Ease of doing business: Movement of goods and services
Business Mirror
May 18, 2016
BASED on the country?s performance in 2015, World Bank Doing Business Report 2016 shows the decline in ranking of the Philippines, from 95th to 103rd among 189 countries in the world. The decline was due to slow reforms made by the Philippines compared to what have been implemented by other countries.
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The 2016 report shows the country was only able to introduce one improvement: To expedite the process of issuing an employer-registration number by streamlining the communication between the Securities and Exchange Commission and the Social Security System.
Inefficient processes, unnecessary bureaucracy, redundant documentary requirements, exorbitant fees by some regulatory agencies, and lack of infrastructure that add to the cost of the operation of a business are some of the factors that affect the ease of doing business in the country.
For instance, producers of food products say it will take three months to get a License to Operate (LTO) and Certificate of Product Registration (CPR) from the Food and Drug Administration (FDA). According to the FDA, such delays were caused by the lack of personnel and infrastructure and the centralized processing of LTO and CPR. The FDA issued Guidelines on the Unified Licensing Requirements and Procedures, but improvements in the process have yet to be seen by the stakeholders. Automation and review of documentary requirements to expedite the process anticipated for years by the stakeholders also need to be taken into consideration by the FDA.
Another issue is the license and permit requirements of the Philippine National Police (PNP) on controlled chemicals. A manufacturer who imports chemicals as raw materials to produce products for either local distribution or export has to secure a license to manufacture, a permit to import and a permit to unload, and needs a police escort to transport the imported chemical from the port to his warehouse. It takes one ?to three months for the PNP to issue the license and a considerable time to issue the permits. However, with the cooperation of the stakeholders with the PNP, streamlining this process is being crafted through the proposed Implementing Rules and Regulations (IRR) of Republic Act (RA) 9516, which governs the explosives and controlled chemicals. ?The proposed IRR is now awaiting the approval of the secretary of the Department of the Interior and Local Government.
Moreover, the government has taken the following measures to improve the movement of goods in the country: 1) Presidential Executive Order (EO) 204 in March 2016, expanding the coverage of EO 170 (series 2003) and EO 170-A (series 2003) to include container-chassis roll-on, roll-off (Cha-ro). When implemented, the EO will lower transport cost by at least 15 percent to 20 percent, primarily because the prime mover is not required to travel with the chassis-mounted container onto/from the Ro-ro ships; 2) Foreign Co-Loading Act, which was approved in July 2015, allows foreign vessels to dock at any Philippine port for loading and unloading of foreign cargoes. This reduces logistics costs and provides transshipment services needed by exporters and importers that lead to competitive pricing of goods.
Recently, the government partnered with supply-chain stakeholders to initiate projects to facilitate movement of goods from and into Manila port, e.g., Terminal Appointment Booking System), an electronic platform for booking containers in the major international ports of Manila, to minimize road traffic and prevent container buildup payment facilities, which operate only until 8 p.m., and difference in the storage fee of port operators.
Given the issues and initiatives, there are still rooms for improvement to facilitate trade in the country. The government has to take radical actions in advocating reforms that will promote competitiveness and growth of Philippine enterprises. specifically the micro, small and medium enterprises. Particularly, infrastructure projects, which help keep countries reach their economic potential, must be prioritized by the government. Such reforms will make the Philippines catch up with other countries, particularly among other member-economies of the Asean, in taking advantage of the Asean Economic Integration.?