Doing it online

The World Bank recently announced that it is collecting new data on the impact of COVID-19 for entrepreneurs.

The Doing Business Survey, which each year ranks countries in terms of ease of doing business using certain parameters, this time will assess the effect of COVID-19 and the measures taken by governments to respond to the challenges posed by the pandemic.

In the area of starting a business, the research will analyze how the pandemic is impacting the services provided by the company registry, which in the case of the Philippines will be the Securities and Exchange Commission, and how governments are addressing challenges for new entrepreneurs.

The WB noted that in some economies in lockdown, business registries are restricting access, changing work hours or even closing their doors for some time. In other economies suffering from the pandemic, online services are offered to incorporate and operate a new business.

It has been observed that around the world, the pandemic has led to a reduction of issuance of for building permits as the authorities are either in weeks-long lockdowns or have limited their efforts to emergency operations. The survey will look into the operational status of the permitting authorities and measure if the government has enacted any restrictions to construction activities during the outbreak.

In terms of getting electricity, especially in Europe, Asia, and the Middle East, the WB pointed out that electricity distribution utilities and electricity regulators have had to change their modes of operation as a result of the global pandemic: i.e. limiting the number of personnel working on the ground, limiting services to essential repair works, postponing non-critical upgrades, as well as offering lenient payment plans to customers.

Another area that will be looked into by the research would be in the area of registering property by assessing the initiatives taken by governments to ensure business continuity of the Land Registry and the Cadastre, whether business hours have been altered or whether a national contingency plan is in place to ensure business continuity, and whether governments have taken steps to facilitate land transactions during the crisis -- such as enforcing the use of online platforms to submit applications to register property or offering lower interest rates to encourage land transactions.

The research will also include how the pandemic has affected access to credit, as well as the rights of borrowers and secured creditors, what changes have been made in the law in terms of protecting borrowers and facilitating lending activity, which may include expanding the pool of assets used as collateral, and imposing moratoriums on both in court and out of court enforcement of claims, as well as the operations of a collateral registry during the pandemic.

In terms of  tax payments, which will be another parameter that will be used for the survey, the WB noted that governments around the world are implementing tax relief measures to address the problem of liquidity for households and businesses during the crisis. The survey will look into the relief measures per tax category and per types of action undertaken, which may include extension of deadlines, reduction in rates, suspension of tax audits, waiver of late payment surcharges and interest, among others.

The new Doing Business Survey will also monitor how the pandemic has affected the services provided by the tax administrations globally in terms of reduction or extension of office hours, shifting functions to online, to name a few.

Other areas that will be covered by the survey include trading across borders or how the outbreak has impacted the process of exporting or importing goods in an economy, enforcing contracts -- including how the courts continued to operate during the pandemic, resolving insolvency  --including how the crisis engendered instruments to prevent premature bankruptcies of healthy companies, and the public procurement process.

I think we are going to do very well in this survey in many areas.

For instance, last Jan. 28, the Anti-Red Tape Authority (ARTA) and the Department of Information and Communications Technology (DICT) were joined by several government agencies, including the SEC, the BIR, the Social Security System, PhilHealth, PagIBIG Fund, the Food and Drug Administration, and 18 pilot local government units, during the launch of the first phase of the Central Business Portal (CBP), an online one-stop shop for registering business in the Philippines.

The CBP offers a single site for all business-related information and transactions such as securing business permits, licenses, and clearances. Its creation through the DICT was mandated by RA 11032 or the Ease of Doing Business Act and ARTA is tasked to oversee its implementation.

ARTA chief Jeremiah Belgica expects that the implementation of the CBP will improve the country’s performance in the Starting a Business indicator under the WB’s Doing Business Report. In the 2020 report, the Philippines ranked 171stamong 190 economies in the said indicator, which measures the number of procedures, time, cost, and capital requirement for a small to medium-sized limited liability company to start up and formally operate.

Belgica said that through the CBP, business applicants can now register their business in just one step in less than a day, as compared to the previous manual process which involved 13 steps that could be completed in 33 days. Once the CBP is fully implemented, he expects the country’s ranking in the said indicator to jump up to the 7th rank.

Belgica earlier said that the Philippines has already jumped from 124 to 95 in the World Bank Ease of Doing Business ranking. He is confident that by the end of President Duterte’s term, the country will be part of the top 40 percent of the 190 countries participating in the survey.

The portal provides a unified application form for all agencies involved in the business registration process, thus eliminating the undue burden on applicants of having to fill up redundant entry forms with different agencies. It also allows applicants to complete their business registration with SEC and BIR, generate TIN, pay for BIR filing and registration fees, and register employer numbers for SSS, Pag-IBIG and PhilHealth; a Unified Employee Reporting Module for SSS, PhilHealth, and Pag-IBIG, and process applications for secondary license (FDA).

More importantly, the CBP now links to the online business permitting of the LGUs of Quezon City, Paranaque, Ilagan City, Baler, Dipaculao, Limay, Macabebe, Paete, Santa Cruz in Marinduque, Labo, Santa Barbara in Iloilo, Mandaue City, Dumingag, Catarman and Kabacan. Belgica hopes that other LGUs will be integrated in the future.

While the CBP was not specifically designed as a COVID-19 response, it is very helpful especially now that our government agencies have observed increased business registrations as more and more Filipinos became entreprenuers, many with online presence.

For sole proprietorships, the Department of Trade Industry has an online business name registration system, which according to Secretary Mon Lopez, allows entrepreneurs to finish the entire registration process within eight minutes.

As the quarantine eases, we do not expect online registration of businesses to go away as people have found it much more convenient and safer. We hope that all government transactions can be accomplished 100 percent online, eliminating  not only red tape, but also corruption.

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