What will improve business climate in the Philippines?
- economy, setting up your business -
The World Bank believes it has the answers. The Philippine Daily Inquirer’s banner story today shows a list of measures the International Finance Corp., the private sector development arm of the World Bank, is urging the government to adopt.
Do you agree with the IFC? It says the Philippines is weak especially in the areas of starting a business, property registration and ability to access credit.
In a nutshell, IFC suggests that the government should:
The proposal on the credit information bureau is particularly interesting because at the moment, lenders are keeping their own counsel on who is creditworthy or not. Why would they share that kind of information with their peers, no matter what they say publicly about “working together for the good of the industry.” The absence of a good database on potential borrowers makes it easier or bad borrowers to get a loan and raises banks’ past due loans.
Who is the end loser here? The banks to a certain extent because their image gets hurt, but more so good borrowers who get higher interest rates and a longer time to process loans because of more documentary requirements and credit history checking. At least, that’s how bankers explain the situation.
Unfortunately, getting that reform done will depend on Congress, where the road to an important bill can twist and turn like a supertyphoon dancing with another supertyphoon.
