Palace blames LGUs for poor WB ranking

By Riza Recio

09/12/2008

Malacañang blamed local government officials for the slip in the country’s ranking as a place to invest, saying yesterday it would impose stiff sanctions against local government officials who would be found mulcting new business projects.

A World Bank (WB) study on the most favorable countries for business released the other day showed the Philippines’ already disappointing ranking of 133rd of 181 countries last year further slipping to 140th this year.

Trade and Industry Secretary Peter Favila told reporters the Local Governments Code needed revisions to enhance economic competitiveness to prevent practices that drives away businesses from the country.

Acting Executive Secretary Jesus Dureza said it is important that the government enhances capacity building.

“There will be corrupt officials in local government units mulcting people. We will have to implement capacity building measures to enhance economic competitiveness and also to impose punitive measures against local government officials mulcting people,” he said.

Dureza said with the thrust of President Arroyo and the economic team in the Cabinet to enhance economic development through capacity building in local levels, the real work should come from local government units (LGUs).

“We (the central government) provide the initiatives, but ultimately the local people, one stop processing offices that we piloted in many areas will do the work,” Dureza said.

Favila said, for instance, the DTI was being accused of being “biased” on the choice of sites for investment proposals. Favila admitted the bias but said the preference was always on areas where the infrastructure to support business is already in place.

“I have been asked about this, my bias (toward these local areas with conducive business environment), but that’s because they are providing an enabling business environment,” he said.

Favila underscored the role of LGUs in enhancing the economy after taking note of the recent survey reports separately done by the WB-International Finance Corp. (WB-IFC) which had the poor showing of the Philippines and compared it with another done by the Institute for Management Development (IMD), had an improvement in the country’s ranking among 55 countries surveyed due to reforms.

Among the areas covered in the IMD survey included the criteria on economic performance, governance efficiency, infrastructure and improved state finances.

In the IMD survey, the country also placed a poor 40th among 55 surveyed countries which was already a five-notch improvement from an immediate past survey.

Favila said reforms in enhancing the economy will be focused on capacity building and the LGUs codes will have to be in sync with the present rules of national government offices.

Favila said that LGUs in key cities and provinces have been linked through Internet portals with business registry offices including Securities And Exchange Commission, Philippine Health Insurance Corp., Pag-ibig, and Social Security System. This linkage is being done under the DTI one-stop shop processing of documents.

“There is continuing streamlining of processes in key cities, and we are now fast tracking processing under single window,” he said.

The DTI, according to Favila, will continue capacity building of LGUs in this streamlined processing of business documents, “Taguig, Mandaluyong and Caloocan have been catching up with this new process. Makati is already in that league (streamlined process) and we are now in cities outside Metro Manila, in Cebu and Iloilo.

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