Philippine business conditions seen headed in right direction

The Philippines is headed in the right direction in terms of becoming a more conducive business environment, the Chandler Institute of Governance (CIG) said.

“The attractive marketplace (pillar) is about the capabilities that the government has to create a conducive business environment,” Kenneth Sim, dean at Chandler Academy of Governance, a Singapore-based public-sector training organization, said in an event organized by CIG and the Eastern Regional Organization for Public Administration.

“Relative to peers, the Philippines doesn’t do as well. But the gap is closing, and in the right direction, which means the Philippines is actually catching up to the global average,” he added, citing comparable economies like Vietnam and Egypt.

Citing results of the Chandler Good Government Index (CGGI) in 2024, Mr. Sim said that the Philippines posted a 0.56 marketplace attractiveness score last year, up from 0.53 in 2023. The global average is 0.58.

“Part of the reason why this is improving is the stable macroeconomic environment, which looks at things like inflation, as well as the other one that has improved, which is logistics competence,” he said.

Some key indicators for an attractive marketplace, like property rights and business regulations, are below the global average.

In particular, the country scored 0.39 in stability of business regulations, against the 0.51 global average. It scored 0.30 in property rights, against the 0.50 global average.

Mr. Sim noted opportunities to improve in the leadership and foresight components of the index.

“Over the years, there has been a decline in the score for the Philippines. It started at just above 0.4 in 2021, and by 2024, the Philippines will have dropped to 0.33. So this means, again, that the gap between the Philippines and the global average has been widening,” he said.

“It is important to point out, however, that even though we call it leadership and foresight, it is not about individual leaders; it is about the ability of the system to develop these capabilities,” he said.

“Of course, leaders play an important role, but this pillar is not about people. It is about the system,” he added.

“The performance of the Philippines in the CGGI in 2024 is somewhere in the middle. 67th out of 113, not the best, but certainly not the worst,” Mr. Sim said.

He added that although the country’s rank has suffered, its score has declined only slightly.

“What this means is that over time, relative to itself, in your own country, you have kept your performance relatively stable, but the rank has fallen, which simply means that more people are joining the index, and others are doing even better,” he said.

“So, staying in place and being patient is not going to help you to improve in ranking,” he added.

He said that the Philippines is stronger in areas like strong institutions and financial stewardship.

Source: Business World

The need for gender equality in corporate boards

Since March is Women's Month, it's timely to talk about gender equality and women representation in corporate boards.

Gender equality is one of the sustainability goals of the United Nations. Ending all discrimination against women is not only a basic human right, but a necessary foundation for a peaceful, prosperous and sustainable world. It is proven that empowering women helps economic growth and development (United Nations Development Program, Goal 5, available at https://www.undp.org/sustainable-development-goals/gender-equality).

There is also a push for general equality or diversity in corporate boards. Under the Revised Corporation Code, the board of directors shall exercise the corporate powers, conduct all business and control all properties of the corporation.

The Organization for Economic Cooperation and Development has recognized that the ability of the board to ensure strategic guidance of the company depends, in part, on its composition, which should include directors with the right mix of background and competencies. There is research that suggests that gender diversity on boards has positive spillover effects on board dynamics and governance

In a diversity tracker or study conducted by Egon Zehnder in 2024, it was reported that 96 percent of corporate boards have a least one woman director, and on average, women accounted for 34.9 percent of new board appointments in 2024. The study found that despite more women joining boards globally, setbacks in new board appointments and slower advancement to leadership roles highlight the need for more intentional board succession planning (The Progress of Board Diversity: Slow Advancement Amid Waves of Change, available at https://www.egonzehnder.com/global-board-diversity-tracker).

A study conducted by the Philippine Women's Economic Network showed that women comprise only 17 percent of directors in Philippine publicly listed companies or PLCs.

Gender parity

According to the World Economic Forum, gender parity in the workforce can be advanced through both formal measures like quotas and policies, as well as through informal factors such as professional networks.

Norway, Spain, France and Iceland have laws requiring that women comprise at least 40 percent of boards in publicly listed companies. Six countries require between 20 and 35 percent, and four countries — India, Israel, Korea and Malaysia — require "at least one" female director. Malaysia is the first Southeast Asian country to impose a one-female director quota.

It is still debatable if a quota will be good for the Philippines, which has historically been in the top 10 of the World Economic Forum Global Gender Gap Report until 2018. But we slid to No. 25 in 2024, dropping nine slots from its 16th place 2023 ranking. (It was said the slide was due to losses in economic parity and a reduction in the share of women ministers).

Other than quota, LinkedIn data suggests that gender gaps in online professional networks lead to men typically having larger networks and stronger networks than women. Stronger networks are associated with increased probability of career progression and receive more recruiter outreach.

However, one silver lining is that women have more "weak" ties, which have been linked to better career outcomes (Global Gender Gap Report 2024, Insight Report, June 2024, available at https://www.weforum.org/publications/global-gender-gap-report-2024/digest/).

It is thus important that women corporate directors be in strong networks worldwide, including the Philippines.

Here at home, NextGen Organization of Women Corporate Director (NOWCD) is pushing for more women directors in Philippine PLCs and boards. NOWCD is an organization of women directors in the boards of highly esteemed and reputable publicly listed companies or companies vested with public interest. It is the Philippine affiliate of Women Corporate Directors, the world's largest community of women corporate board of directors.

From its inception in 2021, NOWCD has made its mission to develop highly qualified women directors to become drivers of visionary and effective boards. Its goal is to help increase the representation of women in leadership positions of public and private company boards in the Philippines. The organization believes that diversity is key to bringing about balance and success to the future of any corporation.

The Institute of Corporate Directors provides directors with multifaceted learning forums to advance their governance knowledge and build the necessary skills to enhance their contributions in the boardroom.

Source: Business World

Corruption and education are top concerns of business executives

Corruption, education, and dealing with local government units (LGUs) are top concerns for businesses this year, according to the Management Association of the Philippines (MAP).

Speaking at the business group’s inaugural meeting yesterday, MAP president Alfredo Panlilio said a survey conducted among members in the fourth quarter last year showed corruption as the top concern of businesses for 2025.

Other concerns identified by MAP members in the survey are education, the economy, ease of doing business, climate change, cybersecurity, and dealing with LGUs.

Panlilio said concerns about dealing with LGUs involve the delays in issuance of permits to undertake projects, including those in the telecommunications and power sectors.

To address the concerns, he said this year’s board has set four main thrusts that will guide the group’s activities. These are member engagement, country competitiveness, ESG (environmental, social, and governance) shared prosperity, and investing in the youth.

“To address corruption and ease of doing business, we will continue to participate actively in the programs of the Anti-Red Tape Authority or ARTA,” he said.

In terms of member engagement, he said MAP’s general membership meetings would cover issues that are relevant and beneficial to members and the economy.

On country competitiveness, he said MAP would continue to push for policy reforms that will eliminate corruption, improve the ease of doing business, ensure food security through agricultural productivity, and sustain an enabling business environment for both local and foreign investors.

“The aspiration is to attract greater and more diverse job-creating investments for more Filipinos to be gainfully employed,” he said.

When it comes to the ESG and shared prosperity thrust, he said MAP would continue to promote sustainable practices, ethical leadership, and inclusive growth to create long-term value for members and all stakeholders.

“We will continue pushing for the discourse and activities to champion responsible business, uplift communities, and contribute to a resilient and equitable future for the Philippines,” he said.

He said MAP would also continue its campaign against malnutrition and child stunting in line with the thrust to invest in the youth.

The business group will also continue efforts to urge both the government and private sector to pursue relevant education, health, and wellness programs, particularly for the youth.

“The objective is for the youth to become productive members of society, with competitive skills and capacity that will ensure a progressive economy of the future,” Panlilio said.

In addition to the four main thrusts, he said MAP would pursue other advocacies and programs aimed at helping businesses adapt to developments in the domestic and global landscape.

Source: Philstar