Expanded Anti-Red Tape bill foreseen to raise country’s economic performance

The proposed bill facilitating ease of doing business in the Philippines is expected to propel the country’s economy to greater heights, even exceeding the performance of its neighbors in the Asean region.

This was the optimistic outlook of Senator Juan Miguel Zubiri, who announced to delegates of the Visayas Area Business Conference (VABC) on Friday that Senate Bill (SB) 1311 or the Expanded Anti-Red Tape Act of 2017 has been approved on third and final reading in the upper house.

“With this, I hope we can overtake our Asean neighbors and go up in the rankings as well as generate more income from local and foreign businesses,” he said in a crowd of 400 people at the Waterfront Cebu City Hotel and Casino.

WEF report

Zubiri was referring to the World Economic Forum’s Global Competitiveness Report 2017-2018, where the Philippines’ ranking fell this year to eighth place in Asean behind Vietnam and Brunei Darussalam.

According to the report, Vietnam and Brunei Darussalam recorded substantial improvements in their standings, thus, were able to jump ahead of the Philippines.

The report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), which covers 12 categories — deemed the pillars of competitiveness — which presents a comprehensive idea of how competitive a country is. The report covers 137 economies.

In this context, the WEF defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country.

Among these is the institutional pillar, a factor that covers red tape, which Zubiri said the Philippines ranked poorly in.

This was a problem the proposed Senate bill seeks to solve and, in effect, increase the productivity of the country.

20% growth

Zubiri said that once the proposed law is implemented, the Philippines will get a boost in its competitiveness ranking regionally and globally as well as help local economies grow.

“If we fix infrastructure and good government, it will be easy for the Visayas to reach a 20-percent growth,” he said.

The Visayas economy grew on average by 8.47 percent in 2016, driven by the sustained increase in tourism arrivals, continued expansion of the business process outsourcing industry, and increased spending on construction, among others.

Last year, Central Visayas, Eastern Visayas, and Western Visayas contributed P1.021 trillion or 12.5 percent to the country’s gross national product.

But in terms of competitiveness, the Philippines still lags behind some of its Asean peers, some of which have even smaller economies.

16 procedures

Entrepreneurs in the Philippines need to go through 16 procedures to start a business, whereas there are only six steps in Malaysia and Laos, and three steps in Singapore.

When registering a property, the Philippines observes nine procedures, but Singapore only has four and Thailand has three.

In terms of paying taxes, Zubiri said businessmen in the Philippines have to make 36 payments in a year while those based in Malaysia are required only 13 and in Singapore, five.

SB 1311 is sponsored by Senator Zubiri, who also heads the Senate committee on trade, commerce, and entrepreneurship. It is a priority bill under this administration that aims at reducing the requirements and streamline processes in starting and operating businesses.

Amending RA 9845

The measure would amend the existing Republic Act 9845, or the Anti Red Tape Act of 2007, and would address the “defects in the current system of the business community’s transactions with government,” Zubiri said in earlier reports.

It still has to be approved by the House of Representatives and President Rodrigo Duterte for it to become a law.

Among the salient features of SB 1311 is the processing time for applications for license, clearance or permit of micro, small, and medium enterprises (MSMEs) set to a maximum of three working days for simple applications, and 10 working days for complex applications.