit.

In the Ease of Doing Business Report 2015, the Philippines ranked 95th among 189 economies, 13 notches better that the 2014 ranking of 108th place. The 2013 report placed the Philippines at 138th; in 2012 at 136th; and 2011 at 148th. (PNA)

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