"Here is the present system and how it has improved."
"Here is the present system and how it has improved."
You can say it is much easier now to do business in the Philippines, under the administration of President Rodrigo Roa Duterte.
The Philippines now ranks 95th in ease of doing business, per a World Bank report. That’s among 190 countries. But 95th came from 124th.
The jump is 29 rungs—phenomenal by Philippine standards where doing things in some government offices is measured in millennia. Things never really move nor improve.
In Southeast Asia, the Philippines has among the worst record in making things easy for businessmen and investors.
In the entire world, Singapore is second best, Malaysia 12th, and Thailand 21st. They are our ASEAN neighbors. We are 95th. And we say wow.
The Philippines improved in three areas: Starting a business, dealing with construction permits and protecting minority investors.
A combination of legal and administrative reforms has made the historic improvements for the Philippines possible.
First is President Duterte himself. He has fear and wow factor. Bureaucrats fear him because he could shame them—or even kill them. So the public is in awe. This is a no-bullshit President. There never was one before him.
Then, a law was passed to cut red tape in the entire government bureaucracy. A commission was formed to enforce the law. The commission’s establishment was delayed, of course,—by red tape.
When the Anti-Red Tape Authority was finally set up, nine months behind deadline, it still had to feel its way through the labyrinth of bureaucracy.
At the administrative level, the most red tape- and corrupt-ridden government agencies finally got together (perhaps out of fear of the President) and thought of somehow, simplifying their cumbersome procedures. It is not only out of sense of duty that they got together. Duterte ordered an across-the-board cut in red tape— a procedure must take at most three days, in all government agencies.
Many of the agencies are headed by people who think they are lords to whom the public must pay homage before they are rendered public service. Other “public servants” are just plain sadists who think it is cool to make the public fry under the sun or to cool heels for endless hours.
Complying with that order was not easy. “It was like climbing Mount Everest,” grins Trade and Industry Secretary Ramon Lopez.
What are these agencies? Here they are:
• Starting a business—Securities and Exchange Commission, EC, Bureau of Internal Revenue, Pag-IBIG, PhilHealth, Social Security System, and various local government units (LGUs or the towns and cities). In the World Bank study, the sample LGU is Quezon City.
• Dealing with construction permits—LGU
• Getting electricity—MERALCO
• Registering property—Land Registration Authority, LGU
• Getting credit—Credit Information Corporation (CIC), and private sector organizations like TransUnion, BAP Credit Inc., CRIF, Compuscan
• Protecting minority investors—SEC
• Paying taxes- BIR, SSS, PhilHealth and Pag-IBIG
• Trading across borders—Bureau of Customs
• Enforcing contracts—SEC, Supreme Court
• Resolving insolvency—Supreme Court
• Logistics services sector
Thanks to Ramon Lopez, here is the present system and how it has improved (Note: This is on paper; it does not mean it is the actual practice). Many times the concerned government agency has some additional excuses to add an extra step, an extra day, or an extra cost (until the applicant gets the message, you know). This is particularly true of the SSS where things do not seem to improve, at all.
To register a company, it now takes only three steps (from four) and three days (from five).
To deal with the BIR in Quezon City, it takes two steps (from six before) and eight days (from 12 before). Still, can you imagine dealing with the taxman for eight days? In number of working days, that’s a week and a half.
In starting a business in Quezon City, it now takes 10 steps and 16 days. It used to be 16 steps and 28 days. The best global standard in starting a business—10 minutes, one step.
Making things easy for business is good for business, good for the economy, good for the country.
Says the World Bank, in its 2020 Ease of Doing Business Report: “Economies that score well on Doing Business indicators benefit from a higher level of entrepreneurial activity. This in turn generates better employment, greater government revenue and higher incomes. In addition, where burdensome and protracted regulatory processes exist, the temptation to resort to corruption to get things done may be greater.”
The World Bank says that in almost every country, “there is some scope to streamline or expedite rules to make it easier to do business, allow entrepreneurship to flourish, and make it possible for economic activity to reach its full potential.”
Five East Asia and the Pacific economies are among the top 25 global performers, including Singapore(2nd), Hong Kong SAR, China (3rd); Malaysia (12th); Taiwan, China (15th); and Thailand (21st). China jumped in the ranking to 31st and is among the top 10 improvers for a second consecutive year.
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