By Cai U. Ordinario & Catherine N. Pillas
The Philippine Chamber of Commerce and Industry (PCCI) urged Congress to hasten the passage of a measure that seeks to cut red tape and make it easier for businessmen to set up shop in the Philippines.
The PCCI made the statement after the World Bank released its “Ease of Doing Business Report 2018,” which showed that the country’s ranking fell to 113th, from 99th in the 2017 edition.
PCCI is particularly keen on
Sen. Juan Miguel F. Zubiri’s Senate Bill 1311, or the “Expanded Anti-Red Tape Act of 2017.” The Senate approved the measure on third and final reading in August.
“[The bill] would put more teeth in the government’s efforts. I would like to think that, next year, we would have an improvement,” PCCI President George T. Barcelon said.
“The government, thus far, has been responsive. If they see the drop in ranking now, I think they will improve accordingly to raise it again,” Barcelon added.
Based on the report, the country ranked the lowest in starting a business at 173rd out of 190 economies. The Philippines garnered a score of 68.88, which was lower than the East Asia and Pacific regional average score of 82.32.
Data from the World Bank showed that it took Filipinos an average of 28 days to complete 16 procedures in starting a business. This process is estimated to cost businessmen at least P21,923.
The cost depends on variable amounts that will depend on a business’ authorized capital stock, paid-up capital, the assessed value of the company’s property and the local government where the business is being set up.
The Philippines also ranked low in terms of enforcing contracts, at 149th; protecting minority investors, 146th; getting credit, 142nd; paying taxes, 105th; and dealing with construction permits, 101st.
The World Bank said the data was obtained between June 2016 and June 2017. It measures 190 economies worldwide and documented 264 business reforms.
Economists said more needs to be done in terms of reducing red tape and corruption in government. These, they said, are the common reasons doing business remains difficult in the Philippines.
“I believe that, unless bureaucratic processes are streamlined and corruption is reduced, ease of doing business in the Philippines will continue to be ranked lowly,” University of Asia and the Pacific School of Economics Dean Cid Terosa told the BusinessMirror on Wednesday. “Institutional persistence is a big issue in
the Philippines.”
Terosa said red tape and corruption would make it difficult for the Philippines to achieve its goal of pole-vaulting to the upper third of the World Bank’s rankings by 2022.
For his part, former Socioeconomic Planning Secretary Romulo L. Neri agreed with Terosa and said the Department of Trade and Industry (DTI) should do better in terms of taking care of Filipino and foreign investors.
“DTI should regularly interact with investors to monitor their problems,” Neri told the BusinessMirror via SMS on Wednesday.
Barcelon, however, said the 14-point slide in the country’s rankings is “no cause for alarm” and attributed this to the adjustments made by new government officials.
“What we know from the ground is that local governments really need to improve and, perhaps ,there are some officials who are still getting used to a new administration and could not be aware of the
President’s drive of cutting red tape,” Barcelon said.
House bill
In September the House Committee on Trade and Industry approved the proposed Ease of Doing Business Act, which seeks to simplify the issuance of licenses, clearances or permits to business entities.
The proposed Ease of Doing Business Act is one of the priority measures of the Palace and the
17th Congress. “The purpose of this bill is to provide an easy, simple, straightforward and trouble-free avenue for entrepreneurs, micro, small and medium businesses and ordinary citizens who would like to venture into business in the country,” said Rep. Ferjenel G. Biron of the Fourth District of Iloilo, committee chairman.
Under the substitute bill, the Ease of Doing Business Commission will be created to review and repeal existing executive issuances and recommend the repeal of existing laws and local ordinances, which are outdated, redundant and add undue regulatory burdens to business entities.
The commission will be composed of a chairman, secretary of trade and industry and secretary of finance as ex-officio members, and one private-sector representative each from the micro, small and medium enterprise and large industry sectors.
The bill provides that all national government agencies and local government units (LGUs) issuing licenses, clearances or permits to business entities will post a comprehensive checklist requirement for every type of license, clearance or permit to be issued. A uniform checklist of requirements required by licensing and permitting offices issuing a similar license, clearance or permit will also be crafted.
The checklist of requirements, step-by-step procedure and schedule of fees for the issuance of a license, clearance or permit will be conspicuously posted in, among others, the premises of national and local government licensing and permitting agencies, the business one-stop shop or in designated public places.
The measure provided that national government agencies and LGUs involved in the processing and issuances of licenses, clearances or permits to business entities shall process the application of such business entities and communicate the decision regarding the approval of the application or, if the application has been disapproved, with the reasons for such disapproval, within the prescribed processing time.
The bill provided that the processing of licenses, clearances or permits should not be longer than one working day for barangay governments, three working days for simple applications and 10 working days for complex applications from the time of receipt.
For special types of businesses that require clearances, accreditation or licenses issued by government agencies, where technical evaluation is required in the processing of licenses, clearance or permits, the prescribed processing time should not take more than 30 working days.
Biron said the House of Representatives would tackle the substitute bill when it resumes session this month.