Press Release
April 27, 2009

ANGARA EYES BIGGER ROLE FOR LGUs IN SECURING INVESTMENTS
Seeks to dissolve a highly centralized and heavily layered bureaucracy

Sen. Edgardo J. Angara today said that the country needs to improve its business environment in the face of the Global Economic Crisis which is wrenching its havoc on RP's job creation and investment generation efforts.

"Recently, American business leaders in the Asia Pacific called on the US to bolster trade and investment links with the region. With the industrialized West suffering the blow of the financial crisis, business experts and policymakers are now looking at Asia to become the new powerhouse," said Angara who chairs the Senate Committee on Finance.

He added, "The Philippines, however, has to overcome a major obstacle to investment and job creation: in Asia, it falls behind in terms of ease of doing business. A World Bank and International Finance Corp. (IFC) report put the Philippines at 140th out of 181 countries in a study on the ease of doing business. Our country, one of the lowest-ranked in the region, was behind Cambodia at 135 and only ahead of Laos at 165 and East Timor at 170. The average ranking for East Asia is 83."

Angara cited IFC's report, entitled Doing Business 2009, which takes into account the laws, rules and regulations that enhance or impede business activities based on 10 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.

Singapore earned top rank, making it the easiest place in the world to do business. Hong Kong ranked fourth, Thailand 13th and Malaysia 20th. The study found that it only takes four days to start a business in Singapore, while in the Philippines it takes 52 days. Starting a business takes an average of 18 procedures, 11 of which are required nationally and seven by local governments.

Angara emphasized that both national and local governments are responsible for creating a positive business environment and facilitating the entry of investments. In addition to cutting the time it takes to set up a business, it is important to provide the necessary infrastructure and human capital development. Countries with a poor state of infrastructure have to deal with the high cost of doing business, which results in low investment and high unemployment.

"We need to give our local governments a bigger role at securing investments. As it is, ours is a highly centralized and heavily layered bureaucracy. Autonomy means giving local governments a chance to create their own sources of revenue. It ensures freedom for them to utilize their region's strengths. By doing so, we encourage economic growth, fuel business development and create employment opportunities," added Angara.

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