A dinner with President Arroyo
The officers and governors of the Manila Overseas Press Club had a thoroughly enjoyable night with President Gloria Arroyo Tuesday (September 18). The MOPC contingent was led by myself as BizNewsAsia publisher and chairman of Asia’s oldest press club and the Philippines’ most prestigious press club, Philippine Star’s Babe Romualdez as president, and Manila Standard Today’s Emil Jurado as vice-president.
With the President was the affable and dapper Press Secretary Toting Bunye, the former Ayala exec who became mayor of Muntinlupa and converted it into a bustling city and alternative business center. He has been GMA’s longest-serving press secretary and the longest serving, postmar tial law.
The five-course dinner was preceded by cocktails with red and white wine and nuts. The President walked into the Palace Music Room looking radiant and ebullient in blue dress and with very little jewelry, except for a diamond brooch and a blue leather-strapped watch which showed two time zones. She had a long day having come from Zamboanga.
The President said she missed Max Soliven. “The defender of the faith,” I remarked. “No, Max was very objective,” she clarified. Someone mentioned Diosdado Macapagal, GMA’s father. I informed GMA “he was the first Philippine president I ever met, in Malacañang, during a Boys and Girls Week event. He had warmth and simplicity but with an aura of power.” He didn’t have GMA’s short fuse, a trait our gracious hostess denied having during the 90-minute dinner.
I was the last journalist who interviewed President Dadong with then Senator Gloria Arroyo serving as interpreter in 1995 at their modest Forbes Park bungalow with a sprawling garden. Dadong talked about his legacy and gave me his book, A Stone for the Edifice, which President Arroyo uses occasionally as her governance bible. Known as the poor boy from Lubao and “The Incorruptible,” Dadong was a bar topnotcher and had a doctorate in both civil law and economics. After the interview, his wife, Eva Macaraeg Macapagal, invited me as “special guest” to dinner at their Forbes Park home. I thought I was the only guest. It turned out to be a victory party for Senator Arroyo’s reelection victory. The main course was chicken.
After that, Dadong fell ill and died in 1997, at the age of 86. “He was no longer lucid,” GMA recalled to us of her father’s final days. I remember Dadong as the president who abolished land tenancy and imposed the first genuine land reform. Rejecting a White House invitation for a state visit, Macapagal changed Independence Day from July 4 to June 12, declared Sabah belonged to the Philippines, and presided over an economy that was the No. 1 in Asia, outside Japan, from 1962 to 1965.
As GMA ushered us into the adjoining formal dining room, she again gave me credit for pointing out for her 2006 State of the Nation address, that the economy has had its strongest and longest expansion “in the last quarter century.” “The last quarter century” would be her favorite expression in succeeding speeches. Of late, the phrase has been replaced by “the best in a generation,” which is 30 years.
The economy was the main topic with the President during the rather sumptuous (by GMA’s Spartan standards, anyway) of seared fish fillet and pasta, capped with luscious chocolate cake and brewed coffee. She was agog about the Wall Street Journal’s gung-ho page one article by James Hookway, a frequent Manila visitor. WSJ reported September 13 “the perpetual sick man of Asia is making an unexpected recovery,” quotes Adrian Mowat, a stock strategist, saying, “the Philippines could be the next India in terms of its ability to surprise” and gives credit to President Arroyo. “The next India”—the President relished it. I reminded her India is not exactly a good metaphor because as a ratio of the population or percentage-wise, the Philippines has a greater middle class.
“The stock market has soared over the past two years, although it has faltered recently. Foreign investors are coming back, attracted by the Philippines’ young population—the average age of its 89 million people is 22—and the widespread use of English, a legacy of its past as an American colony. The call-center business is thriving, some of it poached from India,” Hookway asserted. “Two years ago, with thousands of street pro testors threatening to oust her and the country drifting toward a financial crisis, she pushed a higher sales tax through Congress and signed it into law over the objections of her advisers. The move raised the tax to 12 percent from 10 percent and expanded it to a range of new products and services, including gasoline.”
I am glad the foreign press is finally getting the drift which my BizNewsAsia weekly magazine had been pointing out, before anybody was looking—the Philippine economy was growing at its best “in the last quarter century” and will be, as Goldman Sachs predicts, become one of the 15 richest countries on earth in 50 years.
President Arroyo was all vivacity and verve during the dinner, oblivious of any problem or negative concern. Her secret? “I hear Mass every day, do aerobics three times a week, and have seven hours of sleep every night.” “Do you ever have a problem?” I asked her. She just smiled.
Email me at biznewsasia@gmail.com
Tuesday, October 9, 2007
Who are making money
The rich Filipinos
The top moneymakers of 2006 were also the top money makers in the first half of 2007in the Philippines. This proves the viability of the business model of these companies, all listed in the Philippine Stock Exchange, and the sustainability of the economic takeoff.
Also, the very richest Philippine families keep getting richer everyday because they are the owners of these immensely profitable companies. As I keep saying, only 160 families own the economy and the politics of this country. The Philippines has one of the world’s worst income inequality ratios, according to World Bank data.
In 2006, the biggest publicly listed money spinners in terms of profits were: 1. Philippine Long Distance Telephone of telcom mogul Manny Pangi linan and the Salim family of Indonesia, P35.3 billion; 2. First Philippine Holdings Corp. of the (Oscar) Lopez family, P15.46 billion; 3. SM Investments Corp. of Henry Sy Sr., P15.24 billion; 4. Ayala Corp. of the Zobel-Ayala family, P14.46 billion; 5. Meralco, again, of the (Oscar and Manolo) Lopez family, P13.88 billion, 6. Globe Telecom, again of the Ayala family, P11.75 billion; 7. San Miguel Corp. of Danding Cojuangco, Henry Sy and Kirin Brewery, P10.17 billion; 8. Piltel of again, Manny Pangilinan, P10.07 billion; 9. Bank of PI of still again, the Ayala family, P9.14 billion; and 10. JG Summit Holdings of taipan John Gokongwei Jr., P8.69 billion.
Among the holding companies, the biggest money makers in 2006 were: 1. SM Investments Corp. P15.24 billion; 2. Ayala Corp. P14.4 billion; 3. JG Summit Holdings P8.69 billion; 4. Benpres Holdings, also of Lopez, P4.6 billion; 5. Aboitiz Equity Holdings P3.8 billion; 6. A. Soriano Corp. P3.1 billion; 7. Filinvest Development of Andrew Gotianun, P1.42 billion; 8. DMCI Holdings of the Consunji family, P1.38 billion; 9. PAL Holdings of Lucio Tan, P1.2 billion; and 10. Alliance Global of Andrew Tan and George Yang, P888 million.
In the first half of 2007, the 10 largest profit makers were: 1. PLDT P17 billion; 2. Ayala Corp. P11.49 billion; 3. SMC P7.87 billion; 4. Globe P6.42 billion; 5. PAL Holdings P6.32 billion; 6. SM Investments Corp. P5.86 billion; 7. Bank of PI P5.7 billion; 8. PNOC Energy Development P4.2 billion; 9. JG Summit P3.83 billion; and Metrobank of taipan George Ty P3.69 billion.
In the first semester, listed domestic companies increased their earnings by a whopping 41.4 percent to P148.75 billion from P105.2 billion in the same period last year.
Francis Lim, president and CEO of the Philippine Stock Exchange that conducted the study, says “the performance of the listed companies last year once again provides clear proof that steps being taken by the government to improve the country’s macro-economic environment, especially to lower interest and inflation rates, have benefited companies.”
Lim says the combined gross revenues of the listed companies went up by15.1 percent to P1.18 trillion during the first half of the year from P1.02 trillion a year earlier.
Lim sees further improvement in the balance of 2007 and a continued rise in the stock market.
As of June 30, 2006, the market capitalization of listed companies amounted to P6.33 trillion. That increased to P7.6 trillion in the first quarter and further to P8.32 trillion in the second quarter of 2007. Between June 2006 and June 2007, owners of listed stocks hauled in an additional P1.987 trillion in wealth. That’s 1,987 billion pesos of added wealth without their owners exerting much effort.
If you assume that the 160 richest families of this country owned the listed stocks, each of these families made additional wealth of P12.42 billion on the average, in just 12 months. Of course, some of the listed companies are owned by foreign investors, in whole and in part. In terms of voting control, for instance, PLDT is run by foreign owners, with Manny Pangilinan serving as their surrogate.
Indeed, of total market cap of P8.32 trillion, only P4.38 billion is domestic capitalization, leaving P3.94 trillion or 47.3 percent as foreign market cap. The P3.94 trillion foreign market cap is understated because companies like PLDT, which is foreign-controlled, is reckoned as domestic.
The PSE-listed companies reported combined six-month net income of P148.75 billion. Holding companies accounted for P38.9 billion or 26 percent of total profits, followed by the industrial sector, P35.27 billion or 23.7 percent, services P31.79 billion or 21.4 percent, financials P24.27 billion or 16.3 percent, property P14.8 billion or 10 percent; and mining P3.62 billion 2.4 percent. SMEs had a P54.57 million share or a paltry one-third of one percent or 0.03 percent.
The Big Boys made 99.7 percent of total profits of listed stocks; the SMEs settled for barely a third of a percent. That’s how ridiculous the income disparity is.
Email me at biznewsasia@gmail.com
The top moneymakers of 2006 were also the top money makers in the first half of 2007in the Philippines. This proves the viability of the business model of these companies, all listed in the Philippine Stock Exchange, and the sustainability of the economic takeoff.
Also, the very richest Philippine families keep getting richer everyday because they are the owners of these immensely profitable companies. As I keep saying, only 160 families own the economy and the politics of this country. The Philippines has one of the world’s worst income inequality ratios, according to World Bank data.
In 2006, the biggest publicly listed money spinners in terms of profits were: 1. Philippine Long Distance Telephone of telcom mogul Manny Pangi linan and the Salim family of Indonesia, P35.3 billion; 2. First Philippine Holdings Corp. of the (Oscar) Lopez family, P15.46 billion; 3. SM Investments Corp. of Henry Sy Sr., P15.24 billion; 4. Ayala Corp. of the Zobel-Ayala family, P14.46 billion; 5. Meralco, again, of the (Oscar and Manolo) Lopez family, P13.88 billion, 6. Globe Telecom, again of the Ayala family, P11.75 billion; 7. San Miguel Corp. of Danding Cojuangco, Henry Sy and Kirin Brewery, P10.17 billion; 8. Piltel of again, Manny Pangilinan, P10.07 billion; 9. Bank of PI of still again, the Ayala family, P9.14 billion; and 10. JG Summit Holdings of taipan John Gokongwei Jr., P8.69 billion.
Among the holding companies, the biggest money makers in 2006 were: 1. SM Investments Corp. P15.24 billion; 2. Ayala Corp. P14.4 billion; 3. JG Summit Holdings P8.69 billion; 4. Benpres Holdings, also of Lopez, P4.6 billion; 5. Aboitiz Equity Holdings P3.8 billion; 6. A. Soriano Corp. P3.1 billion; 7. Filinvest Development of Andrew Gotianun, P1.42 billion; 8. DMCI Holdings of the Consunji family, P1.38 billion; 9. PAL Holdings of Lucio Tan, P1.2 billion; and 10. Alliance Global of Andrew Tan and George Yang, P888 million.
In the first half of 2007, the 10 largest profit makers were: 1. PLDT P17 billion; 2. Ayala Corp. P11.49 billion; 3. SMC P7.87 billion; 4. Globe P6.42 billion; 5. PAL Holdings P6.32 billion; 6. SM Investments Corp. P5.86 billion; 7. Bank of PI P5.7 billion; 8. PNOC Energy Development P4.2 billion; 9. JG Summit P3.83 billion; and Metrobank of taipan George Ty P3.69 billion.
In the first semester, listed domestic companies increased their earnings by a whopping 41.4 percent to P148.75 billion from P105.2 billion in the same period last year.
Francis Lim, president and CEO of the Philippine Stock Exchange that conducted the study, says “the performance of the listed companies last year once again provides clear proof that steps being taken by the government to improve the country’s macro-economic environment, especially to lower interest and inflation rates, have benefited companies.”
Lim says the combined gross revenues of the listed companies went up by15.1 percent to P1.18 trillion during the first half of the year from P1.02 trillion a year earlier.
Lim sees further improvement in the balance of 2007 and a continued rise in the stock market.
As of June 30, 2006, the market capitalization of listed companies amounted to P6.33 trillion. That increased to P7.6 trillion in the first quarter and further to P8.32 trillion in the second quarter of 2007. Between June 2006 and June 2007, owners of listed stocks hauled in an additional P1.987 trillion in wealth. That’s 1,987 billion pesos of added wealth without their owners exerting much effort.
If you assume that the 160 richest families of this country owned the listed stocks, each of these families made additional wealth of P12.42 billion on the average, in just 12 months. Of course, some of the listed companies are owned by foreign investors, in whole and in part. In terms of voting control, for instance, PLDT is run by foreign owners, with Manny Pangilinan serving as their surrogate.
Indeed, of total market cap of P8.32 trillion, only P4.38 billion is domestic capitalization, leaving P3.94 trillion or 47.3 percent as foreign market cap. The P3.94 trillion foreign market cap is understated because companies like PLDT, which is foreign-controlled, is reckoned as domestic.
The PSE-listed companies reported combined six-month net income of P148.75 billion. Holding companies accounted for P38.9 billion or 26 percent of total profits, followed by the industrial sector, P35.27 billion or 23.7 percent, services P31.79 billion or 21.4 percent, financials P24.27 billion or 16.3 percent, property P14.8 billion or 10 percent; and mining P3.62 billion 2.4 percent. SMEs had a P54.57 million share or a paltry one-third of one percent or 0.03 percent.
The Big Boys made 99.7 percent of total profits of listed stocks; the SMEs settled for barely a third of a percent. That’s how ridiculous the income disparity is.
Email me at biznewsasia@gmail.com
John Gokongwei's Nine Rules of Success
Gokongwei’s nine rules
Ateneo has produced a book on John Gokongwei Jr., The Path of Entrepreneurship by Marites A. Khanser. John gave me a copy with his dedication, “To my dear friend.” More than a biography, the tome is a textbook on management and entrepreneurship.
The book also uses data, anecdotes and stories from articles in the course of my coverage of John Gokongwei since 1974 when I first met him fighting for a board seat in San Miguel Corp. He made three or four forays into SMC and failed each time. The board battles and proxy wars brought John to the limelight and he benefited immensely from the experience.
Just before the old man Andres Soriano Jr. died (of cancer), the SMC CEO invited John to join the SMC Hong Kong and the Anscor boards and sold him the Itemcop property on Pioneer at a spectacular bargain, P1,000 per square meter. Today, it is worth 50 times and has become John’s Cyber Park.
To me, the most important chapter in the book is Chapter 20, “The Nine Rules for Business Success” which John himself wrote.
1. Change is inevitable and flexibility is the key.
2. Personal stakes in the company encourage everyone to work hard.
3. Mistakes and disappointments are inevitable.
4. Good brand building equals reputation.
5. Family support is crucial.
6. Never lose sleep thinking of business risks.
7. Pausing to recharge brings new vigor.
8. Reading and traveling enrich one’s mind.
9. Philanthropy is a personal satisfaction.
The rules sound very good—on paper and if you are already a John Gokongwei. If you are budding entrepreneur with little capital in a fiercely competitive market, I don’t think you can subscribe to Rule No. 6 (about never losing sleep) and Rule No. 9 (you cannot give what you don’t have yet).
On Rule One, John says he always looks for “new developments in the business environment for information and policies, which may affect our operations. The decision to move from peddling soap on bicycles to bringing tires to Manila on batels, to opening the first flour company, to being one of the largest conglomerates in the Philippines today is a testament to that flexibility. Even during the difficult times under martial law or during the 1997 Asian financial crisis, our group was one of the Filipino companies to survive and prosper because of our flexibility and adaptability to change and adversity.”
On Rule No. 2, John gave each of his siblings’ shares in the company. “They all worked very hard for its progress,” he says. “However, it is not my siblings, but also our employees who are committed to making our business successful. We are currently studying a stock option plan to be given to employees worth promoting and keeping, giving them the same sense of ownership like those of my siblings. I am happy to note that JG Summit’s stockholder’s equity has grown more than eleven times since 1990 from P6.797 billion to P68.866 billion.” Net worth is P95 billion by now.
On Rule Three, John made a number of mistakes. They include, I believe, the purchase of Oriential Petroleum (it didn’t produce oil) and the money-losing ice cream, petrochemicals and textile businesses. John lost more than P3 billion from petrochemicals last year but made up for that by hauling P2 billion in profits in six months of 2007 from Cebu Pacific. He lost billions from Oriental but gained billions from profits and sale of his PCIBank stake.
Says John: “Take them [the mistakes] in stride, learn the lessons, and move on. One rule we abide by in any business dealings is risking only up to 15% of our net worth in any single venture. When businesses aren’t growing, we let it go.”
On Rule No. 2, John says “one of the most important things in our business is building brands. Having good brands translates to quality, reputation, and good governance. Our conglomerate is now in seven industries, and we continuously build top brands.” Universal Robina Corp.’s Branded Consumer Foods Group is the largest and is now present in seven Asian countries.
Rule No. 5 is the same as Rule No. 2. John’s anchor is his wife, Bia, who “has always been there to support all my decisions and never got in the way. Oftentimes, she serves as my sounding board. She is receptive and gives good advice. In fact, most do not know that she organized what is now our retail business. She was also there, taking care of the children, making sure they grew up to be good, responsible individuals, while I was busy expanding the business. She has indeed done a good job.”
He also attributes his success to the support of his mother, Juanita Lim, and his siblings, Henry, Lily, Johnson and James, and his close friends, Gabriel Singson, Pacifico Yap, and Ignacio Gotao, and his old friends in Cebu, Mario Mendezona, Atty. Paquito Borromeo, and Ramiro Valenzuela.
On Rule No. 6, John says “sleeping is a joy of life. My daily routine consists of an afternoon nap. As much as possible, I do not accept lunch appointments so as not to miss my nap that invigorates me to work in the office up to dinnertime.”
Email me at biznewsasia@gmail.com
Ateneo has produced a book on John Gokongwei Jr., The Path of Entrepreneurship by Marites A. Khanser. John gave me a copy with his dedication, “To my dear friend.” More than a biography, the tome is a textbook on management and entrepreneurship.
The book also uses data, anecdotes and stories from articles in the course of my coverage of John Gokongwei since 1974 when I first met him fighting for a board seat in San Miguel Corp. He made three or four forays into SMC and failed each time. The board battles and proxy wars brought John to the limelight and he benefited immensely from the experience.
Just before the old man Andres Soriano Jr. died (of cancer), the SMC CEO invited John to join the SMC Hong Kong and the Anscor boards and sold him the Itemcop property on Pioneer at a spectacular bargain, P1,000 per square meter. Today, it is worth 50 times and has become John’s Cyber Park.
To me, the most important chapter in the book is Chapter 20, “The Nine Rules for Business Success” which John himself wrote.
1. Change is inevitable and flexibility is the key.
2. Personal stakes in the company encourage everyone to work hard.
3. Mistakes and disappointments are inevitable.
4. Good brand building equals reputation.
5. Family support is crucial.
6. Never lose sleep thinking of business risks.
7. Pausing to recharge brings new vigor.
8. Reading and traveling enrich one’s mind.
9. Philanthropy is a personal satisfaction.
The rules sound very good—on paper and if you are already a John Gokongwei. If you are budding entrepreneur with little capital in a fiercely competitive market, I don’t think you can subscribe to Rule No. 6 (about never losing sleep) and Rule No. 9 (you cannot give what you don’t have yet).
On Rule One, John says he always looks for “new developments in the business environment for information and policies, which may affect our operations. The decision to move from peddling soap on bicycles to bringing tires to Manila on batels, to opening the first flour company, to being one of the largest conglomerates in the Philippines today is a testament to that flexibility. Even during the difficult times under martial law or during the 1997 Asian financial crisis, our group was one of the Filipino companies to survive and prosper because of our flexibility and adaptability to change and adversity.”
On Rule No. 2, John gave each of his siblings’ shares in the company. “They all worked very hard for its progress,” he says. “However, it is not my siblings, but also our employees who are committed to making our business successful. We are currently studying a stock option plan to be given to employees worth promoting and keeping, giving them the same sense of ownership like those of my siblings. I am happy to note that JG Summit’s stockholder’s equity has grown more than eleven times since 1990 from P6.797 billion to P68.866 billion.” Net worth is P95 billion by now.
On Rule Three, John made a number of mistakes. They include, I believe, the purchase of Oriential Petroleum (it didn’t produce oil) and the money-losing ice cream, petrochemicals and textile businesses. John lost more than P3 billion from petrochemicals last year but made up for that by hauling P2 billion in profits in six months of 2007 from Cebu Pacific. He lost billions from Oriental but gained billions from profits and sale of his PCIBank stake.
Says John: “Take them [the mistakes] in stride, learn the lessons, and move on. One rule we abide by in any business dealings is risking only up to 15% of our net worth in any single venture. When businesses aren’t growing, we let it go.”
On Rule No. 2, John says “one of the most important things in our business is building brands. Having good brands translates to quality, reputation, and good governance. Our conglomerate is now in seven industries, and we continuously build top brands.” Universal Robina Corp.’s Branded Consumer Foods Group is the largest and is now present in seven Asian countries.
Rule No. 5 is the same as Rule No. 2. John’s anchor is his wife, Bia, who “has always been there to support all my decisions and never got in the way. Oftentimes, she serves as my sounding board. She is receptive and gives good advice. In fact, most do not know that she organized what is now our retail business. She was also there, taking care of the children, making sure they grew up to be good, responsible individuals, while I was busy expanding the business. She has indeed done a good job.”
He also attributes his success to the support of his mother, Juanita Lim, and his siblings, Henry, Lily, Johnson and James, and his close friends, Gabriel Singson, Pacifico Yap, and Ignacio Gotao, and his old friends in Cebu, Mario Mendezona, Atty. Paquito Borromeo, and Ramiro Valenzuela.
On Rule No. 6, John says “sleeping is a joy of life. My daily routine consists of an afternoon nap. As much as possible, I do not accept lunch appointments so as not to miss my nap that invigorates me to work in the office up to dinnertime.”
Email me at biznewsasia@gmail.com
The writ of Amparo, Philippine style
The writ of amparo, RP style
Not many people know it but the Supreme Court of the Philippines is a Congress by itself. It can legislate, which means it may violate one of the basic principles of a democracy— no taxation without representation.
As a legislature, our Supreme Court has adopted what is called the writ of amparo. The writ of amparo is a concept enshrined in the Mexican Constitution since 1857 and adopted by a dozen other Latin American countries but which in the Philippines nobody has heard about until the 1991 bar examinations when Ateneo law professor Adolf Azcuna incorporated it as a perplexing question. Not surprisingly in the 1991 bar, Ateneo graduates were the topnotchers. Adolf is now an SC justice which may explain why the High Tribunal is suddenly warm to the idea.
The writ of amparo, says our Supreme Court, is a remedy available to any person whose right to life, liberty and security is violated or threatened with violation by an unlawful act or omission of a public official or employee, or of a private individual or entity. The writ shall cover extralegal killings and enforced disappearances or threats of extralegal killings and enforced disappearances.
In Mexico, the writ is applied against government officials, particularly the president. Here, the writ is applied against both public officials and private persons, both government corporations and private corporations. In that sense, the writ of amparo becomes a very powerful protection for rights of citizens and of corporations. Amparo is Spanish for protection.
Under this broad meaning and applying it as a layman, I take to use the writ of amparo as intended to protect not just life, not just liberty, not just security—but economic security which to me means your job, your livelihood.
In that sense, I believe the writ of amparo is an awesome tool against corruption, by both government and the private sector. You can argue that you are poor because you have no job or economic security. You have no economic security because the economy is doing poorly. The economy is doing poorly because the government is corrupt. It sounds like an extended logic but it is an argument easy to understand.
As a tool against corruption, the writ of amparo can be construed as a means to lessen government corruption. Lawyers, if they know their marbles, should explore this possibility—using the writ of amparo as a veritable weapon against corruption.
The writ of amparo can be filed, at any time, with any courts in the Philippines—regional trial courts, Sandigan, Court of Appeals, the Supreme Court or any justice of such courts. The writ is enforceable anywhere in the country. There are no docket fees. Thus, it is a pro-poor measure.
The respondent must file within 72 hours a written reply, with supporting affidavits. The respondent must say he did not violate or threaten to violate the right to life, liberty and security of the aggrieved party, through any act or omission. Omission means even if you did not act, it is an act by itself.
One beautiful thing about the writ is its power of discovery. It wants to know what the respondent has done to determine the fate or whereabouts of the aggrieved party and the person or persons responsible for the threat, act or omission and what information the respondent has in this regard.
If the respondent is a government official, he must state what further actions he will take to verify the identity of the aggrieved party, recover and preserve evidence related to the death or disappearance; identify witnesses and obtain statements from them; determine the cause, manner, location and time of death or disappearance, as well as any pattern or practice that may have brought about the death or disappearance; identify and apprehend the suspects, and bring the suspects before a competent court.
So if you are the chief of staff of the Armed Forces or the chief of the Philippine National Police, you cannot just claim the dead or missing person is not in your territory (the usual answer in a writ of habeas corpus). You tell the court where the dead or missing person could possibly be, locate it, identify the suspects, apprehend them, gather information and evidence, and bring the suspects to court. In effect, if you are the suspect mastermind, you must turn yourself in, gather evidence against yourself, and help in your own prosecution.
What is your penalty for not doing so? You will be subject to contempt of court. So if you are General Hermogenes Esperon of the Armed Forces of the Philippines or General Avelino Razo of the Philippine National Police, take the contempt of court anytime. It is a lesser penalty than being the suspect yourself.
Also, the complainants or agents of the court can visit, inspect and ransack your office to gather evidence and locate the dead or missing person.
Imagine Gloria Arroyo coming forward and proclaiming herself guilty of hundreds of disappearances and unexplained killings. Or guilty of the poverty of the people. Can that happen? No way, Jose.
Email me at biznewsasia@gmail.com
Not many people know it but the Supreme Court of the Philippines is a Congress by itself. It can legislate, which means it may violate one of the basic principles of a democracy— no taxation without representation.
As a legislature, our Supreme Court has adopted what is called the writ of amparo. The writ of amparo is a concept enshrined in the Mexican Constitution since 1857 and adopted by a dozen other Latin American countries but which in the Philippines nobody has heard about until the 1991 bar examinations when Ateneo law professor Adolf Azcuna incorporated it as a perplexing question. Not surprisingly in the 1991 bar, Ateneo graduates were the topnotchers. Adolf is now an SC justice which may explain why the High Tribunal is suddenly warm to the idea.
The writ of amparo, says our Supreme Court, is a remedy available to any person whose right to life, liberty and security is violated or threatened with violation by an unlawful act or omission of a public official or employee, or of a private individual or entity. The writ shall cover extralegal killings and enforced disappearances or threats of extralegal killings and enforced disappearances.
In Mexico, the writ is applied against government officials, particularly the president. Here, the writ is applied against both public officials and private persons, both government corporations and private corporations. In that sense, the writ of amparo becomes a very powerful protection for rights of citizens and of corporations. Amparo is Spanish for protection.
Under this broad meaning and applying it as a layman, I take to use the writ of amparo as intended to protect not just life, not just liberty, not just security—but economic security which to me means your job, your livelihood.
In that sense, I believe the writ of amparo is an awesome tool against corruption, by both government and the private sector. You can argue that you are poor because you have no job or economic security. You have no economic security because the economy is doing poorly. The economy is doing poorly because the government is corrupt. It sounds like an extended logic but it is an argument easy to understand.
As a tool against corruption, the writ of amparo can be construed as a means to lessen government corruption. Lawyers, if they know their marbles, should explore this possibility—using the writ of amparo as a veritable weapon against corruption.
The writ of amparo can be filed, at any time, with any courts in the Philippines—regional trial courts, Sandigan, Court of Appeals, the Supreme Court or any justice of such courts. The writ is enforceable anywhere in the country. There are no docket fees. Thus, it is a pro-poor measure.
The respondent must file within 72 hours a written reply, with supporting affidavits. The respondent must say he did not violate or threaten to violate the right to life, liberty and security of the aggrieved party, through any act or omission. Omission means even if you did not act, it is an act by itself.
One beautiful thing about the writ is its power of discovery. It wants to know what the respondent has done to determine the fate or whereabouts of the aggrieved party and the person or persons responsible for the threat, act or omission and what information the respondent has in this regard.
If the respondent is a government official, he must state what further actions he will take to verify the identity of the aggrieved party, recover and preserve evidence related to the death or disappearance; identify witnesses and obtain statements from them; determine the cause, manner, location and time of death or disappearance, as well as any pattern or practice that may have brought about the death or disappearance; identify and apprehend the suspects, and bring the suspects before a competent court.
So if you are the chief of staff of the Armed Forces or the chief of the Philippine National Police, you cannot just claim the dead or missing person is not in your territory (the usual answer in a writ of habeas corpus). You tell the court where the dead or missing person could possibly be, locate it, identify the suspects, apprehend them, gather information and evidence, and bring the suspects to court. In effect, if you are the suspect mastermind, you must turn yourself in, gather evidence against yourself, and help in your own prosecution.
What is your penalty for not doing so? You will be subject to contempt of court. So if you are General Hermogenes Esperon of the Armed Forces of the Philippines or General Avelino Razo of the Philippine National Police, take the contempt of court anytime. It is a lesser penalty than being the suspect yourself.
Also, the complainants or agents of the court can visit, inspect and ransack your office to gather evidence and locate the dead or missing person.
Imagine Gloria Arroyo coming forward and proclaiming herself guilty of hundreds of disappearances and unexplained killings. Or guilty of the poverty of the people. Can that happen? No way, Jose.
Email me at biznewsasia@gmail.com
The writ of amparo, RP style
Not many people know it but the Supreme Court of the Philippines is a Congress by itself. It can legislate, which means it may violate one of the basic principles of a democracy— no taxation without representation.
As a legislature, our Supreme Court has adopted what is called the writ of amparo. The writ of amparo is a concept enshrined in the Mexican Constitution since 1857 and adopted by a dozen other Latin American countries but which in the Philippines nobody has heard about until the 1991 bar examinations when Ateneo law professor Adolf Azcuna incorporated it as a perplexing question. Not surprisingly in the 1991 bar, Ateneo graduates were the topnotchers. Adolf is now an SC justice which may explain why the High Tribunal is suddenly warm to the idea.
The writ of amparo, says our Supreme Court, is a remedy available to any person whose right to life, liberty and security is violated or threatened with violation by an unlawful act or omission of a public official or employee, or of a private individual or entity. The writ shall cover extralegal killings and enforced disappearances or threats of extralegal killings and enforced disappearances.
In Mexico, the writ is applied against government officials, particularly the president. In the Philippines, the writ is applied against both public officials and private persons, both government corporations and private corporations. In that sense, the writ of amparo becomes a very powerful protection for rights of citizens and of corporations. Amparo is Spanish for protection.
Under this broad meaning and applying it as a layman, I take to use the writ of amparo as intended to protect not just life, not just liberty, not just security—but economic security which to me means your job, your livelihood.
In that sense, I believe the writ of amparo is an awesome tool against corruption, by both government and the private sector. You can argue that you are poor because you have no job or economic security. You have no economic security because the economy is doing poorly. The economy is doing poorly because the government is corrupt. It sounds like an extended logic but it is an argument easy to understand.
As a tool against corruption, the writ of amparo can be construed as a means to lessen government corruption. Lawyers, if they know their marbles, should explore this possibility—using the writ of amparo as a veritable weapon against corruption.
The writ of amparo can be filed, at any time, with any courts in the Philippines—regional trial courts, Sandigan, Court of Appeals, the Supreme Court or any justice of such courts. The writ is enforceable anywhere in the country. There are no docket fees. Thus, it is a pro-poor measure.
The respondent must file within 72 hours a written reply, with supporting affidavits. The respondent must say he did not violate or threaten to violate the right to life, liberty and security of the aggrieved party, through any act or omission. Omission means even if you did not act, it is an act by itself.
One beautiful thing about the writ is its power of discovery. It wants to know what the respondent has done to determine the fate or whereabouts of the aggrieved party and the person or persons responsible for the threat, act or omission and what information the respondent has in this regard.
If the respondent is a government official, he must state what further actions he will take to verify the identity of the aggrieved party, recover and preserve evidence related to the death or disappearance; identify witnesses and obtain statements from them; determine the cause, manner, location and time of death or disappearance, as well as any pattern or practice that may have brought about the death or disappearance; identify and apprehend the suspects, and bring the suspects before a competent court.
So if you are the chief of staff of the Armed Forces or the chief of the Philippine National Police, you cannot just claim the dead or missing person is not in your territory (the usual answer in a writ of habeas corpus). You tell the court where the dead or missing person could possibly be, locate it, identify the suspects, apprehend them, gather information and evidence, and bring the suspects to court. In effect, if you are the suspect mastermind, you must turn yourself in, gather evidence against yourself, and help in your own prosecution.
What is your penalty for not doing so? You will be subject to contempt of court. So if you are General Hermogenes Esperon of the Armed Forces of the Philippines or General Avelino Razon of the Philippine National Police take the contempt of court anytime. It is a lesser penalty than being the suspect yourself.
Also, the complainants or agents of the court can visit, inspect and ransack your office to gather evidence and locate the dead or missing person.
Imagine Gloria Arroyo coming forward and proclaiming herself guilty of hundreds of disappearances and unexplained killings. Or guilty of the poverty of the people. Can that happen? No way, Jose.
Email me at biznewsasia@gmail.com
Not many people know it but the Supreme Court of the Philippines is a Congress by itself. It can legislate, which means it may violate one of the basic principles of a democracy— no taxation without representation.
As a legislature, our Supreme Court has adopted what is called the writ of amparo. The writ of amparo is a concept enshrined in the Mexican Constitution since 1857 and adopted by a dozen other Latin American countries but which in the Philippines nobody has heard about until the 1991 bar examinations when Ateneo law professor Adolf Azcuna incorporated it as a perplexing question. Not surprisingly in the 1991 bar, Ateneo graduates were the topnotchers. Adolf is now an SC justice which may explain why the High Tribunal is suddenly warm to the idea.
The writ of amparo, says our Supreme Court, is a remedy available to any person whose right to life, liberty and security is violated or threatened with violation by an unlawful act or omission of a public official or employee, or of a private individual or entity. The writ shall cover extralegal killings and enforced disappearances or threats of extralegal killings and enforced disappearances.
In Mexico, the writ is applied against government officials, particularly the president. In the Philippines, the writ is applied against both public officials and private persons, both government corporations and private corporations. In that sense, the writ of amparo becomes a very powerful protection for rights of citizens and of corporations. Amparo is Spanish for protection.
Under this broad meaning and applying it as a layman, I take to use the writ of amparo as intended to protect not just life, not just liberty, not just security—but economic security which to me means your job, your livelihood.
In that sense, I believe the writ of amparo is an awesome tool against corruption, by both government and the private sector. You can argue that you are poor because you have no job or economic security. You have no economic security because the economy is doing poorly. The economy is doing poorly because the government is corrupt. It sounds like an extended logic but it is an argument easy to understand.
As a tool against corruption, the writ of amparo can be construed as a means to lessen government corruption. Lawyers, if they know their marbles, should explore this possibility—using the writ of amparo as a veritable weapon against corruption.
The writ of amparo can be filed, at any time, with any courts in the Philippines—regional trial courts, Sandigan, Court of Appeals, the Supreme Court or any justice of such courts. The writ is enforceable anywhere in the country. There are no docket fees. Thus, it is a pro-poor measure.
The respondent must file within 72 hours a written reply, with supporting affidavits. The respondent must say he did not violate or threaten to violate the right to life, liberty and security of the aggrieved party, through any act or omission. Omission means even if you did not act, it is an act by itself.
One beautiful thing about the writ is its power of discovery. It wants to know what the respondent has done to determine the fate or whereabouts of the aggrieved party and the person or persons responsible for the threat, act or omission and what information the respondent has in this regard.
If the respondent is a government official, he must state what further actions he will take to verify the identity of the aggrieved party, recover and preserve evidence related to the death or disappearance; identify witnesses and obtain statements from them; determine the cause, manner, location and time of death or disappearance, as well as any pattern or practice that may have brought about the death or disappearance; identify and apprehend the suspects, and bring the suspects before a competent court.
So if you are the chief of staff of the Armed Forces or the chief of the Philippine National Police, you cannot just claim the dead or missing person is not in your territory (the usual answer in a writ of habeas corpus). You tell the court where the dead or missing person could possibly be, locate it, identify the suspects, apprehend them, gather information and evidence, and bring the suspects to court. In effect, if you are the suspect mastermind, you must turn yourself in, gather evidence against yourself, and help in your own prosecution.
What is your penalty for not doing so? You will be subject to contempt of court. So if you are General Hermogenes Esperon of the Armed Forces of the Philippines or General Avelino Razon of the Philippine National Police take the contempt of court anytime. It is a lesser penalty than being the suspect yourself.
Also, the complainants or agents of the court can visit, inspect and ransack your office to gather evidence and locate the dead or missing person.
Imagine Gloria Arroyo coming forward and proclaiming herself guilty of hundreds of disappearances and unexplained killings. Or guilty of the poverty of the people. Can that happen? No way, Jose.
Email me at biznewsasia@gmail.com
Comnmercialism from Pacquiao'sfight
Commercialism
The Oct. 7, 2007 Manny Pacquiao-Marco Antonio Barrera fight is a classic example of crass commercialism by the television station that bagged the contract, GMA Network Channel 7. There were at least a dozen commercials for each round break. Now publicly listed, Channel 7 must have hauled in a fortune in broadcasting the fight which lasted the full distance of 12 rounds.
Good for the station, the sponsors and the advertisers, both fighters, normally knock-out specialists, had the strength and stamina for an extended title fight. A number of tv viewers must have been irritated with the overwhelming number of commercials. What should take 45 minutes lasted three hours on television. But what can viewers do?
Fortunately for those with Internet connection, the results of the fight, including the round by round tally, were on the web, an hour ahead of Channel 7.
***
A reader who goes by the pen name, Jose Pidal, reacted to my column last week. On Oct. 5, I wrote that it is getting more difficult each day to do business in the Philippines. Regulations have not been simplified. They have become more complex. Red tape has not been reduced. It has worsened.
The latest survey by the World Bank of 178 countries, the Philippines ranks No. 133 in ease of doing business, down 12 rungs from 121 in 2006. The country is not competitive for businessmen, local and foreign, to do business in. Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business.
Our neighbors, notably, China, India, Vietnam and even Indonesia have leapfrogged over us in making things easy for businessmen.
The World Bank says starting a business here takes 15 steps and 58 days and will cost 26.8 percent of your capital. That’s very expensive. The government takes away – in fees, licenses, and approval money, more than a quarter of your capital even before you could begin business.
Reader Pidal comments:
“I enjoyed your column on "Doing business"
In my town I go often to City Hall to deal with the multitude of things just to keep all my taxes, fees and permits and licenses up to date so I can run the business. When there, I notice more and more people sitting inside the offices with each visit.
“When I inquire, the answer is always the same. Those are the casuals, supporters of the Mayor in the last election.. And therein lies the old adage "too many cooks spoil the broth"...
“With all these people now touching and handling every single scrap of paper no wonder there is more red tape! The City Hall is duty bound to create more bureaucracy to support all the people it has to keep busy on a daily basis.”
“For weeks after the last mayoral election in our town, I had a hard time getting to my mother-in-law's home as she lived next door to the incoming mayor. There were lines of people waiting up and down the street just to get in and soak up the gravy. Some days it was impossible to even park in her driveway as it was filled with people.
I'm sure this is played out in cities and towns across our country after every election. As long as we behave this way, it will be more and more difficult to start an enterprise in this country. For many of our youth, there are really only 2 options, #1 try to get out, or #2 if you can't get out, then try for a job in our only growth industry - City Hall.”
“What can be done about this? The fact that there is so much money to be had or made one way or another by being in politics is the root cause of this. This country lags way behind
many others in fighting even the most basic corruption. Many of our politicians even lack the basic delicadezza to hide their greed. In my town all public works contracts go to the mayor's construction company, on a provincial basis the contracts go to the governor's company or get soaked up through the efforts of our governor's brother.. who is our congressman.”
“Whenever I visit the NCR and I stay there, I can always tell who is soaking up the cash by the prominent letter at the base of the streetlights. My niece visiting from the Spain once asked if the streetlights were privately owned. I told her that a certain family felt that indeed they owned the streetlights, but they used public money to build them.....as long as this goes on and on, common people will continue to be used to it as a ‘normal’ way of life and nothing will change or ever get better.”
“I appreciate your column on doing business, I just wish doing business here was getting easier!”
Email me at biznewasia@gmail.com
The Oct. 7, 2007 Manny Pacquiao-Marco Antonio Barrera fight is a classic example of crass commercialism by the television station that bagged the contract, GMA Network Channel 7. There were at least a dozen commercials for each round break. Now publicly listed, Channel 7 must have hauled in a fortune in broadcasting the fight which lasted the full distance of 12 rounds.
Good for the station, the sponsors and the advertisers, both fighters, normally knock-out specialists, had the strength and stamina for an extended title fight. A number of tv viewers must have been irritated with the overwhelming number of commercials. What should take 45 minutes lasted three hours on television. But what can viewers do?
Fortunately for those with Internet connection, the results of the fight, including the round by round tally, were on the web, an hour ahead of Channel 7.
***
A reader who goes by the pen name, Jose Pidal, reacted to my column last week. On Oct. 5, I wrote that it is getting more difficult each day to do business in the Philippines. Regulations have not been simplified. They have become more complex. Red tape has not been reduced. It has worsened.
The latest survey by the World Bank of 178 countries, the Philippines ranks No. 133 in ease of doing business, down 12 rungs from 121 in 2006. The country is not competitive for businessmen, local and foreign, to do business in. Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business.
Our neighbors, notably, China, India, Vietnam and even Indonesia have leapfrogged over us in making things easy for businessmen.
The World Bank says starting a business here takes 15 steps and 58 days and will cost 26.8 percent of your capital. That’s very expensive. The government takes away – in fees, licenses, and approval money, more than a quarter of your capital even before you could begin business.
Reader Pidal comments:
“I enjoyed your column on "Doing business"
In my town I go often to City Hall to deal with the multitude of things just to keep all my taxes, fees and permits and licenses up to date so I can run the business. When there, I notice more and more people sitting inside the offices with each visit.
“When I inquire, the answer is always the same. Those are the casuals, supporters of the Mayor in the last election.. And therein lies the old adage "too many cooks spoil the broth"...
“With all these people now touching and handling every single scrap of paper no wonder there is more red tape! The City Hall is duty bound to create more bureaucracy to support all the people it has to keep busy on a daily basis.”
“For weeks after the last mayoral election in our town, I had a hard time getting to my mother-in-law's home as she lived next door to the incoming mayor. There were lines of people waiting up and down the street just to get in and soak up the gravy. Some days it was impossible to even park in her driveway as it was filled with people.
I'm sure this is played out in cities and towns across our country after every election. As long as we behave this way, it will be more and more difficult to start an enterprise in this country. For many of our youth, there are really only 2 options, #1 try to get out, or #2 if you can't get out, then try for a job in our only growth industry - City Hall.”
“What can be done about this? The fact that there is so much money to be had or made one way or another by being in politics is the root cause of this. This country lags way behind
many others in fighting even the most basic corruption. Many of our politicians even lack the basic delicadezza to hide their greed. In my town all public works contracts go to the mayor's construction company, on a provincial basis the contracts go to the governor's company or get soaked up through the efforts of our governor's brother.. who is our congressman.”
“Whenever I visit the NCR and I stay there, I can always tell who is soaking up the cash by the prominent letter at the base of the streetlights. My niece visiting from the Spain once asked if the streetlights were privately owned. I told her that a certain family felt that indeed they owned the streetlights, but they used public money to build them.....as long as this goes on and on, common people will continue to be used to it as a ‘normal’ way of life and nothing will change or ever get better.”
“I appreciate your column on doing business, I just wish doing business here was getting easier!”
Email me at biznewasia@gmail.com
Where it is easy to do business
Where it is easy to do business
In my previous yesterday, I said it is getting more difficult to do business in the Philippines, primarily because of the increasing red tape and time-consuming, if not costly, procedures. If you are a business taxpayer, you have to go to the Bureau of Internal Revenue and other collection agencies 47 times in a year, to pay taxes, and spend as many as 195 hours doing so.
In the meantime, most of the world is simplifying its procedures for doing business.
In Asia, China was a standout in regulatory reform in 2006/07, according to the latest World Bank survey of doing business in 178 countries. In that survey, the Philippines ranked 133rd, down from 121 in 2006. Singapore is No. 1, where red tape has been cut to almost nil and corruption is also almost nil.
The top reformer in Asia and among the top 10 in the world, China introduced far-reaching protection of private property rights and a new bankruptcy law. Not surprisingly, China attracts $50 billion in foreign investments yearly.
Worldwide, the top 10 reformers are, in order, Egypt, Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China and Bulgaria.
Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business. Worldwide, the top 25 in the rankings are, in order, Singapore, New Zealand, United States, Hong Kong, Denmark, the United Kingdom, Canada, Ireland, Australia, Iceland, Norway, Japan, Finland, Sweden, Thailand, Switzerland, Estonia, Georgia, Belgium, Germany, the Netherlands, Latvia, Saudi Arabia, Malaysia and Austria
Asia accounts for two of the top 10, with Singapore ranking first and Hong Kong fourth. Other top-ranking economies in the region are Thailand (15), Malaysia (24), Fiji (36), Tonga (47) and Taiwan (China) (50).
Worldwide, Eastern Europe and Central Asia is the leading reformer, with three countries from the former Soviet Union—Estonia, Georgia and Latvia—all in the top 25 on the ease of doing business. South Asia, led by India, has also picked up speed in reform, outpacing East Asia and the Pacific.
Worldwide, 200 reforms in 98 economies were introduced between April 2006 and June 2007, says the World Bank.
In Asia, the most popular reform was to ease access to credit, with improvements in China, Indonesia, Micronesia and Vietnam. The second most popular was to simplify business start-up, with action in Laos, Malaysia and Timor-Leste.
“Equity returns are highest in countries that are reforming the most,” says Michael Klein, World Bank/IFC vice president for financial and private sector development.
“Investors are looking for upside potential, and they find it in economies that are reforming—regardless of their starting point,” he adds. Large emerging markets are reforming fast: China, Egypt, India, Indonesia, Turkey and Vietnam all improved on the ease of doing business.
The report also finds that as more countries simplify regulation to make it easier to do business, more entrepreneurs are going into business.
Other notable reforms in East Asia and the Pacific:
• Fiji introduced judicial reforms to improve court efficiency.
• Laos implemented border cooperation agreements that would help speed up trade and eased licensing requirements for new businesses.
• Malaysia streamlined business start-up, reduced corporate income taxes and simplified online tax filing.
• Micronesia implemented its first secured transactions law and launched a unified online registry for all security rights in movable property. The registry covers all types of creditors and debtors.
• Mongolia put in place new laws for corporate income, value-added and personal income taxes, introducing a new flat tax for individual income. It also reduced the top marginal rate for corporate income tax from 30 percent to 25 percent.
• Thailand introduced an electronic one-stop shop for traders, cutting the time to import and export by five days.
Higher rankings on the ease of doing business are associated with higher percentages of women among entrepreneurs and employees.
“The benefits of increased regulatory reform are especially large for women,” stresses Justin Yap, an author of the report. Women often face regulations that may be aimed at protecting them but that have a counterproductive effect, forcing them into the informal sector, where women have little job security and few social benefits. “These regulations can take work away from willing workers and business opportunities away from potential entrepreneurs,” he adds.
The WB rankings are based on 10 indicators of business regulation that track the time and cost to meet government requirements in business start-up, operation, trade, taxation and closure. They do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
Since 2003 Doing Business has inspired or informed more than 113 reforms around the world.
Email me at biznewsasia@gmail.com
In my previous yesterday, I said it is getting more difficult to do business in the Philippines, primarily because of the increasing red tape and time-consuming, if not costly, procedures. If you are a business taxpayer, you have to go to the Bureau of Internal Revenue and other collection agencies 47 times in a year, to pay taxes, and spend as many as 195 hours doing so.
In the meantime, most of the world is simplifying its procedures for doing business.
In Asia, China was a standout in regulatory reform in 2006/07, according to the latest World Bank survey of doing business in 178 countries. In that survey, the Philippines ranked 133rd, down from 121 in 2006. Singapore is No. 1, where red tape has been cut to almost nil and corruption is also almost nil.
The top reformer in Asia and among the top 10 in the world, China introduced far-reaching protection of private property rights and a new bankruptcy law. Not surprisingly, China attracts $50 billion in foreign investments yearly.
Worldwide, the top 10 reformers are, in order, Egypt, Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China and Bulgaria.
Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business. Worldwide, the top 25 in the rankings are, in order, Singapore, New Zealand, United States, Hong Kong, Denmark, the United Kingdom, Canada, Ireland, Australia, Iceland, Norway, Japan, Finland, Sweden, Thailand, Switzerland, Estonia, Georgia, Belgium, Germany, the Netherlands, Latvia, Saudi Arabia, Malaysia and Austria
Asia accounts for two of the top 10, with Singapore ranking first and Hong Kong fourth. Other top-ranking economies in the region are Thailand (15), Malaysia (24), Fiji (36), Tonga (47) and Taiwan (China) (50).
Worldwide, Eastern Europe and Central Asia is the leading reformer, with three countries from the former Soviet Union—Estonia, Georgia and Latvia—all in the top 25 on the ease of doing business. South Asia, led by India, has also picked up speed in reform, outpacing East Asia and the Pacific.
Worldwide, 200 reforms in 98 economies were introduced between April 2006 and June 2007, says the World Bank.
In Asia, the most popular reform was to ease access to credit, with improvements in China, Indonesia, Micronesia and Vietnam. The second most popular was to simplify business start-up, with action in Laos, Malaysia and Timor-Leste.
“Equity returns are highest in countries that are reforming the most,” says Michael Klein, World Bank/IFC vice president for financial and private sector development.
“Investors are looking for upside potential, and they find it in economies that are reforming—regardless of their starting point,” he adds. Large emerging markets are reforming fast: China, Egypt, India, Indonesia, Turkey and Vietnam all improved on the ease of doing business.
The report also finds that as more countries simplify regulation to make it easier to do business, more entrepreneurs are going into business.
Other notable reforms in East Asia and the Pacific:
• Fiji introduced judicial reforms to improve court efficiency.
• Laos implemented border cooperation agreements that would help speed up trade and eased licensing requirements for new businesses.
• Malaysia streamlined business start-up, reduced corporate income taxes and simplified online tax filing.
• Micronesia implemented its first secured transactions law and launched a unified online registry for all security rights in movable property. The registry covers all types of creditors and debtors.
• Mongolia put in place new laws for corporate income, value-added and personal income taxes, introducing a new flat tax for individual income. It also reduced the top marginal rate for corporate income tax from 30 percent to 25 percent.
• Thailand introduced an electronic one-stop shop for traders, cutting the time to import and export by five days.
Higher rankings on the ease of doing business are associated with higher percentages of women among entrepreneurs and employees.
“The benefits of increased regulatory reform are especially large for women,” stresses Justin Yap, an author of the report. Women often face regulations that may be aimed at protecting them but that have a counterproductive effect, forcing them into the informal sector, where women have little job security and few social benefits. “These regulations can take work away from willing workers and business opportunities away from potential entrepreneurs,” he adds.
The WB rankings are based on 10 indicators of business regulation that track the time and cost to meet government requirements in business start-up, operation, trade, taxation and closure. They do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
Since 2003 Doing Business has inspired or informed more than 113 reforms around the world.
Email me at biznewsasia@gmail.com
Joseph Estrada wants guilty verdict overturned
Estrada wants guilty verdict overturned
Lawyer Rene Saguisag has filed a motion for reconsideration which in effect seeks to overturn the Sandigan anti-graft court’s Sept. 12 guilty verdict against former President Joseph Estrada. Erap was found guilty of two counts of plunder and sentenced to life imprisonment. He remains at his Tanay rest house, 50 kms east of Manila.
Saguisag anchored his MR on five grounds:
One, mistrial. Estrada was deprived his constitutional right to due process and to be informed of the nature and cause of the accusation against him.
Two, he was deprived of his constitutional right to be informed when he was convicted of an offense not included in the information sheet against him filed by the Ombudsman.
Three, though not accused, other people did “amass, accumulate, or acquire” ill-gotten wealth but were not charged. That’s Chavit Singson.
Four, Estrada was deprived of his constitutional right to confront witnesses against him when hearsay evidence against him was admitted. No jueteng lord came forward to claim he gave protection money to Estrada.
Five, he was denied his constitutional right to presumption of innocence as the Sandigan court convicted him on the basis of surmises, inferences, and speculative evidence. Singson’s ledgers were unverified.
According to the 63-page MR, the Ombudsman’s “amended information” of April 18, 2001 charged him with only a single offense of plunder.
The information named Estrada, his son, Jinggoy, his lawyer Edward Serapio, gambling czar Charlie “Atong” Ang and four others of one act of plunder, for the following four acts: one, receiving P545 million in kickbacks from illegal gambling; misappropriating P130 million in tobacco taxes; three, receiving P189.7 million in commissions from the sale of Belle shares to the GSIS and SSS; and four, unjust enrichment in the amount of P3.233 billion deposited in the Jose Velarde account. Plunder is a series of acts. The prosecution must prove at least two of the acts for a single offense of plunder involving at least P50 million. Instead, the court considered each of the four acts as one offense of plunder, or a total of four offenses of plunder.
According to Saguisag, as it turns out, the prosecution needed to prove only one of the four cases and they had Estrada nailed for plunder. On the other hand, the defense needed to prove Erap innocent on all four cases because each was a plunder case by itself. So the burden of Estrada and the defense was four times heavier than that of the prosecution. That’s unfair.
On Sept. 12, the court found the ousted president guilty for two acts of plunder for the P545 million jueteng kickbacks and the so-called P189.7 million Belle commissions. He was not guilty of the two other offenses – tobacco tax and Jose Velarde.
Estrada, Saguisag contended, “never knew” that each of the (four) acts constituted an offense of plunder. The president understood that the four acts were the means for the so-called accumulation of wealth.
Saguisag and Estrada were senators when the Plunder Law was approved by the Senate. Jueteng was farthest from their mind as constituting plunder when the bill was being debated. The plunder contemplated was Marcosian, not juetengan.
First, jueteng is not taxpayers’money. It is private funds, bets placed by small people in the hope of winning a modest fortune.
Second, jueteng, disguised as lotto, is operated by the government Philippine Charity Sweepstakes Office. If lotto were plunder, then PCSO would be the biggest plunderer of them all and its officers and directors would be subject to life imprisonment. “In a society where big time gambling is sponsored by the government”, jueteng may be graft, but not plunder, says Saguisag.
Third, there was no proof Estrada tolerated illegal gambling. Without toleration or protection, argues Saguisag, “the crime of plunder could not be committed”. In fact, Erap wanted to legalize jueteng by replacing it with the Bingo2 Balls. Legalizing jueteng was the subject of Estrada’s very first privilege speech at the Senate.
Fourth, jueteng can be undertaken by a private individual or a government official. Estrada doesn’t need to be a government official to be engaged in jueteng. The prosecution never alleged that Estrada’s jueteng protection was “by reason of his public office”. This failure to allege, Saguisag contends, “precluded conviction for plunder”. Toleration or protection of illegal gambling “does not show that public office was an essential element to the crime of receiving jueteng money since other persons, whether in the public or private sector, could tolerate or protect illegal gambling.”
Finally, Saguisag laments that the Sandigan gave credence to Chavit Singson’s ledgers or listahan when the court itself did not give credence to his testimony on the tobacco tax case. The entries in the ledgers were not properly verified and therefore, were hearsay.
Email me at biznewsasia@gmail.com
Lawyer Rene Saguisag has filed a motion for reconsideration which in effect seeks to overturn the Sandigan anti-graft court’s Sept. 12 guilty verdict against former President Joseph Estrada. Erap was found guilty of two counts of plunder and sentenced to life imprisonment. He remains at his Tanay rest house, 50 kms east of Manila.
Saguisag anchored his MR on five grounds:
One, mistrial. Estrada was deprived his constitutional right to due process and to be informed of the nature and cause of the accusation against him.
Two, he was deprived of his constitutional right to be informed when he was convicted of an offense not included in the information sheet against him filed by the Ombudsman.
Three, though not accused, other people did “amass, accumulate, or acquire” ill-gotten wealth but were not charged. That’s Chavit Singson.
Four, Estrada was deprived of his constitutional right to confront witnesses against him when hearsay evidence against him was admitted. No jueteng lord came forward to claim he gave protection money to Estrada.
Five, he was denied his constitutional right to presumption of innocence as the Sandigan court convicted him on the basis of surmises, inferences, and speculative evidence. Singson’s ledgers were unverified.
According to the 63-page MR, the Ombudsman’s “amended information” of April 18, 2001 charged him with only a single offense of plunder.
The information named Estrada, his son, Jinggoy, his lawyer Edward Serapio, gambling czar Charlie “Atong” Ang and four others of one act of plunder, for the following four acts: one, receiving P545 million in kickbacks from illegal gambling; misappropriating P130 million in tobacco taxes; three, receiving P189.7 million in commissions from the sale of Belle shares to the GSIS and SSS; and four, unjust enrichment in the amount of P3.233 billion deposited in the Jose Velarde account. Plunder is a series of acts. The prosecution must prove at least two of the acts for a single offense of plunder involving at least P50 million. Instead, the court considered each of the four acts as one offense of plunder, or a total of four offenses of plunder.
According to Saguisag, as it turns out, the prosecution needed to prove only one of the four cases and they had Estrada nailed for plunder. On the other hand, the defense needed to prove Erap innocent on all four cases because each was a plunder case by itself. So the burden of Estrada and the defense was four times heavier than that of the prosecution. That’s unfair.
On Sept. 12, the court found the ousted president guilty for two acts of plunder for the P545 million jueteng kickbacks and the so-called P189.7 million Belle commissions. He was not guilty of the two other offenses – tobacco tax and Jose Velarde.
Estrada, Saguisag contended, “never knew” that each of the (four) acts constituted an offense of plunder. The president understood that the four acts were the means for the so-called accumulation of wealth.
Saguisag and Estrada were senators when the Plunder Law was approved by the Senate. Jueteng was farthest from their mind as constituting plunder when the bill was being debated. The plunder contemplated was Marcosian, not juetengan.
First, jueteng is not taxpayers’money. It is private funds, bets placed by small people in the hope of winning a modest fortune.
Second, jueteng, disguised as lotto, is operated by the government Philippine Charity Sweepstakes Office. If lotto were plunder, then PCSO would be the biggest plunderer of them all and its officers and directors would be subject to life imprisonment. “In a society where big time gambling is sponsored by the government”, jueteng may be graft, but not plunder, says Saguisag.
Third, there was no proof Estrada tolerated illegal gambling. Without toleration or protection, argues Saguisag, “the crime of plunder could not be committed”. In fact, Erap wanted to legalize jueteng by replacing it with the Bingo2 Balls. Legalizing jueteng was the subject of Estrada’s very first privilege speech at the Senate.
Fourth, jueteng can be undertaken by a private individual or a government official. Estrada doesn’t need to be a government official to be engaged in jueteng. The prosecution never alleged that Estrada’s jueteng protection was “by reason of his public office”. This failure to allege, Saguisag contends, “precluded conviction for plunder”. Toleration or protection of illegal gambling “does not show that public office was an essential element to the crime of receiving jueteng money since other persons, whether in the public or private sector, could tolerate or protect illegal gambling.”
Finally, Saguisag laments that the Sandigan gave credence to Chavit Singson’s ledgers or listahan when the court itself did not give credence to his testimony on the tobacco tax case. The entries in the ledgers were not properly verified and therefore, were hearsay.
Email me at biznewsasia@gmail.com
Getting more difficult to do business in the Philippines
Getting more difficult to to do business in the Philippines
It is getting more difficult each day to do business in the Philippines. Regulations have not been simplified. On the contrary, they have become more complex.
Red tape has not been reduced. On the contrary, bureaucratic procedures remain cumbersome to comply with—and expensive.
If you think we are lying, ask the World Bank. Or try to open up a business in the Philippines.
Starting a business takes 15 steps and 58 days and will cost you 26.8 percent of your capital. That’s very expensive if the government takes away more than a quarter of your capital even before you could begin doing business.
In the 2007 survey of the World Bank, it took only 11 steps and 48 days to start a business and 18.7 percent of your capital.
Happily, there have been some improvements.
Dealing with licenses now takes just 21 steps, down from 23; and 177 days, down by 20 days from 197.
If the Bureau of Internal Revenue does not keep its collection targets, blame red tape.
Businesses must pay the BIR 47 times a year. That’s an improvement from 59 times but it now takes twice as much of your time to make payments—195 hours vs. 95 hours before.
The tax rate is horrrendous—52.8 percent of your profit. The government makes more money than you do, from your own business. No wonder a number of Makati businessmen hate the Gloria Arroyo administration and want to overthrow her.
Exporters, though, should be happier now. It takes only 17 days to make a shipment. It used to be 18 days. That was a colossal improvement of—one day.
But the government made sure you do additional paperwork. Export documents needed now —eight. It used to be six. Export cost per container is $800, down a magnificent 40 percent from $1,336, which is one of the highest in the world. Blame the Bureau of Customs.
You want to import machinery and raw materials? Well, that will take you eight documents, 18 days and $800 for each container. It used to be seven documents, 20 days, and $1,336.
In the World Bank’s “Doing Business 2008” published late September, the Philippines ranked No. 133 among 178 countries surveyed.
That’s a decline from its 2007 ranking of No. 126, which was a drop from its 2006 ranking of 121. In two years, the Philippines has fallen by 12 rungs. It is getting more difficult each year to do business in the country.
That is a stark contrast with the Philippines’ neighbors and competitors in Asia, which simply keep improving as a place for doing business.
The World Bank study has singled out China, India, Indonesia and Vietnam as among fast reformers to make their countries more hospitable for business. These countries simplified regulation to make it easier to do business.
As they do the reforms, businessmen take notice and come in. Hence, more entrepreneurs are going into business.
China’s new property law put private property rights on equal footing with state property rights, reports the bank.
The law also expanded the range of assets that can be used as collateral to include inventory and accounts receivable. The new bankruptcy law gives secured creditors priority to the proceeds from their collateral. Construction also became easier, with electronic processing of building permits reducing delays by two weeks.
Runner-up reformer in Asia is Indonesia. It simplified the process for getting construction permits, cutting delays from 49 days to 21. It also expanded the coverage of loans by the public credit registry and strengthened investor protections by increasing disclosure requirements.
Vietnam made it easier for businesses to access credit by allowing general description of assets and obligations in collateral agreements as well as the use of future assets to secure debt. It adopted a new securities law that establishes a securities exchange and trading center. And it strengthened investor protection through a new enterprise law. The law requires that investors be involved in major company actions, increases disclosure for related-party transactions, and introduces fiduciary duties for company directors.
Here is what the World Bank says about the doing business scenario for 2008:
East Asia and the Pacific ranks second-to-last among regions on the pace of business reform, according to Doing Business 2008—the fifth in an annual report series issued by the World Bank and IFC.
China was a standout in regulatory reform in 2006/07, bucking the regional trend. The top reformer in the region and among the top 10 in the world, China introduced far-reaching protection of private property rights and a new bankruptcy law.
Worldwide, the top 10 reformers are, in order, Egypt, Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China and Bulgaria.
Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business.
Eastern Europe and Central Asia is the leading reformer among regions, with three countries from the former Soviet Union—Estonia, Georgia and Latvia—all in the top 25 on the ease of doing business. South Asia, led by India, has also picked up speed in reform, outpacing East Asia and the Pacific.
Worldwide, 200 reforms in 98 economies were introduced between April 2006 and June 2007.
In East Asia and the Pacific the most popular reform was to ease access to credit, with improvements in China, Indonesia, Micronesia and Vietnam. The second most popular was to simplify business start-up, with action in the Lao People’s Democratic Republic, Malaysia and Timor-Leste.
The report finds that equity returns are highest in countries that are reforming the most,” says Michael Klein, World Bank/IFC vice president for financial and private sector development.
“Investors are looking for upside potential, and they find it in economies that are reforming—regardless of their starting point,” he adds. Large emerging markets are reforming fast: China, Egypt, India, Indonesia, Turkey and Vietnam all improved on the ease of doing business.
The report also finds that as more countries simplify regulation to make it easier to do business, more entrepreneurs are going into business.
Other notable reforms in East Asia and the Pacific:
• Fiji introduced judicial reforms to improve court efficiency.
• Lao PDR implemented border cooperation agreements that would help speed up trade and eased licensing requirements for new businesses.
• Malaysia streamlined business start-up, reduced corporate income taxes and simplified online tax filing.
• Micronesia implemented its first secured transactions law and launched a unified online registry for all security rights in movable property. The registry covers all types of creditors and debtors.
• Mongolia put in place new laws for corporate income, value-added and personal income taxes, introducing a new flat tax for individual income. It also reduced the top marginal rate for corporate income tax from 30 percent to 25 percent.
• Thailand introduced an electronic one-stop shop for traders, cutting the time to import and export by five days.
Worldwide, the report finds that higher rankings on the ease of doing business are associated with higher percentages of women among entrepreneurs and employees.
“The benefits of increased regulatory reform are especially large for women,” stresses Justin Yap, an author of the report. Women often face regulations that may be aimed at protecting them but that have a counterproductive effect, forcing them into the informal sector, where women have little job security and few social benefits. “These regulations can take work away from willing workers and business opportunities away from potential entrepreneurs,” he adds.
Doing Business 2008 ranks 178 economies on the ease of doing business. East Asia and the Pacific accounts for two of the top 10, with Singapore ranking first and Hong Kong fourth. Other top-ranking economies in the region are Thailand (15), Malaysia (24), Fiji (36), Tonga (47) and Taiwan (China) (50).
Worldwide rankings
Worldwide, the top 25 in the rankings are, in order, Singapore, New Zealand, United States, Hong Kong, Denmark, the United Kingdom, Canada, Ireland, Australia, Iceland, Norway, Japan, Finland, Sweden, Thailand, Switzerland, Estonia, Georgia, Belgium, Germany, the Netherlands, Latvia, Saudi Arabia, Malaysia and Austria.
The rankings are based on 10 indicators of business regulation that track the time and cost to meet government requirements in business start-up, operation, trade, taxation and closure. They do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. Since 2003 Doing Business has inspired or informed more than 113 reforms around the world.
Thirteen countries saw new governments sworn in. Earlier analysis suggested that the region might experience a reform boom next year, as nearly 85 percent of reforms take place in the first 15 months of a new government.
Egypt is the top reformer for 2006/07, improving in five of the 10 areas studied by Doing Business. Egypt’s reforms went deep. They made starting a business easier, slashing the minimum capital requirement from 50,000 Egyptian pounds to 1,000 and halving start-up time and cost.
With more properties registered and less evasion, revenue from title registrations jumped by 39 percent in the six months after the reform. New one-stop shops were launched for traders at the ports, cutting the time to import by seven days and the time to export by five. The first private credit bureau was established. Builders now face less bureaucracy in getting construction permits.
Croatia is the runner-up, with reforms in four of the Doing Business areas. Two years ago registering a property in Croatia took 956 days. Now it takes 174. Croatia also sped company start-up, consolidating procedures at the one-stop shop and allowing pension and health services registration online. Two procedures and five days were cut from the process. Credit became easier to access: a new credit bureau got of the ground, and a unified registry now records all charges against movable property in one place.
Large emerging economies—fast reformers China, Egypt, India, Indonesia, Turkey and Vietnam all improved in the ease of doing business.
In China a new property law put private property rights on equal footing with state property rights. The law also expanded the range of assets that can be used as collateral to include inventory and accounts receivable.
China also passed a new bankruptcy law, which gives secured creditors priority to the proceeds from their collateral. Construction became easier, with electronic processing of building permits reducing delays by two weeks.
India rivaled this pace of reform. Traders can now submit customs declarations and pay customs fees online before the cargo arrives in port. It takes 18 days to meet all the administrative requirements to export—in 2006 it took 27. The credit bureau expanded to include payment histories on businesses as well as individuals.
Russia’s first credit bureau started up in 2006 and by July 2007 had extended its coverage to more than six million people. Before, banks had no central database to tap when judging a client’s creditworthiness. Now they can turn to the new bureau for data on both individuals and firms—and for positive as well as negative information (for example, on payment history and number and frequency of late payments).
Some countries slipped backward. Venezuela had the largest negative reforms. Doing business there was already hard. In 2006/07 it got harder. Exporters now need a separate license for each transaction.
Singapore is No. 1 again. For the second year running, Singapore tops the rankings on the ease of doing business. New Zealand, United States and Hong Kong follow close behind. Denmark is next, demonstrating that countries can be business friendly and provide strong social protection.
Georgia and Saudi Arabia entered the top 25. Many countries with the most business-friendly regulations continued to reform, such as Australia, Denmark, the Netherlands, Norway and Switzerland. Some stopped—and slipped in the rankings. The message: if you are not reforming, another country will overtake you. Some 200 reforms made business easier—27 made it more difficult.
Caveat
Rankings on the ease of doing business do not tell the whole story. The indicator is limited in scope: it covers only business regulations. It does not account for a country’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions.
Still, a high ranking on the ease of doing business does mean that the government has created a regulatory environment conducive to operating a business. Opportunities for women payoffs from reform can be large. Higher rankings on the ease of doing business are associated with more growth, more jobs and a smaller share of the economy in the informal sector.
The benefits are especially large for women. Countries with higher scores on the ease of doing business have larger shares of women in the ranks of both entrepreneurs and workers. When reformers simplified business start-up, business registrations shot up. The increase in first-time business owners was 33 percent higher for women than men.
In some countries explicit discrimination in laws compounds the effects of complex regulations. Women in the United Arab Emirates and Yemen are forbidden to work at night. In the Democratic Republic of Congo they need their husband’s consent to start a business. Women run only 18 percent of the small businesses there. In neighboring Rwanda, which has no such regulations, women run more than 41 percent of small businesses.
Some countries are taking action. Lesotho passed a law in November 2006 allowing married women to own and transfer property and engage in legal acts without their husband’s signature. Before the reform the law classified women as legal minors.
What gets measured gets done. Publishing comparative data on the ease of doing business inspires governments to reform. Since its start in October 2003 the Doing Business project has inspired or informed 113 reforms around the world. In 2006 Georgia targeted the top 25 list and used Doing Business indicators as benchmarks of its progress. It now ranks 18 on the ease of doing business, and the government has set an even more ambitious goal. Saudi Arabia and Mauritius have targeted the top 10. Both have made tremendous progress: Saudi Arabia now ranks 23, and Mauritius 27.
Mozambique is reforming several aspects of its business environment, with the goal of reaching the top rank on the ease of doing business in southern Africa. The result: it rose by six places in the rankings.
Comparisons among cities within a country are even stronger drivers of reform. The time to obtain a business license in India ranges from 159 days in Bhubaneshwar to 522 in Ranchi. The time to register property, from 35 days in Hyderabad to 155 in Calcutta. A hypothetical Indian city with the country’s top performance in each of the Doing Business indicators would rank 55 places higher on the ease of doing business than Mumbai. The Indian government is taking action. This year India is the top reformer in trading across borders.
Reforms go beyond the fixes that improve the Doing Business rankings. When the Philippines issued a decree to lower administrative fees, it covered all types of licenses and permits, not just those measured in Doing Business. In Malawi and Rwanda reformers are using the indicators to encourage simplification across all government agencies. Kenya is reforming all business licenses.
To help reformers, this year the Doing Business project published a book of 11 case studies of successful reforms. These span the globe—from El Salvador to Serbia, from Egypt to Nigeria—and show what it takes to succeed. In cooperation with the US Agency for International Development, Doing Business also created a prize to recognize leading reformers. The first one went to Zurab Nogaideli, the prime minister of Georgia. Since then, several reformist governments—such as those in Azerbaijan, Guatemala and Mozambique—have studied the Georgian reform experience for ideas on how to reform.
Email biznewsasia@gmail.com
It is getting more difficult each day to do business in the Philippines. Regulations have not been simplified. On the contrary, they have become more complex.
Red tape has not been reduced. On the contrary, bureaucratic procedures remain cumbersome to comply with—and expensive.
If you think we are lying, ask the World Bank. Or try to open up a business in the Philippines.
Starting a business takes 15 steps and 58 days and will cost you 26.8 percent of your capital. That’s very expensive if the government takes away more than a quarter of your capital even before you could begin doing business.
In the 2007 survey of the World Bank, it took only 11 steps and 48 days to start a business and 18.7 percent of your capital.
Happily, there have been some improvements.
Dealing with licenses now takes just 21 steps, down from 23; and 177 days, down by 20 days from 197.
If the Bureau of Internal Revenue does not keep its collection targets, blame red tape.
Businesses must pay the BIR 47 times a year. That’s an improvement from 59 times but it now takes twice as much of your time to make payments—195 hours vs. 95 hours before.
The tax rate is horrrendous—52.8 percent of your profit. The government makes more money than you do, from your own business. No wonder a number of Makati businessmen hate the Gloria Arroyo administration and want to overthrow her.
Exporters, though, should be happier now. It takes only 17 days to make a shipment. It used to be 18 days. That was a colossal improvement of—one day.
But the government made sure you do additional paperwork. Export documents needed now —eight. It used to be six. Export cost per container is $800, down a magnificent 40 percent from $1,336, which is one of the highest in the world. Blame the Bureau of Customs.
You want to import machinery and raw materials? Well, that will take you eight documents, 18 days and $800 for each container. It used to be seven documents, 20 days, and $1,336.
In the World Bank’s “Doing Business 2008” published late September, the Philippines ranked No. 133 among 178 countries surveyed.
That’s a decline from its 2007 ranking of No. 126, which was a drop from its 2006 ranking of 121. In two years, the Philippines has fallen by 12 rungs. It is getting more difficult each year to do business in the country.
That is a stark contrast with the Philippines’ neighbors and competitors in Asia, which simply keep improving as a place for doing business.
The World Bank study has singled out China, India, Indonesia and Vietnam as among fast reformers to make their countries more hospitable for business. These countries simplified regulation to make it easier to do business.
As they do the reforms, businessmen take notice and come in. Hence, more entrepreneurs are going into business.
China’s new property law put private property rights on equal footing with state property rights, reports the bank.
The law also expanded the range of assets that can be used as collateral to include inventory and accounts receivable. The new bankruptcy law gives secured creditors priority to the proceeds from their collateral. Construction also became easier, with electronic processing of building permits reducing delays by two weeks.
Runner-up reformer in Asia is Indonesia. It simplified the process for getting construction permits, cutting delays from 49 days to 21. It also expanded the coverage of loans by the public credit registry and strengthened investor protections by increasing disclosure requirements.
Vietnam made it easier for businesses to access credit by allowing general description of assets and obligations in collateral agreements as well as the use of future assets to secure debt. It adopted a new securities law that establishes a securities exchange and trading center. And it strengthened investor protection through a new enterprise law. The law requires that investors be involved in major company actions, increases disclosure for related-party transactions, and introduces fiduciary duties for company directors.
Here is what the World Bank says about the doing business scenario for 2008:
East Asia and the Pacific ranks second-to-last among regions on the pace of business reform, according to Doing Business 2008—the fifth in an annual report series issued by the World Bank and IFC.
China was a standout in regulatory reform in 2006/07, bucking the regional trend. The top reformer in the region and among the top 10 in the world, China introduced far-reaching protection of private property rights and a new bankruptcy law.
Worldwide, the top 10 reformers are, in order, Egypt, Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China and Bulgaria.
Singapore, for the second year running, tops the aggregate rankings of 178 economies on the ease of doing business.
Eastern Europe and Central Asia is the leading reformer among regions, with three countries from the former Soviet Union—Estonia, Georgia and Latvia—all in the top 25 on the ease of doing business. South Asia, led by India, has also picked up speed in reform, outpacing East Asia and the Pacific.
Worldwide, 200 reforms in 98 economies were introduced between April 2006 and June 2007.
In East Asia and the Pacific the most popular reform was to ease access to credit, with improvements in China, Indonesia, Micronesia and Vietnam. The second most popular was to simplify business start-up, with action in the Lao People’s Democratic Republic, Malaysia and Timor-Leste.
The report finds that equity returns are highest in countries that are reforming the most,” says Michael Klein, World Bank/IFC vice president for financial and private sector development.
“Investors are looking for upside potential, and they find it in economies that are reforming—regardless of their starting point,” he adds. Large emerging markets are reforming fast: China, Egypt, India, Indonesia, Turkey and Vietnam all improved on the ease of doing business.
The report also finds that as more countries simplify regulation to make it easier to do business, more entrepreneurs are going into business.
Other notable reforms in East Asia and the Pacific:
• Fiji introduced judicial reforms to improve court efficiency.
• Lao PDR implemented border cooperation agreements that would help speed up trade and eased licensing requirements for new businesses.
• Malaysia streamlined business start-up, reduced corporate income taxes and simplified online tax filing.
• Micronesia implemented its first secured transactions law and launched a unified online registry for all security rights in movable property. The registry covers all types of creditors and debtors.
• Mongolia put in place new laws for corporate income, value-added and personal income taxes, introducing a new flat tax for individual income. It also reduced the top marginal rate for corporate income tax from 30 percent to 25 percent.
• Thailand introduced an electronic one-stop shop for traders, cutting the time to import and export by five days.
Worldwide, the report finds that higher rankings on the ease of doing business are associated with higher percentages of women among entrepreneurs and employees.
“The benefits of increased regulatory reform are especially large for women,” stresses Justin Yap, an author of the report. Women often face regulations that may be aimed at protecting them but that have a counterproductive effect, forcing them into the informal sector, where women have little job security and few social benefits. “These regulations can take work away from willing workers and business opportunities away from potential entrepreneurs,” he adds.
Doing Business 2008 ranks 178 economies on the ease of doing business. East Asia and the Pacific accounts for two of the top 10, with Singapore ranking first and Hong Kong fourth. Other top-ranking economies in the region are Thailand (15), Malaysia (24), Fiji (36), Tonga (47) and Taiwan (China) (50).
Worldwide rankings
Worldwide, the top 25 in the rankings are, in order, Singapore, New Zealand, United States, Hong Kong, Denmark, the United Kingdom, Canada, Ireland, Australia, Iceland, Norway, Japan, Finland, Sweden, Thailand, Switzerland, Estonia, Georgia, Belgium, Germany, the Netherlands, Latvia, Saudi Arabia, Malaysia and Austria.
The rankings are based on 10 indicators of business regulation that track the time and cost to meet government requirements in business start-up, operation, trade, taxation and closure. They do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. Since 2003 Doing Business has inspired or informed more than 113 reforms around the world.
Thirteen countries saw new governments sworn in. Earlier analysis suggested that the region might experience a reform boom next year, as nearly 85 percent of reforms take place in the first 15 months of a new government.
Egypt is the top reformer for 2006/07, improving in five of the 10 areas studied by Doing Business. Egypt’s reforms went deep. They made starting a business easier, slashing the minimum capital requirement from 50,000 Egyptian pounds to 1,000 and halving start-up time and cost.
With more properties registered and less evasion, revenue from title registrations jumped by 39 percent in the six months after the reform. New one-stop shops were launched for traders at the ports, cutting the time to import by seven days and the time to export by five. The first private credit bureau was established. Builders now face less bureaucracy in getting construction permits.
Croatia is the runner-up, with reforms in four of the Doing Business areas. Two years ago registering a property in Croatia took 956 days. Now it takes 174. Croatia also sped company start-up, consolidating procedures at the one-stop shop and allowing pension and health services registration online. Two procedures and five days were cut from the process. Credit became easier to access: a new credit bureau got of the ground, and a unified registry now records all charges against movable property in one place.
Large emerging economies—fast reformers China, Egypt, India, Indonesia, Turkey and Vietnam all improved in the ease of doing business.
In China a new property law put private property rights on equal footing with state property rights. The law also expanded the range of assets that can be used as collateral to include inventory and accounts receivable.
China also passed a new bankruptcy law, which gives secured creditors priority to the proceeds from their collateral. Construction became easier, with electronic processing of building permits reducing delays by two weeks.
India rivaled this pace of reform. Traders can now submit customs declarations and pay customs fees online before the cargo arrives in port. It takes 18 days to meet all the administrative requirements to export—in 2006 it took 27. The credit bureau expanded to include payment histories on businesses as well as individuals.
Russia’s first credit bureau started up in 2006 and by July 2007 had extended its coverage to more than six million people. Before, banks had no central database to tap when judging a client’s creditworthiness. Now they can turn to the new bureau for data on both individuals and firms—and for positive as well as negative information (for example, on payment history and number and frequency of late payments).
Some countries slipped backward. Venezuela had the largest negative reforms. Doing business there was already hard. In 2006/07 it got harder. Exporters now need a separate license for each transaction.
Singapore is No. 1 again. For the second year running, Singapore tops the rankings on the ease of doing business. New Zealand, United States and Hong Kong follow close behind. Denmark is next, demonstrating that countries can be business friendly and provide strong social protection.
Georgia and Saudi Arabia entered the top 25. Many countries with the most business-friendly regulations continued to reform, such as Australia, Denmark, the Netherlands, Norway and Switzerland. Some stopped—and slipped in the rankings. The message: if you are not reforming, another country will overtake you. Some 200 reforms made business easier—27 made it more difficult.
Caveat
Rankings on the ease of doing business do not tell the whole story. The indicator is limited in scope: it covers only business regulations. It does not account for a country’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions.
Still, a high ranking on the ease of doing business does mean that the government has created a regulatory environment conducive to operating a business. Opportunities for women payoffs from reform can be large. Higher rankings on the ease of doing business are associated with more growth, more jobs and a smaller share of the economy in the informal sector.
The benefits are especially large for women. Countries with higher scores on the ease of doing business have larger shares of women in the ranks of both entrepreneurs and workers. When reformers simplified business start-up, business registrations shot up. The increase in first-time business owners was 33 percent higher for women than men.
In some countries explicit discrimination in laws compounds the effects of complex regulations. Women in the United Arab Emirates and Yemen are forbidden to work at night. In the Democratic Republic of Congo they need their husband’s consent to start a business. Women run only 18 percent of the small businesses there. In neighboring Rwanda, which has no such regulations, women run more than 41 percent of small businesses.
Some countries are taking action. Lesotho passed a law in November 2006 allowing married women to own and transfer property and engage in legal acts without their husband’s signature. Before the reform the law classified women as legal minors.
What gets measured gets done. Publishing comparative data on the ease of doing business inspires governments to reform. Since its start in October 2003 the Doing Business project has inspired or informed 113 reforms around the world. In 2006 Georgia targeted the top 25 list and used Doing Business indicators as benchmarks of its progress. It now ranks 18 on the ease of doing business, and the government has set an even more ambitious goal. Saudi Arabia and Mauritius have targeted the top 10. Both have made tremendous progress: Saudi Arabia now ranks 23, and Mauritius 27.
Mozambique is reforming several aspects of its business environment, with the goal of reaching the top rank on the ease of doing business in southern Africa. The result: it rose by six places in the rankings.
Comparisons among cities within a country are even stronger drivers of reform. The time to obtain a business license in India ranges from 159 days in Bhubaneshwar to 522 in Ranchi. The time to register property, from 35 days in Hyderabad to 155 in Calcutta. A hypothetical Indian city with the country’s top performance in each of the Doing Business indicators would rank 55 places higher on the ease of doing business than Mumbai. The Indian government is taking action. This year India is the top reformer in trading across borders.
Reforms go beyond the fixes that improve the Doing Business rankings. When the Philippines issued a decree to lower administrative fees, it covered all types of licenses and permits, not just those measured in Doing Business. In Malawi and Rwanda reformers are using the indicators to encourage simplification across all government agencies. Kenya is reforming all business licenses.
To help reformers, this year the Doing Business project published a book of 11 case studies of successful reforms. These span the globe—from El Salvador to Serbia, from Egypt to Nigeria—and show what it takes to succeed. In cooperation with the US Agency for International Development, Doing Business also created a prize to recognize leading reformers. The first one went to Zurab Nogaideli, the prime minister of Georgia. Since then, several reformist governments—such as those in Azerbaijan, Guatemala and Mozambique—have studied the Georgian reform experience for ideas on how to reform.
Email biznewsasia@gmail.com
Junk JPEPA, love our OFWs
Junk JPEPA, love our OFWs
An assault on the Constitution.
That is how three prominent lawyer have described the Japan-Philippines Economic Partnership Agreement. The lawyers are Justice Florentino Feliciano, former University of the Philippines law dean Merlin Magalona, and former senator Wigberto Tañada. I listened to the three Monday morning make their presentation before the two Senate committees conducting hearings on the proposed treaty –Foreign Relations chaired by Miriam Defensor Santiago and Trade and Commerce chaired by Mar Roxas.
I see no compelling nor cogent reason why the Senate should ratify JPEPA, now and in the future. JPEPA is simply a bad deal. It will enable the Japanese to dump waste in the Philippines and yet treat Filipino nurses as temporary workers even after they have learned to speak – and write – in Japanese, fluently. It runs roughshod of the Constitution. Every Filipino who loves himself, loves his people and loves his country should raise his fist in protest against this treaty.
After five hearings, Senator Santiago says JPEPA is dead and Mar Roxas says the government side, represented Monday by three cabinet members, Peter Favila of Trade, Arthur Yap of Agriculture, and Francisco Duque of Health, has yet to win a round. Speaking mostly extemporaneously, Justice Undersecretary Manuel Teehankee made a rather lame defense of the constitutional aspects of JPEPA. A bar topnotcher, he even tended to take the side of lawyer Feliciano.
Peter Favila, who of late has become detached from media (he doesn’t answer nor return your phone calls) and even from his industry sector (he didn’t bother to attend the August opening of the Chamber of Automotive Manufacturers, Inc.’s first ever international auto show, which was a rousing success) has failed miserably in selling JPEPA to the public.
Feliciano, who is in Washington DC and who Miriam described as genius, presented the best paper at Monday’s Senate hearing. His memo was read for him by lawyer Roberto San Juan. Feliciano anchored his objections to JPEPA on its two major provisions – Article 89 (national treatment) and Article 93 (prohibition of performance requirements).
Article 89 treats the Japanese and their companies like Filipinos “with respect to the establishment, acquisition, expansion, management, operation, maintenance, use, possession, liquidation, sale or other disposition of investments”.
What can Filipinos do in the Philippines? Filipinos can own land, own at least 60 percent of public utilities, franchises, and companies engaged in water, minerals, coal, petroleum, energy, fisheries, forestry, timber, wildlife, flora and fauna, and marine resources in the country’s territory, including its archipelagic waters and exclusive economic zone; own at least 100 percent retail, schools and media, and engage in the professions. These rights are given the Japanese under JPEPA.
Under Article 93, you cannot impose any condition on the Japanese before they could invest in the Philippines. Such conditions include a minimum level or value of export (if the Japanese register with the Board of Investments as exporter and then say later they don’t want to export anything, you can’t do anything about it), minimum local content (thus, Japanese cars can come in completely built-up, without local content and without paying any tariff), and requiring them to -- give preference to your products, peg the volume or value of their imports to the amount of their investments, employ Filipinos as executives, managers, or as directors; employ a minimum number of Filipinos; transfer their technology or process even if that is ordered by a court or an unfair trade body; locate their plant or headquarters in the Philippines, conduct R and D, and make Philippine companies their suppliers.
In addition, in the future, we cannot put restrictions on the Japanese on what businesses and areas they will engage in, unless we identify those areas now or say we restrict them now.
For all that bullshit, what do we get? Japanese money. How much? We exported $7.9 billion to Japan in 2006. Our exports grow by no more than nine percent per year. The Japanese brought in $401 million in foreign direct investments (FDI) last year. Japanese FDI has been declining in the past three years.
How much do ALL foreign investors bring to the Philippines yearly? Not more than $2.5 billion a year. How much is FDI growth per year? FDI has been declining since 1998.
How much did Filipino workers remit to the Philippines in 2006? $12.7 billion. Annual growth rate: at least ten percent per year. OFW earnings have doubled in the past five years.
The conclusion is obvious: Junk JPEPA. Don’t pay much attention to foreign investors, Japanese or whatever. But take care of our OFWs. Yearly, they bring in more money than all investors –Filipinos and foreign – combined.
President Arroyo was right after all. Given the choice whether she would allow the beheading a kidnapped OFW in the Middle East and being in the good graces of George Bush, she chose the former. Good call, Ma’am.
biznewsasia@gmail.com
An assault on the Constitution.
That is how three prominent lawyer have described the Japan-Philippines Economic Partnership Agreement. The lawyers are Justice Florentino Feliciano, former University of the Philippines law dean Merlin Magalona, and former senator Wigberto Tañada. I listened to the three Monday morning make their presentation before the two Senate committees conducting hearings on the proposed treaty –Foreign Relations chaired by Miriam Defensor Santiago and Trade and Commerce chaired by Mar Roxas.
I see no compelling nor cogent reason why the Senate should ratify JPEPA, now and in the future. JPEPA is simply a bad deal. It will enable the Japanese to dump waste in the Philippines and yet treat Filipino nurses as temporary workers even after they have learned to speak – and write – in Japanese, fluently. It runs roughshod of the Constitution. Every Filipino who loves himself, loves his people and loves his country should raise his fist in protest against this treaty.
After five hearings, Senator Santiago says JPEPA is dead and Mar Roxas says the government side, represented Monday by three cabinet members, Peter Favila of Trade, Arthur Yap of Agriculture, and Francisco Duque of Health, has yet to win a round. Speaking mostly extemporaneously, Justice Undersecretary Manuel Teehankee made a rather lame defense of the constitutional aspects of JPEPA. A bar topnotcher, he even tended to take the side of lawyer Feliciano.
Peter Favila, who of late has become detached from media (he doesn’t answer nor return your phone calls) and even from his industry sector (he didn’t bother to attend the August opening of the Chamber of Automotive Manufacturers, Inc.’s first ever international auto show, which was a rousing success) has failed miserably in selling JPEPA to the public.
Feliciano, who is in Washington DC and who Miriam described as genius, presented the best paper at Monday’s Senate hearing. His memo was read for him by lawyer Roberto San Juan. Feliciano anchored his objections to JPEPA on its two major provisions – Article 89 (national treatment) and Article 93 (prohibition of performance requirements).
Article 89 treats the Japanese and their companies like Filipinos “with respect to the establishment, acquisition, expansion, management, operation, maintenance, use, possession, liquidation, sale or other disposition of investments”.
What can Filipinos do in the Philippines? Filipinos can own land, own at least 60 percent of public utilities, franchises, and companies engaged in water, minerals, coal, petroleum, energy, fisheries, forestry, timber, wildlife, flora and fauna, and marine resources in the country’s territory, including its archipelagic waters and exclusive economic zone; own at least 100 percent retail, schools and media, and engage in the professions. These rights are given the Japanese under JPEPA.
Under Article 93, you cannot impose any condition on the Japanese before they could invest in the Philippines. Such conditions include a minimum level or value of export (if the Japanese register with the Board of Investments as exporter and then say later they don’t want to export anything, you can’t do anything about it), minimum local content (thus, Japanese cars can come in completely built-up, without local content and without paying any tariff), and requiring them to -- give preference to your products, peg the volume or value of their imports to the amount of their investments, employ Filipinos as executives, managers, or as directors; employ a minimum number of Filipinos; transfer their technology or process even if that is ordered by a court or an unfair trade body; locate their plant or headquarters in the Philippines, conduct R and D, and make Philippine companies their suppliers.
In addition, in the future, we cannot put restrictions on the Japanese on what businesses and areas they will engage in, unless we identify those areas now or say we restrict them now.
For all that bullshit, what do we get? Japanese money. How much? We exported $7.9 billion to Japan in 2006. Our exports grow by no more than nine percent per year. The Japanese brought in $401 million in foreign direct investments (FDI) last year. Japanese FDI has been declining in the past three years.
How much do ALL foreign investors bring to the Philippines yearly? Not more than $2.5 billion a year. How much is FDI growth per year? FDI has been declining since 1998.
How much did Filipino workers remit to the Philippines in 2006? $12.7 billion. Annual growth rate: at least ten percent per year. OFW earnings have doubled in the past five years.
The conclusion is obvious: Junk JPEPA. Don’t pay much attention to foreign investors, Japanese or whatever. But take care of our OFWs. Yearly, they bring in more money than all investors –Filipinos and foreign – combined.
President Arroyo was right after all. Given the choice whether she would allow the beheading a kidnapped OFW in the Middle East and being in the good graces of George Bush, she chose the former. Good call, Ma’am.
biznewsasia@gmail.com
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