Europe-PH News

The European Chamber of Commerce of the Philippines (ECCP) is pushing for the rationalization of the registration process for foreign investments, noting that bottlenecks in such procedures dampen the country’s business climate.

European Chamber of Commerce of the Philippines Executive Director Henry J. Schumacher speaks to reporters at a summit in Makati in this photo taken April last year. -- BW File Photo

In a position paper submitted to the Senate and dated Aug. 18, ECCP Executive Director Henry J. Schumacher said: “We agree that the documentary requirements for registration and doing business by foreigners here in the country need to be streamlined.”

“The pervasive bureaucratic red tape persists to discourage and ward off potential investors,” Mr. Schumacher said.

“For instance, while we need to secure power generation plants, build energy capacity and foster competition, we are weighed down by compliance with 162 permits and signature of officials,” he noted.

He added that this “bureaucratic pathology has no social redeeming value” noting that it is only centered on rules, regulations and procedure.

Senator Paolo Benigno “Bam” A. Aquino IV backed this proposal, saying that there’s a need for a one-stop-shop that will administer the whole business registration process.

“We really need a ‘one-stop-shop’ or an overarching [body] to ensure the management of the whole process because if we will send them (investors) to each agency that has their own paces and queues, we are not making it easy for them. We want to make it easy for investors to come to the Philippines,” Mr. Aquino told BusinessWorld in an interview after Senate’s inquiry on the procedure of registration of foreign investments in the country last week.

The ECCP cited in its position paper the World Bank and International Finance Corp.’s Doing Business index for 2013, in which the Philippines ranked 138 out of 185 economies.

“The first top five criteria where the country ranked low were in starting a business, registration of property, paying of taxes, getting credit and protecting investors,” Mr. Schumacher quoted the report on the index.

He noted that business registration in the Philippines is a “slow process,” with corporations and partnerships required to register with the Securities and Exchange Commission (SEC), and, sole proprietorships, with the Department of Trade Industry (DTI).

“After the requisite registration, the investor is left with the other layers of requirements for the availment of the incentives under the pertinent laws,” he added.

Mr. Schumacher cited Uganda and Vietnam’s successful streamlining of business registration, which he said has attracted more business entrants to the local economy due to reduced costs.

It was in this context, Mr. Schumacher said, that the ECCP drafted a bill on the creation of the Office of Investor Facilitation and Protection, which will be considered as a Cabinet-level body that will protect the country’s investors.

According to the ECCP, the draft proposed measure will be pitched to Senator Sergio R. Osmeña III.

“Rest assured that we will support any action that shall streamline the maze of the myriad of documentary requirements, permits, endorsements, certificates, etc. And delays,” Mr. Schumacher noted.

Meanwhile, Mr. Aquino said the Senate will also look into the National Competitiveness Council’s (NCC) functions in line with business registration.

“I know that their (NCC) processes are mostly for the local. I am not sure if they have a version that also tackles the Bureau of Immigration and DoLE [Department of Labor and Employment] processes for foreign nationals. So we will take a look if they are also working on that or not,” Mr. Aquino said.

“But we are hoping that if an agency will focus on this, we can really come to a point where it is really more fun to do business in the Philippines. We will not make it hard for those investors who wanted to create jobs in the country,” he added.

Source: Business World, 27 August 2014