60 days to start a business!

We need a vibrant economy that is mainly driven by a strong entrepreneurial base if we aspire to conquer poverty which has haunted us for decades. Thriving businesses will churn wealth and create employment in an inclusive cycle that will benefit the maximum number of Filipino workers and their families.

The entire nation is addicted to elections like a plague. We have pinned our hopes on the ballot results without fully realizing that these exercises will not directly yield the results which will turn around the seemingly downward trend in the lives of the majority of our citizens. Elections influence our economy, of course, to a great extent. But these will hardly change the lives of those who are already in the balance. Not unless we are able to elect leaders who will finally alter the fundamental structure of our political system and pave the rare chance for us to catch up with our neighbors.

Our dilemma is both complex and complicated. There’s no single stroke that would magically resolve the perennial socio-economic problems that burden our people. However, we can focus on improving the business climate and hope that this component of the chain can unleash the virtuous cycle that will steadily improve the welfare of our households and communities.

Let’s start with the most achievable step which can deliver a series of positive domino effects. Ensure the much-delayed ease of doing business beginning in the registration of corporations, to organizing the offices of these entities, up to tax compliances.

We must immediately lessen the days that it takes to formally register a business. Beginning from the registration in the Securities and Exchange Commission (SEC), to securing the business permits from the local government, up to the accreditation in the Bureau of Internal Revenues (BIR), at least 60 days are needed – if you’re lucky. There are 13 procedures to be hurdled for this basic registration, 22 to start operating a manufacturing plant and 13 various taxations during operations. Further cause of possible additional delay is getting the construction and renovation permits needed to improve your offices.

Recently, a businessman sought our assistance for the lifting of his company’s suspension in one of the SEC’s provincial branches. The entire process for this, as mandated by the SEC rules, must be covered and concluded within 18 working days from the time that penalties were paid, and the necessary documents submitted. Allegedly, more than six months have already lapsed, and the lifting order was not granted yet. Not until a fierce journalist heeded and wrote about it through his Facebook, which perhaps finally compelled the issuance of certificate of lifting the suspension which then allowed the business operations to reopen.  

This is just one of the unnecessary challenges that hinder the fast growth of businesses in the Philippines. But this is one problem that can be resolved sooner than the long and tiring period that makes our business environment less attractive and uncompetitive compared to our neighbors, who have already perfected this basic registration process in less than one week.

Because we need more successful business establishments, we must encourage entrepreneurs to open their shops and succeed. But there are obstacles that they must contend with. Aside from registration woes which supposedly are the easiest to untangle, businesses here must contend with a number of other external stumbling blocks.

The cost of electricity in the country remains to be more expensive compared to other countries.

We still primarily depend on many coal-fired and bunker-fuel power plants. They supply energy at a higher direct cost plus the damages they inflict on the environment. We are averse to using nuclear energy which makes our energy mix less competitive. It’s good that we’re now witnessing a steady growth and deliberate ambition to increase the use of renewable energy that will be supplied to our national grid. Thanks to the vision of the present Department of Energy Secretary Raphael Lotilla, the energy sector is heading towards the right strategic direction.

Logistical issues also snag the flow of goods due to traffic congestions, limited infrastructure such as narrower and fewer roads and the lack of mass transportation, both for passengers and cargoes. We also hear nightmares on corruption, regulatory inconsistencies and inefficiencies in the business support systems such as slower legal arbitrations and resolutions. We’re ranked 95th out of 190 economies in terms of “ease of doing business,” according to the World Bank 2020 report.

Strike at the most basic problem of business registration. There’s a myriad of issues that would restrict the expansion of our business base. But we can begin improving by starting on this earliest step. Integrate the long processes both in the national and local regulatory agencies. Fully digitalize to achieve the ideal efficiencies. Make business registration a walk in the park. This can be done. Then, the longer entrepreneurial journey can eventually build on the momentum of a flawless corporate birth.

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