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Business Matters

Philippine Business Number

/ 05:00 AM September 22, 2018

In my last column (“‘Design Sprints’ for better governance,” 6/30/18), I talked about how we were using the technology of design sprints to rapidly develop solutions for challenges with business registration, permits, and licenses. Design sprints were first developed for technology startups by Google Ventures, but have since been adapted for use in many organizations, including government.

A design sprint compresses product development work into five intense days of activity. Over these five days (always a Monday-Friday period), a team of seven people design and build a prototype product and—more importantly—test it with real customers.

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Since the column, the Department of Trade and Industry has run two design sprints to create prototypes that I feel have the potential to radically change how businesses register themselves with the government. I say “potential” because these prototypes are exactly that—prototypes. While they work, they still need to be completely built out and their databases completed and linked.

Let me tell you about one of them: Philippine Business Number (PHBN). The concept is simple: PHBN is a single, unique identifier for your business. Think of it as the corporate equivalent of the proposed national ID.

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When you register your business in any agency in the Philippines, your company is assigned a number by that specific agency. For incorporation purposes, you start with the Securities and Exchange Commission (SEC, which gives you a number) but you also go through the BIR, SSS, PhilHealth, Pag-IBIG, your municipality, as well as any other agency which has regulatory oversight over your industry. Most, if not all, of these agencies will issue you an identification number. You may have anywhere from eight to a dozen numbers assigned to your enterprise, each of which you will need as a reference number when dealing with a particular agency.

Because most agency databases are not linked or shared yet, you may be asked to bring papers from different agencies to show to other counterpart agencies as a way of proving that your company exists. You may be asked to leave “certified true copies” of these papers.

PHBN addresses that situation by creating a single, unique identifier for your business which links all these disparate numbers together. Quoting a single PHBN identifier pulls up all your records at all agencies. Initially, it doesn’t replace the existing numbering system of agencies (too tedious), but in the future that probably should be the direction for all new enterprises registered starting on an agreed-upon fixed date.

There are many benefits to having a PHBN. Quoting that number to an agency or local government unit will enable the government to pull up all your records across all agencies to certify that yours is a properly registered and legitimate entity. You wouldn’t have to bring so many papers to prove your existence. Verification would be quick because it would be done online. That would make doing business with the government easier.

Second, this would set the foundation for dealing with government agencies electronically since all data can be checked online. If this were the case, more filing of applications for licenses and permits (especially renewals) can move online.

Third, PHBN would enable a company to check and verify the legitimacy of its suppliers, potential partners, customers, and even competitors. You could also check if they were complying with the regular filing requirements of the government. This can be done online and thus speed up basic due diligence checks for most companies.

The current prototype has started this journey but still needs to be fully built. The important thing to remember is that the prototype was built in five days, proving that technology solutions in the government can be developed quickly. This method can compress years of work into months and weeks. Only then can we seriously make improvements in our Ease of Doing Business rating.

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Guillermo M. Luz (gm.luz@competitive.org.ph) served as private sector cochair of the National Competitiveness Council from 2011-2018.

Business Matters is a project of Makati Business Club.

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