Local digitalization deemed critical to achieving upper middle-income status

REGULATORY REFORM centered on digitizing at the local level should be the focus areas in bringing the Philippines to upper middle-income status, officials said.

Speaking at the Makati Business Club’s Business-Government Forum on Tuesday, Ernesto V. Perez, director general of the Anti-Red Tape Authority, said innovation at the local government unit (LGU) level is key to improving the ease of doing business and expanding the tax base.

“To really develop the economy, we have to prioritize innovation at the local level because this is where businesses start,” he said.

Mr. Perez cited the rollout of the Electronic Business One-Stop Shop (eBOSS), a platform that streamlines and digitalizes business registration and related processes in LGUs.

He said the system encourages voluntary compliance by making it easier for enterprises to register and pay the correct taxes.

Mr. Perez said LGUs that have implemented eBOSS show substantial increases in both revenue collection and business registrations.

“When businessmen know that it is easier for them to register their business, and at the same time they can not engage in business illegally without being caught, then they will voluntarily register their business,” he added.

However, Mr. Perez said adoption remains limited, with only a fraction of the 1,642 LGUs having fully complied with or integrated the system.

He said scaling up implementation would require collaboration with the private sector.

“The problem is huge. We cannot cover the entire country on our own. By partnering with the private sector, we are able to tackle the problem,” he said.

Meanwhile, acting Budget Secretary Rolando U. Toledo said fiscal consolidation and sustained infrastructure spending will be critical to achieving income targets.

“One of the indicators that we are looking at is how we are going to implement our fiscal consolidation strategy,” he said.

Mr. Toledo said the government is monitoring growth trends and the debt-to-GDP ratio as part of its strategy.

He said the government is also seeking to improve investment in infrastructure projects, which he said will boost the economy and employment. 

“This actually has a multiplier effect not only in terms of the growth of the economy, but also in job generation,” Mr. Toledo said. — Vonn Andrei E. Villamiel