MANILA, Philippines - The Philippines could rake in additional investments of at least P5 billion to P10 billion from the private sector annually should it simplify business regulations, according to the World Bank.
In a briefing last week, World Bank Philippine office senior country economist Karl Kendrick Chua said business regulations in the Philippines tend to be cumbersome and limit the growth of innovative entrepreneurship and investments.
“Indicative estimates suggest the high cost of doing business is clearly a toll on the country’s inclusive growth agenda. We don’t have exact numbers, but if we have simpler regulations, we are seeing anywhere from at least P5 billion to P10 billion in new investments that can come in,” Chua said.
Chua said current Philippine business regulations also contribute to large scale informality which prevents the country from creating more and better jobs that could reduce poverty at a faster rate.
He said simplifying business regulations could unleash the potential of the private sector, particularly the small and micro businesses which are important contributors and beneficiaries of inclusive growth.
“They not only have to pay legitimate fees between P21,000 to P45,000 a year when they open a business, they also spend a considerable amount of time moving from one agency to another, and waiting in line to process their documents, often resulting in significant loss of productive time and income. In some instances, businesses report they need to pay bribes to obtain various permits and licenses,” Chua said.
“After a business commences, numerous annual regulatory and tax requirements are needed, which can take many days in a year. Moreover, there are tax and contribution payments that have to be paid frequently every year,” he added.