Production at a company in HCMC. (Photo: SGGP)

Several localities experience a drop in their PCI rankings

The 2022 PCI report gathers input from 11,872 enterprises, including 10,590 private companies and 1,282 foreign direct investment (FDI) enterprises operating in Vietnam.

The report ranks Quang Ninh, Bac Giang, Hai Phong, Ba Ria - Vung Tau, and Dong Thap as the localities with the highest quality of economic management among the 63 provinces and cities evaluated in the report.

Quang Ninh has topped the PCI rankings for the sixth time, with a score of 72.95 out of 100, followed by Bac Giang with 72.80 points.

The PCI 2022 report also reveals the drop in rankings of several localities, including major centrally-run cities that were previously seen as driving forces of the economy, such as Hanoi (falling from 10th place in 2021 to 20th place) and Da Nang (dropping from 4th place in 2021 to 9th place).

PCI rankings of localities. (Photo: SGGP)

One notable finding from the PCI 2022 report is the significant drop in Ho Chi Minh City's ranking, which fell 13 notches from 14th place in 2021 to 27th place in 2022.

Despite this decline in overall competitiveness, the city still holds a place in the top ten localities rated by FDI enterprises as having a favorable investment environment.

This highlights the commendable endeavors of HCMC in enhancing the environment to attract and retain foreign businesses, particularly in light of the Covid-19 pandemic's impact on FDI firms operating in industrial hubs in the Southeast region, like Binh Duong and Dong Nai provinces, who are exercising caution in expanding their operational footprint.

Businesses find it difficult to access loans

While the PCI 2022 results reveal that the quality of provincial governance has improved over time, with the average PCI score reaching 65.22 points - an increase for the sixth consecutive year, the report also indicates that enterprises continue to face challenges.

According to the survey of over 12,000 businesses conducted by VCCI, 55.8 percent of them reported having to tip credit officers to secure loans, highlighting the difficulties enterprises face in accessing financing.

Mr. Dau Anh Tuan, Deputy Secretary General of VCCI and Director of the PCI Project, has reported that the biggest challenge facing Vietnamese private enterprises, according to the PCI 2022 survey results, is accessing credit.

In fact, access to credit became the primary concern for approximately 55.6 percent of enterprises in 2022.

The PCI survey shows that the percentage of businesses accessing credit has been declining in recent years.

In 2017, 49.4 percent of enterprises had loans from banks and credit institutions, but this rate dropped to 45 percent and 43 percent in 2018 and 2019, respectively.

Even in 2020, amidst the Covid-19 pandemic, 42.9 percent of businesses had loans from banks and credit institutions.

Shockingly, the proportion of enterprises with loans from banks and credit institutions fell to 35.4 percent in 2021 and plummeted to 17.8 percent in 2022.

The 2-percent interest rate support package, deployed through the commercial banking system to help businesses recover from the Covid-19 pandemic, was an important credit support program for businesses in 2022.

However, the PCI 2022 survey results indicate that only 29.5 percent of enterprises were aware of this program, and a mere 2 percent of businesses reported receiving loans under the 2-percent interest rate support program.

Source: SGGP