GOVERNMENT agencies unveiled on Tuesday a package of reforms to further simplify the process of starting a business in the Philippines to six steps and eight days, down from the existing setup requiring 16 steps and 34 days.
The government also announced e-government initiatives for accessible and convenient online transactions for payroll-related payments to Philhealth and Pag-IBIG, reducing the number of payments from 36 to 13 per year.
“We continue to be encouraged by reforms that will make our business registration faster, simpler, more efficient, and more transparent,” DTI Secretary and NCC Co-Chair Gregory L. Domingo said.
Various government agencies and the Quezon City government announced the launch of the reforms—a product of continuing work under the National Competitiveness Council’s (NCC) Gameplan 3.0 to synergize government processes related to easing the conduct of business in the Philippines.
The agencies included the Department of Trade and Industry (DTI), Department of Finance (DOF), National Competitiveness Council (NCC), Department of the Interior and Local Government (DILG), Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (Pag-IBIG), Land Bank of the Philippines (LBP), and Development Bank of the Philippines (DBP).
Gameplan 3.0 streamlines and simplifies government processes across 10 transactions related to the “Ease of Doing Business” index as measured annually by the World Bank and International Finance Corporation (IFC).
The package of reforms involving starting a business included merging several steps together to create single-window applications powered by more interconnectivity across IT systems of different agencies, the removal of several outdated procedures, and the introduction of enhanced one-stop-shop procedures in local government units.
These changes involve coordination and partnership across numerous agencies such as the SEC, BIR, SSS, Pag-IBIG, PhilHealth, and local government unit Quezon City.
The net effect is that the time it will take to incorporate new corporations, partnerships, and non-stock corporations at the SEC will be reduced from 16 steps and 34 days to 6 steps and 8 days.
Initial roll-out of the reforms will begin at the SEC’s Manila office starting this month, where most companies are incorporated. Roll-outs will continue in succeeding months across all SEC offices and a full on-line system will be made available next year.
Meanwhile, payroll-related payments to Pag-IBIG and PhilHealth are being moved online for companies employing more than 10 employees. Payments to SSS have already been moved online for companies with more than 10 employees since last year.
Online banking facilities at LBP and DBP which require no minimum average daily balance for these transactions are being made available for enterprises. This will reduce the number of payments from 36 to 13 per year, representing major time and cost savings for businesses and entrepreneurs.
“Basically we have the Philippines Business Registry (PBR) for sole proprietorship, then you have equivalent PBR for SEC-registered companies, and then hopefully we will have a PBR for the cooperatives,” Domingo told reporters.
“Those are the three legs then it will put in one website so when you want to put up your own business, you will just choose among sole proprietorship, partnership corporation, or cooperative,” he said.
One-stop shop for entrepreneurs
PBR particularly is a web-based system that serves as a one-stop shop for entrepreneurs who need to transact with several agencies to be able to start operating a business. Each of the agencies’ computerized registration systems will be interlinked so that applicants need not physically go to each agency to register their businesses.
Domingo said that if the changes come in time for the survey period, this will be a big improvement in the country’s ranking if it is accepted by various agencies as compliant.
“We are committed to sustaining the momentum to achieve improved competitiveness and encourage inclusive growth. This ties in nicely as well with our role to boost the development of micro, small and medium enterprises (MSMEs). These reforms will motivate SMEs to incorporate when they see the need to do so, as they start or run their businesses,” he said.
In discussing the simplified processes, NCC Co-Chairman Guillermo M. Luz said, “The new steps will be rolled out initially tomorrow in the National Capital Region.”
He said the problem areas in global rankings are starting a business and paying taxes. He said that from 16 steps and 34 days, “We started to merge some steps, eliminating steps that are not necessary (and have) brought it down to six steps and eight days”.
“These game changers are effective beginning this month in the head offices of the partner
agencies and Quezon City and will soon spread across the country,” he said.
“These two sets of reforms are part of a broader game plan that the Philippines, already recognized as the most improved economy in major competitiveness reports over the last four years, will be implementing as we continue to introduce changes and improvements,” Luz added.
A full brief of the reforms, as well as the corresponding legal documents supporting the new policies, can be found on the websites of all partner agencies in the Ease of Doing Business initiative in the country.