Improving ease of doing business in the Philippines

Earlier this month the World Bank released its Ease of Doing Business rankings. For the third year in a row New Zealand came in at number one. One of the important measures that constitute this ranking is the time it takes to start a business. New Zealand has been the top ranked country in the world on this measure for over a decade. I wanted to use this column to highlight how New Zealand is using our experience to help improve the business registration process in the Philippines.

In September 2016, I called on Ramon Lopez, the Secretary of Trade and Industry and said as the Ambassador of a small friendly country I wanted to identify one item in the new Administration’s agenda where New Zealand could make a difference.  We agreed that “improving the ease of doing business” was an issue on which we could collaborate. 

I am delighted to say that two years after our conversation, considerable progress has been made. It would not have been possible without the willingness of the Department of Trade and Industry, supported by the National Competitiveness Council, to be trail blazers.  

We started the New Zealand-Philippines Ease of Doing Business journey with a pilot scoping study developed by my government’s G2G Partnerships Office that aimed to help us better understand the business registration and licensing system here. To do this, we brought in public sector innovation experts from Creative HQ, a New Zealand local government innovation hub, to conduct a study with agencies, business people, and citizens across Metro Manila, Cebu and Davao. 

After the scoping study, the Department of Trade and Industry procured Creative HQ’s services to help develop solutions for improving business registration process in the Philippines. This project has not been about imposing New Zealand’s system in the Philippines, but about combining New Zealand’s experience with the creative talent of young Filipinos to improve the business environment in this country. At the core of this approach is a changed mindset, one that treats citizens as customers, not taxpayers. An important element in the project is the method by which solutions are developed. One of the recommendations from the scoping study was to create an end-to-end mobile registration system using a series of three “Design Sprints.”

Design Sprints originated at Google Ventures as a way of focusing on developing products. A Design Sprint is undertaken over five days and brings together a multidisciplinary team of seven people, assisted by facilitators to develop a realistic prototype to address a particular problem. Design Sprints bring together stakeholders from different backgrounds, such as government and private sector, to work collaboratively in defining the problem and developing a solution.  

All three Design Sprints have now been completed. The first sprint produced an online portal for Local Government Unit requirements for business registration. This created a one stop shop where anyone can go and find out the business registration regulations and application processes of their Local Government Unit. The Department of Interior and Local Government provided valuable support for this initiative. 

The second sprint focused on the creation of a Philippine Business Number. This single number will be used as a reference number to link the different numbers given by each government agency (e.g. the SEC, BIR, SSS, PhilHealth, DTI). Using only one number greatly simplifies a business’s interactions with government agencies.

The third sprint created a prototype of a smartphone App for end-to-end business registration. It is expected that the standard time for someone to complete business registration using the App would be less than one hour.

In particular the development of the App is a good example of how a unique Philippine solution has been developed. In New Zealand business registration is undertaken through a website, since most people in New Zealand own a laptop. But in the Philippines it is the smartphone that dominates. To make this easier for small and medium enterprises, people need to be able to complete business registration on a smartphone.

Taken together these three prototypes have the potential, if implemented fully, to complement the Ease of Doing Business and Efficient Government Service Delivery Act.  Reforms of this nature will go a long way to improve the investment climate of the Philippines.

Perhaps more importantly, by making business processes more accessible to ordinary citizens and embracing new technology, it will break down bureaucratic obstacles and unleash the potential of younger generation Filipinos who have so much to offer this country. This project has proven that Design Sprints work well in the Philippines and can be used to create break through improvements in the public sector. For me, it is also a template example of co-creation in government services; how two governments can work together in a high-impact manner through sharing of resources to deliver change.

(David Strachan is the New Zealand Ambassador.)