The need for principle-based regulatory practice

DEALING with government agencies is one of the pain points that many Filipinos struggle with because of the historical difficulty (and for some notoriety) of government offices. It is nothing new for Filipinos to see long lines (actual or virtual), slow or delayed processing, repetitive or redundant requirements, and condescending government employees at times.

The problem of bureaucracy is one that needs to be addressed with a whole-of-nation approach with much urgency. The efforts, I believe, should go beyond reformatting or restructuring processes and policies, but they should primarily include changing the culture and systemic mindsets and assumptions within the regulators.

The talks on opening constitutional provisions to accommodate more investments and capital from foreign entities need to take into consideration of the current difficulties of those already allowed to do business and invest in the country. Otherwise, inviting and opening the economy to new foreign players who were formerly barred from investing might not give us the desired economic outcome as red tape and bureaucratic inefficiency strangle the capital and business industries, but now with the new investors as its new hostages.

The point is that there needs to be housecleaning and reordering before calling for a party (if ever there would be one). To get the party of reforming the bureaucracy started, there needs to be basic principles and concepts that each regulator and regulatory agency needs to know and apply in their regulatory work. These principles should guide regulators in the formulation and implementation of any policy, process and requirement upon the transacting public.

This is not to say that regulators, in order to be qualified to work, must first have a degree in regulatory management and reform, but it does mean that every regulator must at least have a good grasp and knowledge of the fundamental principles of what makes a good regulation. Not everyone who plays basketball needs to be a Michael Jordan or Lebron James, but one should at least know how to dribble, pass, shoot, defend and know the basic rules in order to play the game.

This brings me to my point that many do not know that these basic and fundamental principles for good regulations do exist here in the Philippines. The Philippine Good Regulatory Principles (PGRP) provides supplementary guidance to government agencies covered by Section 3 of RA 11032 and to businesses and other regulated entities on how they should regulate and expect to be regulated.

The PGRP is a product of the Anti-Red Tape Authority’s memorandum of understanding with the United Kingdom Foreign, Commonwealth and Development Office and the UK Department of Business, Energy and Industrial Strategy signed in February 2020.

Today, these principles are required to be known and understood by all regulatory agencies — well, at least ideally, they should know it by heart.

These principles are universally accepted and internationally practiced and tested in different economies and governments, but at the same time is contextualized to fit in with the context of the Philippines.

It provides understandable and uncomplicated guidance to comply with the streamlining and reengineering requirements of the government, especially RA 11032, or the “Ease of Doing Business Law,” and is inspired and aligned with the Asean and OECD Good Regulatory Principles and even the UK Regulators’ Code.

Let me share these 10 Philippine Good Regulatory Principles:

– Principle 1: Clarity – Regulators should provide clarity in policy rationale, policy objectives/ goals, institutional frameworks and support mechanisms.

– Principle 2: Legal and empirical basis – Regulators should ensure that regulations have a sound legal and empirical basis to establish a need for new regulation and to only intervene in instances when evidence identifies an issue or a need for intervention.

– Principle 3: Benefits vs costs – Regulators should ensure that the regulations will accrue benefits that will justify the least costs, unintended effects, and negative impact on the economy, society, and the environment, among others.

– Principle 4: Assessment – Regulators should assess and consider all policy options, including nonregulatory interventions, through Regulatory Impact Assessment (RIA).

– Principle 5: Engagement – Regulators should ensure and sustain effective and inclusive stakeholder engagement.

– Principle 6: Coherence – Regulators should ensure that regulations should be congruent and consistent with other regulations to achieve policy coherence.

– Principle 7: Whole-of-government approach – Regulators must work together to support regulatory cooperation at all levels and support regular and continuous regulatory capacity development initiatives.

– Principle 8: Continuous evaluation – Regulators should subject regulations to regular review and evaluation for continued relevance, efficiency, and effectiveness and to keep pace with change from emerging technologies.

– Principle 9: Competition – Regulators must ensure that regulations are compatible with competition, trade and investmentfacilitation principles at both domestic and international levels.

– Principle 10: Risk management – Regulators should promote regulatory risk management at every stage of the decision-making process.

As stated in the ARTA manual on PGRP, these principles ensure a flexible and principles-based framework for regulatory rulemaking and delivery that supports government agencies in designing regulatory policies that best suit the needs of businesses and other regulated entities.

Accordingly, it serves as a guide for regulators to provide policies, procedures, organizational values, and behavioral and service standards expected of them so that businesses and other regulated entities understand what they should expect from those who regulate them. More importantly, the PGRP serves as a guide for businesses and other regulated entities so they can understand the set of principles that regulators should adhere to.

PGRP is part of the many required training materials and learnings for all agencies, and the ARTA, CSC and DAP are all working together with all national and local government entities to bring these principles into actualization in the field.

Now that we have these principles at hand, the only thing needed now for government agencies and people is to apply them and put them into practice.

James 1:22-24 said in the Bible: “Do not merely listen to the Word, and so deceive yourselves. Do what it says. Anyone who listens to the Word but does not do what it says is like someone who looks at his face in a mirror and, after looking at himself, goes away and immediately forgets what he looks like.”

As the PGRP is now part of the “Bible” of government regulators, everyone must likewise be mindful and careful to apply and practice these important principles.