IFC aids 3 cities trim down business registration process

MANILA, Philippines - It will now take only a day to secure business permits in Pasig City, Tuguegarao and Puerto Princesa, down from the previous 10 to 74 days.

All three cities boosted their business registration process to further attract investors and improve the business climate, with the help of the International Finance Corp. (IFC), the private investment arm of the World Bank.

IFC resident representative Jesse Ang said if the lessons from the business simplification process are eventually applied to other transactions between a particular city’s offices and residents, it would be taking the reform process to the next level.

“The benefits will then be much more than we have seen so far,” Ang said.

In Tuguegarao and Puerto Princesa, which completed their reforms earlier this year, business registration increased 60 percent and 35 percent, respectively, from last year.

Pasig City Mayor Roberto Eusebio said a cumbersome process puts additional costs on businesses, particularly discouraging small and medium enterprises (SMEs), which make up about 98 percent of businesses in the country

 â€œWe will consider a simpler system for all other transactions done with City Hall, after the new registration system is fully operational,” he said.

The reform initiative is being implemented by IFC’s investment climate team in cooperation with the cities and the Local Government Academy of the Department of the Interior and Local Government (DILG).

The World Bank – IFC Regulatory Simplification Project-Phase 2 and the Canadian International Development Agency (CIDA) are directly supporting the initiative.

In a June 2012 Ease of Doing Business survey by the World Bank, the Philippines was ranked 138th out of 185 countries covered.

The country’s inability to attract and keep businesses is one of the major reasons for the low volume of foreign direct investments (FDIs), which are among the critical ingredients in increasing employment, agriculture and manufacturing, which in turn could speed up sustainable economic growth.

According to the World Bank, procedures and regulations in establishing and operating business have not changed significantly over the one-year period.

Singapore ranked first in terms of ease of doing business. Hong Kong, New Zealand, the United States and Denmark rounded up the top five in that order.

The Philippines’ ranking was way below that of Thailand (17th), Malaysia (18th), Taiwan (25th) and Vietnam (98), and was closest to Indonesia (129th).

Ranking is determined by the following factors: ease in starting up a business, securing construction permits, getting electricity, registering properties, getting credit, investor protection, tax payments, trading across borders, enforcement of contracts and resolving insolvency.