A More Inclusive Economy

In the latest Ease of Doing Business (EODB) Survey Report, as of December 2017, the Philippines currently ranks 113 among 190 nations, a decline from the previous ranking of 99. The survey, which is conducted by the World Bank, compares countries on how conducive the local rules and regulations are to business opportunities and economic growth.

There are four classifications —Very Easy, Easy, Medium, and Below Average—with the Philippines falling under the third classification. EODB is based on the following key indicators: (1) Starting a business, (2) dealing with construction permits, (3) getting electricity, (4) registering property, (5) getting credit, (6) protecting investors, (7) paying taxes, (8) trading across borders, (9) enforcing contracts, and (10) resolving insolvency. In particular, the rankings are tested on the procedures, time, and cost of the above-mentioned indicators.

To compare, the current world ranking of the US in the EODB is 6, United Kingdom is 7, Australia
is 14, and Germany is 20. In Asia, South Korea is ranked 4, Japan is 34, and China is 78. In Southeast Asia, the Philippines has been overtaken by most of its neighbors, ranking 7 out of 10. Singapore ranks a high 2 in the index–beaten only by New Zealand, with Hong Kong close at 5. Malaysia ranks 24; Thailand, 26; Brunei, 56; Vietnam, 68; and Indonesia, 72. Only Cambodia, Laos, and Myanmar are behind the Philippines at 135, 141, and 171, respectively.

“Our goal is to be number one, but our first stop is to reach the top 20% of the competitiveness ranking by 2020,” Undersecretary Rowel S. Barba said during his welcome remarks at the 6th Ease of Doing Business Summit at the Philippine International Convention Center last June 13.

At the summit, which had the theme “Shifting Gears: Destination 20-2020,” Usec Barba reminded everyone that all stakeholders–employees from different government agencies to those in the private sector–has a role to play. “Let me remind everyone that we are in a race, and as
we always say, the competition never sleeps.”

Guillermo Luz of the National Competitiveness Council explained that economies compete for investments, trade or goods, service or jobs, tourists, and the local people. “Every year, we are working against tougher competition, higher standards. The bar always rises,” he declared.

THE ONSET OF EXTENSIVE REPAIRS
DTI Secretary Ramon M. Lopez, on his EODB Report to the People, said shifting gears also signifies a shifting of mindsets. He discussed the streamlining of government processes through E.A.S.E., (E for efficient or effective means, A for automated or accessible anywhere, S for seamless due to the interconnectivity and coordination among agencies, and E for economical or less costly). “We will have efficient or streamlined, and fast government services that are automated, and can be accessed electronically anytime, anywhere, making it convenient,” he announced.

Lopez mentioned the 19 EODB reforms and two data correction requests concerning seven
out the 10 key indicators of the World Bank EODB Index. These reforms include the Company
Registration System implemented by the Securities and Exchange Commission (SEC), the creation of a
Business One-Stop Shop (BOSS) for business and building permits by Quezon City, Single Window
Transaction by the Bureau of Internal Revenue (BIR), implementation of Customer eXperience
Engine by MERALCO, implementation of the Land Titling Computerization Project by the Land
Registration Authority (LRA), and deployment of electronic case management system through the eCourts project, among others. The reforms have resulted in the reduction of procedural steps and processing times. However, Lopez lamented whether the reforms are known to the public, and thus,
felt by the stakeholders. To achieve the goal of improving the EODB ranking by 2020, the reforms must be executed by December 2018 and felt by the respondents by May 2019, in time for the 2020 DB Survey
Report.

The recent enactment of Republic Act (R.A.) No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, is a game-changer, according to Lopez. It amends the longstanding R.A No. 9485 or the Anti-Red Tape Act of 2007, expanding its coverage and prescribing stricter measures, while adding new provisions. R.A. 11032 serves to cut bureaucratic red tape by expediting applications for permits and licenses making it easier to put up or renew businesses. It also aims to eliminate corruption by mandating a zero-contact policy during the application process.

Senator Aquilino Pimentel III, in his keynote address as Chairman of Senate Committee on Trade, Commerce, and Entrepreneurship, said the law answers Priority 3 of President Duterte’s 10-Point Socio-Economic Agenda in increasing competitiveness and the ease of doing business. “The DTI is correct. R.A. 11032 can be a gamechanger, but how much of a game-changer it is will depend on everyone here today. This landmark law should be implemented 100% and there should be no excuses,” Pimentel challenged.

REVVING THE ENGINE FORWARD
With the passage of R.A. 11032, the DTI seeks to implement Project One with the help of New Zealand’s Creative HQ. Aimed at streamlining business registration in the country, Project One uses “Design
Sprints” methods developed by Google Venture to find business solutions. Under this project, there will be a database of LGU registration processes; a mechanism for Philippine Business Number or a single, unique identifier to track applications; and a prototype for online registration application from beginning to end. “We are ready to initiate online application, One Form, One Number, One Portal for business registration, and we could realize this by putting technology to work. We do not just automate the process but transform the way government is doing business,” Lopez said in a statement.

The DTI also has plans to amend the outdated Corporation Code to address two EODB indicators–
Starting a Business and Protecting Minority Investors; enact the Secured Transactions Bill, seeking to improve the ways on Getting Credit; and, develop a Unified Employee Enrolment Portal as an online reporting system for employees of newly registered businesses.

Reforms have already been under way, backed further by a new law. The goal is set, plans have been made, and the wheels are turning–all geared towards progress. As Undersecretary Barba enjoined everyone, “Let us together step on the gas and speed away towards our destination of being number 1.