Every country has business regulations that business owners and entrepreneurs must follow to avoid penalties and complaints.
At the recent launch of the 2016 Doing Business Survey in which the Philippines dropped to 103rd, the World Bank said that simplifying business regulations in the Philippines can attract new investments of at least P5-10 billion ($106.8 to $213.7 million).
Senior Economist of the World Bank Philippine Office Karl Kendrick Chua said “Business regulations tend to be cumbersome. They limit the growth of innovative entrepreneurship and investments, contribute to large scale informality which cover 75 per cent of employment and hence prevent the country from creating more and better jobs that can reduce poverty at a faster rate.”
He also said that simplifying business regulations would unleash the potential of the private sector, especially small and micro businesses, which are important contributors and beneficiaries of inclusive growth.
He added that an opportunity cost of around P40 billion ($854.8million) can arise from discouraged Filipinos who could have started a business if only the cost was reasonable.
According to a report from the World Bank’s Philippine Economic Update “They [business owners] not only have to pay legitimate fees between P21, 000 to P45, 000 a year when they open a business, they also spend a considerable amount of time moving from one agency to another and waiting in line to process their documents, often resulting in significant loss of productive time and income. In some instances, businesses report that they need to pay bribes or give gifts to obtain various permits and government services.”
The World Bank concluded that simplifying and streamlining the business registration process in the Philippines would not only support job generation but also improve transparency and accountability in the Government.