Project Design

Harmonisation of Donor Support for Streamlining Business Registration, Philippines, 2006

    The SME Development Plan 2004-2010 is a good example of how donors contributed to the formulation and implementation of a national priority program following the principles of the Paris declaration.

    In 2003, the Department of Trade and Industry (DTI), with support from the Japan International Cooperation Agency (JICA), called on the public and private sectors, and donor organizations to draw the blueprint for SME Development. A series of workshops led to the identification of 48 activities enshrined in the SME Development Plan. In 2005, with the support of Germany's development assistance agency GTZ, DTI produced the Small and Medium Enterprise Development (SMED) Results Chain, which streamlined activities and reduced them to 10 feasible Activity Groups (AGs).

    In preparation for the Philippine Development Forum, DTI and donors decided to formalize the SME Donor Groups as one sub-group of the Growth and Investment Climate Group (GICC). DTI Undersecretary Alonzo assumed the leadership as chair of the sub-group. At the Philippines Development Forum in March 2006 the DTI Secretary Peter Favila announced that streamlining of business licensing would be a major focus for government and donors actions over the course of the next year in order to contribute to improving the investment climate and thereby SME development.

    The Tagaytay announcement was driven through the work of the SME Donors' Group, which noted that streamlining the process for business registration can have a significant impact on improving the business climate for SMEs. In 2005, business registration in the Philippines took 48 days with 11 steps or procedures; in most developed countries, it takes only two to seven days with two to eight steps or procedures. Many studies and empirical evidence show that simplifying business registration procedures can have big impact on economic growth. Based on World Bank reports, business creation increased as a result of simplifying business registration in Egypt by 50%, Vietnam by 28% and Pakistan by 19%.

    The documents on the right hand side outline the current plans for Government and donors to work together, focusing on streamlining business registration at the local level.