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Country Snapshot - Philippines  

HighlightsRankingsQuantitative DataLegislationAnalytical WorkProject Portfolio
  • East Asia & Pacific
  • Lower middle income
  • 93,616,853 (2011)
  • 2,050
Philippines Flag
Below are select highlights for the data included in the profile.

  1. The Philippines’ overall Doing Business 2011 ranking has declined this year, reflecting lower scores for three indicators. The most drastic decrease occurred in the Starting a Business Indicator, where the country dropped 32 spots. Indeed, The Philippines made construction permitting more cumbersome through updated electricity connection costs. However, this decline was offset by an increase in the Starting a Business, Paying Taxes and Trading across Borders Indicators.
  2. According to the latest Enterprise Surveys (2009), the top 3 constraints to firm investment in the Philippines include Practices of the Informal Sector, Access to Finance and Tax Rates. Among the firms surveyed, only 33.18% of them reported having a line of credit or loans from financial institutions, compared to 40.40% regionally and 34.88% of all countries surveyed. Of the firms surveyed, 37.52% reported competing with unregistered or informal firms, compared with 50.12% for the region and 55.49% for all countries.
  3. Among the 87 countries covered by the Investing Across Sectors indicators, the Philippines imposes foreign equity ownership restrictions on more sectors than most other countries. The country imposes ownership limitations on many industries, in particular on the primary and service sectors. Foreign capital participation in the mining and oil and gas industries, for example, is limited to a maximum share of 40% by the Philippine Constitution. Foreign ownership in those sectors, however, may be allowed up to 100% if the investor enters into a financial or technical assistance agreement (FTAA) with the government.
  4. T he Philippines’ economic freedom score is 56.2, making its economy the 115th freest in the 2011 Index. Its score is 0.2 point lower than last year, with small reductions in business and labor freedom offsetting modest gains in monetary freedom and freedom from corruption. The Philippines ranks 21st out of 41 countries in the Asia–Pacific region, and its overall score are slightly below the world and regional averages. Despite the challenging global economic environment, the Philippines has made a notable recovery since mid-2009, driven mainly by strong export performance. The absence of entrepreneurial dynamism, however, still makes long-term economic development a difficult task.

Subnational Doing Business Report

Doing Business in the Philippines 2011—the second subnational report in the series following Doing Business in the Philippines 2008—compares the regulatory environment for business in 25 cities in the Philippines. The report focuses on national and local regulations that affect 3 stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, and registering property.

Main Findings

  • Over the past two years, 13 out of 20 cities in the Philippines carried out 19 regulatory reforms to make it easier to start and operate a business.
  • Starting a business is easiest in General Santos, where it takes 22 days and costs 15.3% of income per capita to comply with the 17 requirements. It is more difficult in San Juan, where it requires 21 procedures that take 39 days and cost 26.3%.
  • Dealing with construction permits is easiest in Davao City, where it takes 57 days, but more cumbersome in Manila, where it takes 169 days. Local requirements remain responsible for the variation in the number of steps required to build a warehouse.
  • It is easiest to register property in Valenzuela and Navotas and more difficult in Cagayan de Oro and General Santos—differences are mainly driven by the performance of national government agencies.
  • Each of the 25 cities benchmarked in the report could learn from each other’s best practices.

The project was done in collaboration with the Asian Institute of Management Policy Center. 

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