Starting a Business: The 2014 Doing Business Report

When talk of the ASEAN integration is rife, one wonders how ready the Philippines is for 2015. The 2014 report of the World Bank on Doing Business gives a good indication of how the country compares with its Asian neighbors, at least.

In June 2013, a study on the number of procedures, time and cost spent by a small and medium size company to start and operate shows that firms in the Philippines generally go through 15 steps and take around 35 days to complete all the processes. Among the 189 countries studied, the Philippines ranked 170th in ease of starting a business.

To put that in proper context, we need to compare its performance with East Asia and the Pacific (i.e., Singapore, Hong Kong, Malaysia, China, Vietnam, Thailand, and 19 other economies).

East Asia in general takes 38 days to complete the business registration. This is three days more than what a Philippine firm takes. However, there are only seven steps involved in East Asia, which is almost half of the steps taken by a registrant firm in the Philippines.

When measured in terms of how businesses start, the Philippines has been earning scores in the 60s (out of a best of 100) from 2006 to 2014. In comparison, Indonesia’s improvement in rating all these years has been more obvious (See Table below).


Economy DB 2006 DB 2008 DB 2010 DB 2012 DB 2014
Philippines 61.88 61.61 63.07 64.69 65
Indonesia 40.71 46.03 62.54 68.44 69.19
Singapore 89.76 91.78 95.9 95.91 95.92
*DB - Doing Business
Source: The International Finance Corp and World Bank's Doing Business 2014 Report.


Clearly, the Philippines has something to learn from Indonesia, and from nations that had been getting consistently high grades for the past nine years such as Singapore.

Rather than sit back and see how things unfold, we can start learning from and improving on our neighbor’s best practices. Of the suggestions raised by the report, let’s touch on at least two.


When One-Stop Business Shops Work Beautifully

Successful countries demonstrate how their varied and multi-functional agencies can come and work together. Thus, one-stop shops offer services beyond business registrations.     After all, after registering their business, firms still need to process their tax- and labor-related formalities, for example.

Aside from the traditional one-stop shop model—a physical site where various agencies are represented per booth or area—there is the single electronic platform for entrepreneurs already in place in other nations such as New Zealand. The advantage? Well, in simple terms, this single platform saves business startups extra time, effort and money. (Not to mention, make agencies synergize their functions and cut on their redundant tasks).


Single Company ID: Key to Cross-Agency Coordination

Countries such as Malaysia and Singapore boast of their single company IDs. Business processing gets easier when a company, through one single ID number, is recognized by all government agencies. A single ID makes it easier—and therefore faster—for agencies to validate and cross-check information.

So, is there any luck for the country to further enhance its start-a-business process before 2015 comes in? I still hold onto the belief that certain government agencies and officials can. I guess it now boils down to which agency head or city/municipal official can prove that he can effectively put the needed mechanisms in place—at least in the next six months.

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