Most of the complaints we hear when complying with legal requirements in the Philippines is the fact that the processes can be too long, too slow, too difficult, and too costly. But through Republic Act (RA) No. 11032, known as the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018," it promises ease of doing business in the country.
Infographic obtained from: Carpo Law & Associates (https://carEpolaw.com/key-reforms-from-the-ease-of-doing-business-act-philippines/)
Republic Act (RA) No. 11032, which amended Republic Act (RA) No. 9485 or the Anti-Red Tape Act of 2007, aims to reduce processing time, cut bureaucratic red tape, and also eliminate corrupt practices. The EODB of 2018 was signed and became effective on June 17, 2018. The Implementing Rules and Regulations (IRR) were passed on July 17, 2019.
(Read the entirety of the Ease of Doing Business Act)
“It takes an average of 13 procedures to start a business, nine procedures to register property, and 22 procedures to build a physical establishment in the Philippines.”
- World Bank, Ease of Doing Business 2020 Report
The Philippines has been lagging behind its ASEAN counterparts when it comes to attracting foreign direct investments (FDIs). With the Ease of Doing Business 2020 Report, published by the World Bank, the Philippines ranked 95th among 190 economies.
The Implementing Rules and Regulations (IRR) are seeking to provide simpler and more straightforward regulations for Micro, Small and Medium-Sized Businesses (MSMEs). Also, reforms from the EODB of 2018 seek to boost global competitiveness and attract more local and foreign entrepreneurs.
Currently, the Anti-Red Tape Authority (ARTA) is responsible for enforcing the Ease of Doing Business Act in the Philippines. The ARTA trains agencies to comply with the new law and resolves complaints.
The 6 key reforms from the legislation are as follows:
1. Expedited Business Permits and Licenses
Business registration and permit renewals are made quicker and easier.
Unified Application Form: extensive paperwork in beginning a business is streamlined; EODB mandates a single application for business permits and renewals, consolidating all the requirements and documentation into a single form.
Preliminary Evaluation: business applications will undergo a preliminary evaluation wherein applicants are allowed to correct any deficiencies before submission of their actual application.
Fewer Transactions: all related licenses, clearances, permits and authorizations will be issued simultaneously with the business permit and all of which will be valid for one year.
One-Stop-Shop: as referred to in Section 11 of the RA 11032, the Business One Stop Shop (BOSS) will house a single common site or location with all government agencies involved in starting a business including, but not limited to, treasury, business permits and licensing office, and zoning office.
2. Deadlines for Government Transactions
All government agencies now must strictly follow the mandated time frames imposed to ensure efficiency.
Simple Transactions: applications and requests that require only standard ministerial action shall be processed within 3 business days.
Complex Transactions: Applications and requests that require resolution of complicated issues shall be processed within 7 business days.
Highly Technical Transactions: Applications and requests that require highly technical or specialized knowledge shall be processed within 20 business days.
If the corresponding government agency fails to process the application within the prescribed time frame, the completed application will be automatically approved.
3. Online Registration for Businesses
As stated in Section 13 of RA 11032, a Central Business Portal (CBP) will be established to serve as a central system to receive applications and capture application data involving business-related transactions, including primary and secondary licenses, and business clearances, permits, certifications, or authorizations issued by the LGUs.
The Department of Information and Communications Technology (DICT) is in charge of prescribing and creating the CBP. Through the CBP, all forms will be moved online and documents can be scanned and submitted electronically. Licenses and permits can be printed from home or office, and shall have the same authority as a hard copy.
4. Anti-Corruption Policy
Section 7 of RA 11032 states a zero-contact policy wherein no government officer or employee shall have any contact, in any manner, unless strictly necessary with any applicant or requesting party concerning an application or request. This is only until all systems are brought online by the Department of Information and Communications Technology (DICT).
After the initial application filing and review, applicants will be identified by case number and deal with government functionaries anonymously. This is to reduce corruption involved in different government agencies.
5. Citizen's Charter
The Citizen's Charter aims to promote transparency and accountability for all national government agencies including departments, bureaus, offices, instrumentalities, government-owned and/or controlled corporations, and local government units.
Section 6 of the Act provides that, seen in the respective website of government agencies and published materials, are the updated service standards to be known as the 'Citizen's Charter' in the information billboards that detail:
Complete checklist of requirements for each application or request;
Steps to obtain a particular service;
Person/s responsible for each step;
Maximum time to complete a request;
Documents required;
Fees required; and
Procedure for filing complaints
6. Accountability
The law also prescribes administrative and criminal liability to officials and employees acting improperly to ensure proper compliance. Violations include:
Refusal to accept an application;
Imposition of requirements or fees not listed in the Citizen's Charter;
Collusion with fixers; and
Missed deadlines
For first offenses, there will be administrative penalties applied while second offenses will result in criminal liability.
Improving the Business Climate in the Philippines
We are hopeful that entrepreneurs will receive their much needed assistance when it comes to doing business in the country. Hopefully, in the long-run, these efforts will lead to increase in the productivity, efficiency, and effectiveness of the corresponding government agencies in cultivating a thriving business climate in the Philippines.
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