Changing the ways of doing business in PH

A new year is a time for change. A survey of the SWS shows that 96 percent of Filipinos are hopeful at the start of 2018. The World Bank and Asian Development Bank have issued positive forecasts on the economy given the potentials of increased public spending on infrastructure.

The Board of Investments reported a record-breaking milestone of P616.7 billion in new investments, with 426 new projects expected to generate 76,065 jobs when fully operational.

Bright economic prospects boost investor confidence. However, endemic corruption and red tape in the government bureaucracy stifle business growth and deter competitiveness.

Problematic factors for doing business. Despite the bright economic outlook, the problematic issues of the past continue to affect the business environment. The inefficient government bureaucracy, inadequate supply of infrastructure, and corruption were among the negative factors that dragged down the Philippines’ ranking in the Global Competitiveness Report (2015-2017), as well as the World Bank Study on Doing Business in 190 countries.

According to the World Bank’s Doing Business Report, the Philippines still performs below par in terms of its efforts to ease processes for doing business and even slipped from 99th place to 113th in 2017.

Despite government efforts, entrepreneurs still consider starting a business, getting construction permits, or getting credit to start a business a tedious ordeal.

Using the case of Quezon City, the World Bank Report pointed out that the business incorporation process requires 16 procedures, which takes 28 days. These cumbersome procedures dampen local and foreign investors’ enthusiasm. Many complain about slow and inefficient frontline services for permits, licenses and clearances.

We await how President Duterte will assert his political will to push for real change in simplifying government transactions, especially to facilitate businesses both at the national and local levels.

Speed up implementation of reforms. The Department of Trade and Industry, Department of the Interior and Local Government, and Department of Information and Communications Technology have initiated reforms to prescribe mandatory processing time, call for unified forms, and reduce the number of signatories through various memorandum circulars. But there is still so much that can be done to make government transactions faster and more efficient.

Local government units have been directed to automate systems and streamline their business processing licensing system to reduce processing time to two days for new business registration and one day for renewals.

Last year, the Senate and the House of Representatives passed on third and final reading the proposed Ease of Doing Business Act, which seeks to include all government units involved in the issuance of licenses, clearances, or permits to business entities.

Once the proposed measure is passed, it will institutionalize transparency and accountability in our agencies — a step in the right direction.

A laudable provision in the bill seeks to penalize erring officials or their designated representatives for failing to act expeditiously on documents or failing to inform applicants about deficiencies in their application.

Another major challenge now is to ensure that the planned projects under the “Build, build, build” program will be implemented, and the revenues targeted under the tax reform package will be collected and administered properly.

Political will to reduce red tape. Time is of the essence. We need strong political will to urge executive agencies, as well as local government units to do their part in making business regulations more simplified and client-friendly.

In the end, there should be a change in mindset among our officials and frontline government workers to focus more on the output rather than on the procedures. The client’s interests and convenience must be the center of business reforms.

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Dindo Manhit is founder and managing director of Stratbase Group.