Creating Davaos of our time



THE World Bank recently released its ease-of-doing-business annual report, titled “Doing Business 2018: Reforming Top Create Jobs.” Our rank slipped to 113th in 2017 from 99th in 2016 of a total of 190 countries covered by the yearly report. The Philippines’ distance to frontier (DTF) slightly improved to 58.74 from 58.32 in the period of the study.

The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is reflected on a scale from zero to 100, where zero represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Hence, when viewed regionally, the Philippines was below the average of 62.7 across East Asia and Pacific economies.

On a country-by-country ranking in Asean, Malaysia, ranked 24th in the Doing Business 2018 report, had a DTF of 78.43; Thailand’s DTF was 77.44 was ranked 26th; Vietnam had 67.93 at rank 68; and Indonesia, 66.47 at rank 72. Singapore was second overall. The Philippines was ahead of Cambodia, in 135th place, Laos 141st, and Myanmar 171st. These comparatives are troublesome to say the least in the light of the inroads made by the National Competitive Council (NCC)

When Vietnam hits its mark and we wobble, we lose our edge. We need to study our targets and get our act together. Getting our act together means getting local governments to seriously improve their ways because in the study, our country’s efforts were based on Quezon City. Not Davao, Taguig, Makati or Manila but Quezon City and that limits our efforts at reform because even the rankings done by NCC do not place Quezon City in the lead pack of cities performing well.

Apart from getting local governments to work for flag and all, we need to use open government protocols to put life to the effort. Arangkada Philippines of the joint foreign chambers has also called the attention of government on the same 10 indicators of the World Bank. These 10 indicators are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

How did we perform? The Philippines ranked 173rd in starting a business, 101st in dealing with construction permits, 31st in getting electricity, 114th in registering property, 142nd in getting credit, 146th in protecting minority investors, 105th in paying taxes, 99th in trading across borders, 149th in enforcing contracts, and 59th in resolving insolvency.

But as early as June 2016, the World Bank Group’s trade and competitiveness operations officer Roberto Galang said that Duterte’s decades-long service as a local government leader was a good sign for a country like the Philippines, which is hoping to climb the ranks when it comes to international competitiveness. “From what we know, doing business in Davao is relatively fast and that the incoming president has already made pronouncements that he wants government permits approved or deemed approved within three days. So, we are very hopeful that the new president will pursue this.” Let’s get it done, Mr. President. Time to crack the whip on the LGUs.

And this is where we find solace from such a report. PRRD comes from an LGU so he understands, because a lot of these doing business processes like construction permits and tax payments have an LGU component. According to the report, Duterte will have the convincing power to get the mayors to shape up because a lot of the issues involved are LGU concerns. Duterte served as mayor of Davao City for 22 years.

When local chief executives say it can’t be done, we just have to point to Davao, where it was done. Duterte created governance reforms in Davao in terms of streamlining, among others. It is something he understands and knows. Imagine if all highly urbanized cities are like Davao?

Again, in March 2017, the British Chamber of Commerce Philippines (BCCP) lauded the city government of Davao for efficiently facilitating investment influx and ease of doing business. BCCP executive chair Chris Nelson said that Davao City was a good model for cities with outstanding performance in championing ease of doing business. “What you’re doing here is actually great. Obviously, ease of doing business helps a lot of businesses to flourish.”

It’s time we did away with renewing business permits every year. It is a source of graft and delay at the local level. In other countries, when you get your business permit, that’s for life already. The same goes for tax payments; it is one of the biggest burdens for SMEs because you have to make the payments every month. “If you’re a business, once you complete your registration and everything, then that should be it and once a year you go to BIR to pay your taxes, but you shouldn’t be going to BIR every month, and you shouldn’t be going to the city hall every year because these are the issues that make doing business here not easy.”

The plan to link the Business Name Registration and the Philippine Business Registration systems into one portal has to be made fast and it should also be in a mobile platform app so it is seamless, if only we get the duopoly in the telcos to shape up. The plan is to link the portal to other national government agencies like the Securities and Exchange Commission, Social Security System, the Bureau of Internal Revenue, the Home Development Mutual (Pag-IBIG) Fund, and Philhealth. And then eventually, linking it to local government units.

“Cautious, careful people, always casting about to preserve their reputations… can never effect a reform,” and that’s the beauty of Davao and Duterte.


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