transaction costs and flows working group (tcf-wg)

NATIONAL COMPETITIVENESS COUNCIL

Transaction Costs and Flows Working Group (TCF-WG)

DAVID L. BALANGUEDAVID L. BALANGUEPrivate Sector Champion, NCC-TCF25 October 2007


Muntinlupa City – steady rise in business permits and local taxes from 2003 after reducing the number of steps in business permit process

Ormoc City – 85% increase in income from business permits from PhP 23.067M (2005) to PhP 42.667M (2006) after streamlining its business permit/license process

Marikina City – Businessmen are pleased with the convenience and speed of the Marikina Business One Stop Shop (BOSS)

Cabuyao – revenue rose to PhP189.95M (2005) from PhP5.34M (1995) brought by the efficiency of its BOSS

Application of the One-day registration process: SSS (employer registration), BIR (TIN and VAT) and Philhealth

DTI shortened processing time for business name registration from 1 week to 1 day

… and the number is increasing… the list is expanding

GOODGOOD NEWSNEWS

Transaction Costs and Flows Working Group


PRIORITY AGENDA

PROJECTS STATUS and ACCOMPLISHMENTS

METRICS / INDICATORS ADDRESSED

1.Improve the procedures for the entry and exit of business persons (Private Sector (Private Sector Partners: Foreign Partners: Foreign Chambers, MBC Chambers, MBC and PCCI)and PCCI)

• ACR-ICard implementation

Validity period extended from 1 yr to 5 yrs

Comparable with ASEAN

• Ease of Visa Application

• Pre-approved Visa Upon Arrival-MOA between BOI and BI signed last 25 April 2007 (good for 30 days)

• Pro-Investment Visa – BI released MC No. MCL 07-001 last 1 August 2007 (good for 6 months extendible to a max of 3 yrs)

• Modernization of the Immigration Law

Bills filed in both Houses



PRIORITY AGENDA



2. Enhance the procedures for the entry and exit of goods (Private Sector (Private Sector Partners: PUCI, Partners: PUCI, Philexport)Philexport)

• X-ray machines for inspection of goods (import/export)

• Deployed to all major ports

• BOC reduced the fees for the use of the X-ray machines ($5 for 20 TEU and $10 for 40 TEU).

Comparable with ASEAN

• National Single Electronic Window (NSEW)

• 1st National Single Window Summit last 7-8 August last 2007

• On-going pilot testing of import clearance processes.

• Pilot NSEW linkage with Korea and Thailand to be conducted in the 4th Qtr of 2007



PRIORITY AGENDA



3. Improve Processes in Business Operation (Starting A Business, Registering Property, and Securing Licenses) (Private Sector (Private Sector Partners: PCCI, Partners: PCCI, MAP, AIM, GTZ, MAP, AIM, GTZ, IFC-WB)IFC-WB)

• Consistency of Business Rules at the National and Local Levels

Finished road tour activities for 20 LGUs; on-going consolidation/ assessment of data and submission of preliminary reports to the participating LGUs

Top 1/3 of WB Doing Business Survey

• Costs of Starting a Business

• Dealing with Licenses

• Protecting Investors

• Closing a Business

• Simplification of Procedures

• Anti-Red Tape Measures • already implemented

by NGAs/LGUs • PBR Kick-off event on

30 August; on-going system design development

• One Stop Shop• Strengthening of the

NERBAC in the regions• Investor issues and

Concerns (I/C) Handling • NCC-TCF Private

Sector Co-Champion for I/C handling

• Investment Ombudsman

• IPU Network


NATIONAL COMPETITIVENESS COUNCILTransaction Costs and Flows Working GroupStep Procedures

(Starting a Business per WB Doing Business Survey 2008)

Time to Complete

Agency Agency Commitments (Pre-Summit Workshop last

19 October 2007)

Impact on the number

of days

1 Obtain bank certificate of deposit of paid-in capital

1 day 1

2 Verify the availability of the company name with the SEC

1 day SEC 1

3 Register incorporation with the SEC 3 days SEC deduction of 1 day 2

4 Obtain Community Tax Certificate 1 day LGU For review and further study under Project 3.1 of NCC-TCF in coordination with IFC-WB, AIM and the respective LGUs

1

5 Apply for a Barangay Clearance 2 days LGU 2

6 Obtains mayor's permit/municipal license to operate at the Licensing Section of the Mayor's Office

11 days LGU 11

7 Receive inspection from the Mayor's Office 5 days LGU 5

8 Buy inspection books of account at bookstore 1 day BIR For review and further streamlining. However, the 14 days allocated for step 12 can already be removed in the list

1

9 Register for VAT 2 days BIR 2

10 Payment of documentary stamp taxes 1 day BIR 1

11 Obtain the Authority to print receipt/invoices with the BIR

1 day BIR 1

12 Print receipts and invoices at the print shops accredited by the BIR

14 days BIR Accredited Printers

0

13 Submit receipts and invoices to the BIR for approval, have receipts/invoices and books of accounts stamped by BIR

1 day BIR 1

14 Register with the SSS 1 week SSS Already implementing the 1- day processing (SSS, Philhealth and Pag-ibig) which will be eliminated when connected to PBR

1

15 Register with Philippine Health Insurance Company (PHIC)

1 week PHIC 1

15 TOTAL (per Doing Business 2008) 58 days Target without the PBR 31 days


DTI

SEC

CDA

LGU BIR SSS PHILHEALTH PAG-IBIG

Typical Process on how a businessman register his Business

From DTI

SEC = 3 days

CDA

xx days 20 days 5 days 5 days 5 days

To 12 days (Streamlined)

DTI

SEC = 3 days

CDA

1 day 5 days 1 day 1 day 1 day

9 days

USING PBR 3 days 1 day 5 days 0 day 0 day 0 day

BUSINESSMAN

(Target)

Source: PBR-Project Management Unit


PRIORITY AGENDA



4. Institutionalize the regulatory impact assessment (RIA) on existing/new government requirements (Private Sector (Private Sector Partners: AIM, ADB, Partners: AIM, ADB, GTZ) GTZ)

• Initial implementation of RIA in selected NGAs

On-going review and preparation of conceptual framework

Improvements on• Costs of Starting a

Business

• Dealing with Licenses

• Protecting Investors

• Paying Taxes

• Enforcing Contracts

• Closing a Business

5.Streamlining of incentive benefits (Private (Private Sector Partners: Sector Partners: PCCI, MBC, Foreign PCCI, MBC, Foreign Chambers, IFC-WB)Chambers, IFC-WB)

• Harmonization of incentives package

NCC/IFC conducted roundtable discussions that brought together the thought leaders from the private sector and academe.

Total Package



MOVING FORWARD 1. Improve the procedures for the entry and exit of

business persons

Passage of the Immigration Bill into Law Monitoring and further enhancement of the Pre-Approved

Visa Upon Arrival and Pro-Investment Visa.

2.Enhance the procedures for the entry and exit of goods

Full implementation of the guidelines for X-Ray machines Expedite the implementation of the NSEW



MOVING FORWARD 3. Improve process in business operation (Starting a

Business, Registering Property, and Securing Licenses) Adoption of best practices from the IFC/WB study in the NGAs/LGUs PBR Implementation IPU Network linking with NERBAC Operationalization of the NCC-TCF Private Sector Co-Champion and the

Office of Investment Ombudsman (OIO)

4. Institutionalize the regulatory impact assessment (RIA) on existing new government requirements Development and implementation of the RIA Work plan

5. Streamlining of Incentive Benefits Review/approval of draft Framework of Incentives to be done by

appropriate private & public sector agency/s Recommend amendments on the harmonization of incentives



THANK YOUTHANK YOU

NATIONAL COMPETITIVENESS COUNCILTransaction Costs and Flows Working Group

transaction costs and flows working group (tcf-wg)

Documents