Simplify it

First, the good news. We can get an additional P5 billion to P10 billion worth of new investments annually if we adopt simpler rules and regulations for businesses, according to the World Bank.

The multilateral agency tells us that cumbersome rules and regulations cost businesses P100 billion in opportunity costs and P40 billion worth of foregone investments.

If we simplify business regulations, then we can unleash the potential of the private sector that is an important partner of government in achieving inclusive growth.

Cumbersome business regulations limit the growth of innovative entrepreneurship and investments and contribute to the growth of the informal economy. They also keep the country from creating more and better jobs that can reduce poverty at a faster rate.

Cumbersome regulations affect small and medium enterprises the most since they must pay P21,000 to P45,000 worth of legitimate fees annually. Small businesses also find it necessary to pay bribes just to obtain various permits and licenses, thus adding to their business costs.

In the 2016 Doing Business Ranking of the World Bank, the Philippines slipped six notches to 103rd out of 189 economies, from 97th in 2015. Singapore retained its No. 1 ranking for the 10th consecutive year, while Hong Kong maintained is fifth ranking overall.

The Philippine Statistics Authority (PSA) reported recently that approved foreign and local investments reached P90 billion in the second quarter of 2015, representing a decrease of 65.1 percent from last year’s P257.8 billion. This should prod our economic managers to review the rules for doing business in the country, because we may be driving away investors instead of attracting them.


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