Tags: Administration, Government Offices
By Anna Valmero
MAKATI CITY, METRO MANILA— The Philippines slipped further in World Bank’s “ease of doing business” ranking, falling to 148th place out of 183 countries, as companies here spend more time and resources setting up businesses.
According to a report by the World Bank and International Finance Corp. (IFC), securing construction permits became more difficult in the country.
An entrepreneur in the Philippines is required to undergo 26 procedures when applying for construction permits, which prolongs the processing to an estimated 169 days compared to only 25 days for a business owner in Singapore, which topped the rankings followed by Hong Kong and China.
Also, the updated electricity connection costs made applying for construction permits inefficient and costly, according to Neil Gregory, acting director for Global Indicator and Analysis at IFC.
Gregory is also co-author of the annual report “Doing Business 2011: Making a Difference for Entrepreneurs,” which tackles regulations relevant to the life cycle of domestic small and medium-enterprises or SMEs.
The report also attributes the Philippines’ decline in rankings to other factors. In terms of paying taxes, the report says an entrepreneur in the Philippines spends an average of 195 hours each year, filing 47 tax payments.
Despite the decline , Gregory lauded the Philippines for being among the top ten most improved economies in “easing business processes”, noting the introduction of a “one-stop shop” that shortens the process of securing and inspection of documents in municipal and city mayors’ offices from up to 53 days to 15 days.
IFC helped four cities in the Philippines simplify requirements for obtaining business permits this fiscal year, generating about $1 million in private-sector savings in the first six months of the year.
“The Philippines also improved its electronics customs systems, adding functions such as electronic payments and online submission for declarations. As a result, a company or an SME cost to export decreased from $816 to $675 per container,” said Gregory.
“Meanwhile, cost to import decreased from $819 to $730 per container,” he added. Cost to import covers the assembly of documents, customs clearance, ports and terminal handling, and inland transportation and handling costs.
“There are still a lot of processes and regulations to improve to make doing business more efficient and easier for Philippine SMEs,” said Gregory.
World Bank country director Bert Hoffman said the results of the report can serve as a global benchmark for the Aquino administration as it begins serious national regulatory reforms and embark on a concerted effort to complement local initiatives.
“These should help the country to keep pace with other economies in enabling local small and midsized companies to join the formal sector, become more competitive and create more jobs in the country. We are encouraged that President Aquino included in his state of the nation address the need to streamline business registration,” Hoffman said.
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Red Tape dahil kay Mayor, Red Tape sa BIR, Red Tape sa Customs… duh?
yeah, red tape was already rampant from the highest to the lowest offices of government. There was ones a foreign friend of mine who wants to establish a business here but due to this long procedure in getting those necessary documents, he discontinued in pursuing it.