IN line with the Duterte administration’s fight against red tape and corruption in government, the House of Representatives voted 225-0 on Monday to pass on third and final reading House Bill (HB) 6579, a measure seeking to expedite permitting, licensing and other government transactions to help promote the Philippines as a business-friendly economy. The measure was adopted following the release of a World Bank document, dubbed “Ease of Doing Business Report 2018,” which showed the Philippines’s overall ranking going down to 113th, from 99th, in the previous World Bank report.
Rep. Ferjenel G. Biron of the Fourth District of Iloilo, chairman of the House Committee on Trade and Industry, said the bill will pave the way for easier, simpler and trouble-free avenue for entrepreneurs, micro, small and medium businesses and ordinary citizens who would like to start a business.
The fact that our lawmakers at the House were unanimous in acknowledging that a new law is needed to make it easier for entrepreneurs to do business speaks volumes. Compared to our Association of Southeast Asian Nation neighbors, the Philippines continues to perform poorly as far as ease of doing business is concerned. Rep. Vilma Santos-Recto, also an author of the bill, said it takes 16 procedures to navigate the application process and an average of 29 days to start a business in the country.
For the longest time, President Duterte has been urging concerned government agencies to reduce the period for getting business licenses and permits to two to three days. Normally, it takes 10 days to get the needed licenses and permits to start a business. Simplifying all government forms and reducing the number of signatories will help government agencies comply with the presidential directive. However, automation or online transactions can expedite the process of issuing business permits the way they do in advanced economies.
HB 6579 calls for the creation of a comprehensive and regulatory-management policy to improve competitiveness by easing bureaucratic and regulatory burden to business entities. This will ensure timely and expeditious processing of business requirements by national government agencies and local government units. To ensure a level playing field, the measure also intends to promote transparency in the government with regard to business registration and other public transactions.
While they’re at it, lawmakers must also look for ways to help the country attract foreign investments. They must look for ways to institutionalize transparency in laws and regulations. Needless to say, the lack of transparency in government regulations and laws are big deterrents for foreign investment in the country. For example, businesses have been complaining that their efforts to comply with taxation laws and regulations are frustrated by the lack of clarity and accessibility of tax information. Foreign business chambers have also expressed concern about weak enforcement of anti-smuggling laws and regulations as an obstacle to investment.
It should not be difficult for the Philippines to get a big part of the foreign-investments pie given the country’s strong macroeconomic fundamentals, a hundred-million market, skilled human capital and strategic location in Asia, to cite some advantages. Our lawmakers can help improve access of foreign-owned businesses. For example, they need to review the country’s antiquated foreign-investment restrictions mandated by the Constitution or specific laws. By amending protectionist clauses that work against national economic growth and greater employment opportunities, lawmakers can help the Philippines become an attractive foreign direct investment destination in the region.