Now enforce the law

A new law that aims to make doing business easier in this country is expected to be signed soon by President Duterte. Called the Ease of Doing Business and Efficient Government Service Delivery Act, the law enhances other measures for cutting red tape and making it easier for investors to set up shop.

Once enacted and in effect, authorities must make sure the law is fully enforced, with implementing rules and regulations ensuring that its objectives will be attained. Despite sustained economic growth, the country lags behind its neighbors in attracting job-generating foreign direct investments. Business requirements and the mountain of red tape for compliance also dampen entrepreneurship especially at the micro level.

In an international survey last year on ease of doing business, the country ranked a dismal 171st globally in ease of starting a business, 112th in registering property and 85th in dealing with construction permits. President Duterte has often said he wants processing time for simple government documents reduced to no more than three working days; for complex transactions, from seven to 10 days; and for highly technical applications, no more than 20 days. This new law aims to make that possible.

The law and implementing rules should also cover barangay units, which are authorized to impose their own fees and raise funds. Barangay requirements add a significant layer of red tape and opportunities for corruption for anyone doing business in this country. Investors have pointed to barangay units as one of the biggest sources of red tape and graft.

Authorities should also review the status of certain gated subdivisions in Metro Manila and other highly urbanized areas, where homeowners’ associations collect their own business fees and the equivalent of road tolls. Any area that becomes highly commercialized must be taken out of the jurisdiction of private homeowners and turned over to the local government, with the roads opened for free public use.

This new law is a welcome development for the business community. The next step is to ensure its proper enforcement.