Cebu enterprises asked to help improve business procedures (Cebu Business Guide)

To realize its goal to raise the Philippine ranking in various international surveys and reports, the National Competitiveness Council (NCC) urged Cebu enterprises to help analyze and suggest improvements to business procedures.

NCC co-chair Guillermo Luz said suggestions and recommendations can be made within the regional competitiveness councils that are being organized all throughout the country.

He said 12 committees have been organized and three more are on the way, adding that the move is in line with NCC’s thrust to move the Philippines up the different competitiveness rankings where it is at or near bottom.

Leading the way

“Although talking about competitiveness to you does not really seem that necessary. Cebu is known for being so competitive you’ve led the way for so many years…in organizing yourselves, attracting investments…sometimes moving so far ahead, you’re more known as Cebu rather than a part of the country,” he pointed out.

The NCC has cooked up three scenarios in its “game plan” for pushing the Philippine position by 2016 to number 30 in the World Economic Forum (WEF) Global Competitiveness Report, number 50 in IFC’s Doing Business Survey, number 20 in the IMD World Competitiveness Report, and number 30 in the Country Brand Index by 2016.

Luz nevertheless said improvements in business procedures this year could already raise the country’s rank in the IFC Ease of Doing Business Survey by 2014. However, he added, these changes must already be in place and yield measurable results by July 1, 2013.

Big impact changes

One scenario that NCC has cooked up is to introduce changes that meet the benchmark set by a country in the Association of Southeast Asian Nations (ASEAN) in big four impact areas measured in the Doing Business Survey.

These will involve cutting down the time it takes to register a business and property from over 30 days to less than 10 and the steps to follow down to 3, he revealed. Drastic improvements in two other areas, insolvency resolution and protection of investors, are also needed, he stressed.

In scenario one, according to Luz, if benchmark changes can be done within July 1, 2013, this could move the Philippine rank from 138 in Ease of Doing Business to 38.

“We live in a competitive neighborhood. We get our butt kicked if we don’t shape up… Over four years and there’s hardly any change. We need to get out from this part of the list,” he said, adding that the country has been overtaken by Cambodia and is near countries like Sudan and Lesotho in the IFC list.

Changes that must be introduced to insolvency resolution will involve shortening this process by three years and investor protection can be strengthened through a review of the Corporate Code of the Philippines, he pointed out.

Low-hanging fruits

Another plan that the country can follow is what he calls “low hanging fruit” scenario and this involves introducing moderate improvements in six of the 10 survey areas, such as in starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, and resolving insolvency.

This scenario, according to Luz in a recent forum on competitiveness in Cebu City, can move the country up from 138 to 109.

Setting Thailand as benchmark for improvements in dealing with construction permits, Luz explained that if the Philippines can do what it has done by reducing the number of steps for this procedure from 30 to 8, even if the number of days remains at 84, this change alone would move the rank for this indicator from 100 to 17 and its position in the survey to 127.

Changing the number of steps it takes to get electricity from 5 to 4 and number of days from 50 to 35 will improve the country’s performance in this particular area from 57 to 34 and raise its ranking to 134.

In registering property, reducing the number of days needed for the procedure to 5 and steps to 3 will move up the country’s rank to 126, he further said.

He stressed that the Philippines, which is ranked 129th for the getting credit indicator, can improve its credit information score by setting up a mechanism to improve access to such and legal rights score through a review of existing laws.

ASEAN benchmark

A third scenario is to improve all 10 areas in the survey based on a benchmark set by an ASEAN country to push the country’s position to 13, he revealed, but added he does not believe this could be achieved within the 2014 timeframe because some changes need legislation.

“We are still lagging behind in ASEAN in ease of doing business. There’s no denying it,” he stressed.

According to Luz, one of the lessons the NCC has learned in its assessment of Philippine performance is that transparency leads to competitiveness.

“It’s a measurable performance. Last year, the economy slowed down because measures were being put in place to fix the problem. At least P10.6 billion savings were realized for the same amount of project at the Department of Public Works and Highways. Road projects were being built better,” he pointed out.

Another important learning is “work in progress” doesn’t count and amounts to “zero” performance; ratings upgrade come when projects are completed, noted Luz.

Multiple fronts

The NCC has also realized that there is a need to work on multiple fronts, he said, stressing that it’s not enough to work on one or two of the 10 areas and expect this to fix the country.

“We need to work on four or more,” he stressed, adding that other ASEAN countries are moving up in the Doing Business Survey.

“The bar always rises. There is tough competition even just in the region. Maintaining momentum is crucial,” Luz further said.

To bring about the changes outlined in NCC’s game plan for the Philippines, Luz said they will call for a meeting of all government agencies involved in the different business transactions and get their commitment to implement improvements as well as for regular updates to be made to the economic clusters.

Some of these agencies include the Securities and Exchange Commission (SEC), Social Security System (SSS), Bureau of Internal Revenue (BIR), Philhealth, Philippine Business Registry, and Pag-ibig.

Top interventions in the IFC list are online transactions and one-stop shops and the country should go about making mainstreaming these procedures, added Luz.

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