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Cutting the Red Tape: The Cost of Regulatory Compliance for Small and Medium Enterprises in the Phil

Posted: 2019-11-29


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The Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness (AIM RSN PCC) in partnership with the Konrad-Adenauer-Stiftung (KAS) Philippines, conducted a public forum entitled, “The Cost of Regulatory Compliance for Small and Medium Enterprises (SMEs) in the Philippines” last November 28, 2019 at Discovery Primea, Makati City. The forum presented the results of the 2019 AIM RSN PCC survey on the cost of regulatory compliance among SMEs. Further, it provided a venue for SME practitioners, academics, support organizations, and policymakers to come together and discuss various issues and solutions in improving the regulatory environment and ease of doing business in the Philippines.

Dr. Stefan Jost, the Philippine Country Director of KAS, formally opened the forum by reiterating the importance of SMEs in boosting inclusive economic growth. Ms. Farida Laside Adji, Senior Private Sector Specialist at the World Bank, provided the keynote address. Her presentation centered on three themes: 1) importance of SMEs in promoting inclusive growth in the Philippines and in ASEAN; 2) comparison of the Philippines’ ease of doing business environment in relation to other ASEAN countries; and 3) proposed actions and reforms which the Philippines can adopt for better business regulatory environment.

Dr. Jamil Paolo Francisco, the Executive Director of AIM RSN PCC, and Ms. Georgina Gonzales, consultant of AIM RSN PCC, presented the results of the Center’s Survey on the Cost of Regulatory Compliance for SMEs in the Philippines. Results suggest that majority of SMEs perceive regulatory compliance as a pressing concern at the beginning of their businesses. Local business permits and BIR registration were deemed as the most burdensome for most SMEs, especially at startup phase. The survey results presentation was then followed by a panel discussion composed of SME practitioners and representatives from organizations that assist small businesses. The discussants were Ms. Renea Tan, a consultant of the Philippine Center for Entrepreneurship - Go Negosyo, Ms. Aleli Bawagan, Director of the University of the Philippines Institute for Small Scale Industries, and SME owners Ms. Florence Yu, Mr. Gerardo Ramos, and Mr. Clarke Nebrao. The discussion was moderated by Dr. Francisco.

The afternoon session was opened by Ms. Alicia Opena of the Department of Trade and Industry - Bureau of Micro, Small, and Medium Enterprises. She outlined some of the programs of DTI in helping MSMEs in the Philippines. She particularly highlighted the recently passed Ease of Doing Business Law (RA 11032) that aims to provide a more efficient service delivery, curtail graft and corruption, reduce red tape, and expedite government transactions. Her presentation was followed by Atty. Ernesto Perez, the Deputy Director General of the Anti-Red Tape Authority (ARTA). He focused his discussions on further elaborating the reforms embedded in RA 11032 and ARTA (or Better Regulations Office) as the leading agency in implementing the law. The fnal presenter was Mr. Joseph Louie Limkin, Director at the Strategy, Economics, and Results Group of the Department of Finance. He presented the package 2 of the Comprehensive Tax Reform Program (CITIRA) of the current administration. He emphasized that CITIRA offers more competitive fiscal incentives that are based on merit and performance. After the presentations, an open forum was moderated by Dr. Tristan Canare, Associate Director and Senior Economist at the AIM RSN PCC.



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