THE cost of doing business is causing the Philippines to lag in regional competitiveness, the Management Association of the Philippines (MAP) said on Thursday.
Mary Jade Roxas-Divinagracia, MAP Ease of Doing Business Committee vice chairperson, told BusinessWorld Live on One News Channel that the decline in competitiveness comes despite the passage of measures in the previous administration seeking to attract more investors.
She said some of the measures include Republic 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which lowered the corporate income tax, and amendments to the Public Service Act, the Retail Trade Liberalization Act, and the Foreign Investment Act.
“We are still losing competitiveness in ASEAN, because we are facing a lot of challenges (such as) the high cost of doing business, high power cost,” Ms. Roxas-Divinagracia adding that issues with human capital are also a factor, like availability of talent, the workforce’s aptitude for innovation, critical thinking, and business and digital skills.
Ms. Roxas-Divinagracia also cited the need to improve infrastructure and connectivity.
“It used to be that having a pool of young English-speaking workers was enough. But not anymore because our neighbors are also leveling up when it comes to that. We need to address the other areas where we are falling behind,” Ms. Roxas-Divinagracia said.
“We also need to improve our quality of infrastructure and logistical services, including connectivity and digital infrastructure. We also need to invest more on research and development, transparency, respect for sanctity of contracts, and overall ease of doing business,” she added.
Ms. Roxas-Divinagracia said business executives are concerned about corruption, citing the PwC Philippines-MAP 2022 CEO survey. The study found that 67% of business executives cited corruption as a factor that may delay the economic recovery.
“The problem of corruption has been there for so long. Unfortunately, we’ve not made significant progress… This is a very valid concern that chief executive officers are facing as corruption scares away investors,” she said.
“(Corruption) can complicate doing business in the country. It can lead to unfair competition, delay some of the business processes. It will increase costs. Overall, it can hurt business viability. Whether corruption is perceived or real, it is making the country unattractive to investors both foreign and domestic,” she added. — Revin Mikhael D. Ochave