Good news for new-venture investors in the Philippines – the once cumbersome, slug-paced procedures that made it practically impossible to get enterprises off the ground in any sort of timely fashion, are being relegated to ‘the bad old days’. And the Philippines dismal international image of a place where it’s just too difficult to do business is starting to shine as it leaps forward 14 places in the World Bank 2016 Ease of Doing Business Index in 12 months – and 54 places since 2012.
The improved-procedures regimen is the result of four years of deliberations, implementation of changes and monitoring of the results by the Ease of Doing Business Task Force, directed by the Department of Trade and Industry (DTI) to slash through the red tape. The results of their efforts is that the number of procedures needed to establish a company have been reduced by 37.5% – from 16 to six – while the time involved to complete all the regulatory paperwork and acquire business registration and all the other paraphernalia has been reduced by 23.5% – from 34 days to eight days.
The inter-agency task force was formed by an administrative order issued by outgoing president, Benigno Aquino, in 2012 – specifically, to improve the Philippines’ embarrassing ranking in the World Bank’s index, by implementing the Gameplan of Competitiveness. Under the DTI, the group comprised the departments of Finance, Interior and Local Government, Justice, Land; the bureaux of Inland Revenue, Customs; Land Registration Authority; Credit Information Corp.; Securities and Exchange Commission; Social Security System; Home Development Mutual Fund; Philippine Health Insurance Corp.; National Competitiveness Council; Quezon City Government (subject city of the report).
The Gameplan’s criteria was to focus on the same 10 metrics used by the World Bank in compiling its index, namely: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, Resolving Insolvency.
Initially, the working group “identified bottlenecks, redundant steps and unnecessary requirements in government transactions” – making significant reforms and procedural adjustments to streamline processes, eliminate constraints and reduce completion times. Then it implemented the reforms within the members’ government departments and agencies and monitored their effectiveness.
Ease-of-doing-business is not just a critical pre-requisite for attracting foreign investors to the Philippines, it is a highly competitive element of FDI procurement as well – and particularly among Asean member states, all of which are vying for foreign funds to pursue their own economic-development goals. The Gameplan’s achievements to date will certainly help in this endeavour and the project is likely to get fresh impetus under the new administration, as the wholesale removal of red tape is a Duterte priority.