Red tape slows down PH competitiveness (SunStar Cebu)

One of the biggest concerns keeping the Philippines from being competitive is its bureaucracy.

National Competitiveness Council co-chairman Guillermo Luz, who cited indicators from international competitiveness surveys, said that all around the world, businessmen find corruption and inefficient bureaucracy as the most problematic factors for doing business.

In the World Economic Forum’s Global Competitiveness Report, ranks low in the number of procedures required to open a business. “We are killing business with red tape,” said Luz.

He noted that the Philippines has 16 steps needed to do a business and about 36 days’ wait for approval. Compared with Malaysia, it requires just three steps and six days’ waiting time. Luz said that if the Philippines cuts 13 procedures and 30 days from the application of a business permit, this would move the country’s ranking up 19 slots for that one indicator.

“This assumes the other countries are not moving. That is not a good assumption.”

While many have noted the presence of one-stop shops that streamlines the process of applying for business licenses, Luz said this is only second in the list of best practices. He said the most popular business practice that businessmen consider is making these applications available online, which he said is being done in Singapore and Hong Kong.

He also demonstrated that if the Philippines improves in just 10 out of 111 indicators, it could lead the Philippines to rank 13th in the survey in the future, if all other economies do not improve. Surrounding the Philippines in the 136th spot are countries like Sudan, Sierra Leone, the West Bank and Gaza. “We need to get out of this neighborhood. This is not a good place to be in,” he said.

Luz lamented that the country’s economy is vibrant and has a large workforce, but is not taking advantage of it. We have many good qualities in place. But this is the slowest, most difficult, inhospitable environment in Asean all because of red tape,” he said.

Luz clarified that getting rid of government bureaucracy does not mean getting rid of government regulations. “We need to manage regulation better. We need regulation.”

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