EDITORIAL - Three steps in three days

If the Department of Trade and Industry can make good on its promise to drastically cut the steps and processing time for starting a business, it would be a welcome parting achievement for the outgoing administration.

Adrian Cristobal Jr., who heads the DTI in the final six months of the Aquino administration, told businessmen in Bulacan over the weekend that the government intended to cut the steps in starting a business to just three from the current average of 16, consequently reducing the processing time from 34 days to just three.

The move supports a goal set by the National Competitiveness Council for making it easier to do business in the Philippines. While there have been improvements in the past five years, the country continues to lag behind several other Southeast Asian nations in terms of ease in doing business.

In the 2015 Doing Business Report prepared by the World Bank Group, the Philippines ranked 103rd overall among 189 economies. It garnered the lowest rating, placing 165th, in terms of ease in starting a business, behind even Iraq which ranked 154th in this aspect.

Never mind perennial top performer Singapore, which again ranked as the easiest place in the world to do business. In Southeast Asia, Malaysia ranked 18th overall, requiring only three steps in five days to start a business. In Thailand, which ranked 49th, it takes four steps in 27 days, while in Vietnam, which placed 90th, the process takes 10 steps in 34 days.

Foreign investors have been calling for years for institutional reforms that will facilitate doing business in the Philippines. The processes are circuitous and many requirements are redundant, with every imaginable fee collected at each layer of red tape, from national government agencies to local government units all the way down to the barangay level. In Metro Manila, where opening certain streets in gated villages can dramatically ease traffic flow, budding micro and small entrepreneurs must also pay various types of fees, mostly unregulated by the government, to homeowners’ associations.

Calls to cut red tape are not new, with investors pointing out that the rules are simpler and doing business is easier in neighboring countries. So the announcement of the new DTI chief is a welcome development. He should prove wrong the skeptics who say that three steps in three days is too good to be true.