This article was originally published with The Manila Times on August 22, 2019.
As of late, I have been focusing most of my time with the Anti-Red Tape Authority (ARTA), a government agency still in its infancy, yet has already begun taking leaps and bounds in performing its mandate. ARTA was created under RA 11032, which I have written about in previous columns.
One key area of focus is the Philippine ranking in the World Bank’s Doing Business Report, which ranks global economies on 11 different indicators, all relating to the ease of doing business.
For instance, the first indicator centers on starting a business, from registration to the actual operations of that business. In the Philippines, we go through 13 steps with an estimated 31 days to go through the entire process (although by personal experience this has taken significantly longer). Throughout this process we gather documents, prepare statements, and separately coordinate with numerous government agencies including the SEC, BIR, SSS, HDMF, PhilHealth, as well as those of the local governments.
How are we doing?
How is the Philippines fairing compared to the rest of the world? Honestly, not too good. For the Starting a Business (SAB) indicator, which measures the number of steps, time, and costs, the Philippines is ranked 166th out of the 190 economies studied. For this indicator alone, many of the global topnotchers include many of our Asia-Pacific neighbors such as New Zealand (1st) Singapore (3rd), Hong Kong (5th), Australia (7th), South Korea (11th), among others.
How did these economies achieve such rankings? How long does it take to completely register a business? Well the answers are somewhat amazing. For New Zealand it takes one single solitary step measured in half a day (though conversations with their Ambassador revealed it takes only a few hours). The others are equally as impressive with Singapore (three steps, 1.5 days), Hong Kong (five steps, 1.5 days), Australia (seven steps, 2.5 days), and South Korea (11 steps, 4 days).
Interestingly, other growing economies have managed to gain significant traction in their SAB performances. For instance Georgia is ranked 2nd out of the 190 economies (one step, 2 days), Jamaica is 6th (two steps, three days), Armenia is 8th (eight steps, 3.5 days), and Azerbaijan is 9th (three steps, 3.5 days).
How did they do it?
The case of Georgia is a familiar one, as the innovations in streamlining their processes were led by Georgian former minister for the economy Vera Kobalia, an AsiaGlobal Fellows colleague, friend, and Caucus, Inc. consultant. She helped grow their economy by over 7 percent year on year, with an increase in trade turnover by 26 percent, and a 20 percent increase in foreign direct investment — by streamlining their processes and procedures in starting a business and creating a central co-location where applicants can register their businesses.
For global leader New Zealand, its stellar performance is due mainly to a recognition of the need to embrace digitization. It takes them, by World Bank metrics, only half a day to register a business end-to-end. They achieved this by making all the steps, procedures, and requirements available for submission and completion online. In fact, their ambassador says they are moving even further, now bringing company registrations to the mobile phone through an app.
How can we achieve the same?
In order for the Philippines to compete, we have to get back to the basics. First, what makes it efficient in many of these economies is because one can prove his or her identity with ease. A single national ID card is what it takes in Hong Kong, Singapore, and even China, while here, we deal with drivers licenses, passports, IBP cards, SSS cards, voter cards, PRC IDs and the list goes on.
Second, we need to strengthen intergovernmental communication and cooperation. Registering a business means dealing with numerous government agencies and each one isn’t talking to the others as much as they should be. For example in the Georgian model, the centralized system means a person submits the documents. These documents, not the applicant, go through the different agencies for registration and verification. At the end of it all, the process is complete and the applicant now has a business ready to run after only two days.
The Philippines is poised to reap the benefits of a more efficient governmental system. Our economy is performing well, and investor sentiment is bullish. We are attractive as an investment destination, and our efforts to streamline government services are in the works. God willing, we can show the world what the Philippines can do.
The author is founder and CEO of Caucus, Inc., a multi-industry, multi-disciplinary management consultancy firm. He graduated MBA (De La Salle University), Juris Doctor (Far Eastern University), and Masters of Law in International Commercial Law (Honours, University of Nottingham, United Kingdom). He also studied Mandarin Chinese Language and Culture in Fuzhou, China, was a Chevening-HSBC UK Government Scholar, a Confucius Institute Scholar, an alumnus of the US State Department’s International Visitor Leadership Program, and a Fellow of the Asia Global Institute – University of Hong Kong. The author may be emailed at email@example.com.