Ease of Doing Business Act 101

The Philippines’ ranking in the International Financial Corp’s (IFC) 2018 Ease of Doing Business Report dropped by 14 notches from 113 to 99 among the 190 covered countries.

The deterioration in the overall ranking happened despite the continuous efforts exerted by the government (spearheaded by the National Competitiveness Council) to improve on the various performance indicators.

Thus, the recent passage of the Ease of Doing Business (EODB) and Efficient Government Service Delivery Act of 2018 is very timely.

State policy

The Act declares that it is the policy of the State to promote the integrity, accountability, proper management of public affairs and public property as well as to establish effective practices, aimed at efficient turnaround of the delivery of government services and the prevention of graft and corruption in government.

Towards this end, the State shall maintain honesty and responsibility among its public officials and employees and shall take appropriate measures to promote transparency in transacting with the public. The measures shall include adoption of simplified requirements and procedures that will reduce red tape and expedite transactions in government.

Coverage

The Act shall apply to all government offices and agencies (GOAs), including local government units (LGUs), government-owned or -controlled corporations (GOCCs) and other government instrumentalities, whether located in the Philippines or abroad, that provide services covering business and nonbusiness related transactions.

All GOAs are required to post their respective Citizen’s Charter at the most conspicuous place in their offices as well as on their websites. Among the information to be included in the Charter are the following: checklist of requirements for each application or request, procedure to obtain a particular service, person responsible, maximum time to do the process, documents to be presented, fees and procedure for filing complaint.

Except during preliminary assessment of the request and evaluation of sufficiency of submitted requirements, no government officer or employee shall have any contact with the applicant, unless extremely necessary.

Time limit

All applications or requests shall be acted upon within the prescribed processing time stated in the Citizen’s Charter, which generally shall not exceed three working days for simple transactions and seven for complex ones.

The maximum time may be extended only once for the same number of days.

Appropriate working schedules shall be adopted to ensure that applicants or requesting parties within the government office premises during the official working hours are attended to and served during lunch break and after regular working hours.

Automatic approvals

If an application/request is not acted upon (approved or disapproved) within the pre- scribed processing time, the same shall be deemed approved, provided all required documents have been submitted and the applicable fees have been paid.

A single or unified business application form shall be used in processing applications for business permits/renewals which shall consolidate all the information required for local taxes, building clearance, sanitary permit, etc.

Similarly, other local clearances, such as sanitary permits, environmental and agricultural clearances, shall be issued together with the business permit.

A business one-stop shop (BOSS) shall be established within the Negosyo Center of each city/municipality to receive and process the application for business license, clearance, etc.

An electronic BOSS shall be set up within three years from the effectivity of the Act.

To eliminate bureaucratic red tape, avert graft and corrupt practices, promote transparency and sustain EODB, the Department of Information and Communications Technology (DICT) is designated to be primarily responsible for establishing, operating and maintaining a CBP or other similar technology.

The CBP shall serve as a central system to receive applications and capture data involving business-related transactions and may also provide links to the online registrations or application systems established by the national government agencies (NGAs).

PBD Bank

Within one year from the effectivity of the Act, the DICT, in coordination with the concerned agencies, shall establish, manage and maintain a PBD which shall provide the concerned NGAs and LGUs access to data and information of registered business entities for purposes of verifying the validity, existence of and other relevant information pertaining to business entities.

This means that documents already submitted by an applicant or requesting party to an agency with access to PBD shall no longer be required by other agencies, as they may be retrieved from the PBD.

Anti-Red Tape Authority

The Arta shall be created and organized within six months from the effectivity of the Act.

It shall be attached to the Office of the President and headed by a director general to be appointed by the President.

It shall have the following powers and functions, among others:

•Implement and oversee a national policy on antired tape and EODB.

•Implement initiatives to improve the EODB ranking of the country. •Monitor and evaluate the compliance of covered GOAs and issue notice of warning to erring/noncomplying government officials/employees.

•Initiate investigation, motu propio or upon receipt of a complaint, refer the same to the appropriate agency, or file cases for violations of the Act.

•Assist complainants in filing necessary cases.

The NCC shall be renamed and reorganized as the Ease of Doing Business and Anti-Red Tape Council (EODB and Arta Council). The Council, which shall be chaired by the secretary of the Department of Trade and Industry, shall be the policy and advisory body to the Arta. It shall formulate policies and programs that will continuously enhance and improve the country’s competitiveness and EODB.

Penalties

Erring government officials and employees shall be subject to penalties which include perpetual disqualification from holding public office, forfeiture of retirement benefits, fines ranging from P500,000 to P2,000,000, and imprisonment of one to six years.

Transition to automation

Within three years from the effectivity of the Act, the DICT shall, in coordination with the concerned GOAs, automate business-related transactions for better efficiency of services.

To monitor the implementation of the Act, a Congressional oversight committee on EODB shall be created with five members each from the Senate and the House of Representatives.

The committee shall exist for five years from the effectivity of the Act.

Moving forward

As can be gleaned from the above highlights of this long- awaited legislation, if it will be improperly implemented, transacting with the government agencies will be simpler, faster, cheaper and smoother. Convoluted processes, excessive requirements, long queues and waiting time, endless follow- ups and other frustrating situations should be a thing of the past.

If such dramatic changes would be accompanied by continuous improvements on the other areas where our country is lagging, enhancing competitiveness and EODB, third in the administration’s 10 point socioeconomic agenda, would not be far-fetched.

Hopefully, local investors will be encouraged to start their businesses and international investors will continue to invest in the Philippines.

After all, it has been reported earlier this year that the Philippines is the top global investment destination based on the survey of the US News and World Report.

Let’s all do our share to make this happen!

(The author is the Chair of EODB and Competitiveness Committee of the Management Association of the Philippines or MAP. She is an independent director of several corporations, including SM Investments Corporation, and former Chair and Senior Partner of Isla Lipana & Co./ PricewaterhouseCoopers Philippines. Feedback at <tammylipana@yahoo.com> or <map@map.org.ph>. For previous articles, please visit <map.org.ph>)