Press Release
August 22, 2017

Senate approves Expanded Anti-Red Tape Act

The Senate passed on third and final reading a bill seeking to reduce the requirements and streamline the processes in starting and operating businesses to create a more conducive business environment in the country.

Senate Bill No. 1311, or the "Expanded Anti-Red Tape Act of 2017" was approved with 17 affirmative votes, zero negative vote and no abstention. The bill was sponsored by Senator Juan Miguel Zubiri, chair of the Senate Committee on Trade, Commerce and Entrepreneurship and co-sponsored by Senate President Pro-Tempore Ralph Recto.

According to Zubiri, the bill seeks to amend the existing Anti Red Tape Act of 2007 (Republic Act 9485) "to cure the defects in the current system of the business community's transactions with government."

"This landmark legislation is our answer to the clamor of the business sector and government agencies for ease of doing business in the country, to make our country competitive and compliant with sound global business practices and standards," Zubiri said.

Zubiri said the bill was meant to reduce "red tape," or "promote transparency in government with regards to business registrations and other manner of transacting with the public."

In approving the bill, "the Senate immediately responded to the call of President Duterte in his last State of the Nation Address (SONA) to cut red tape in government," Zubiri added.

Prescribed processing period

The bill sets a new prescribed processing period under which both national and local government offices will have to "process the application and communicate the decision regarding the approval, or if the application has been disapproved, along with comments or reasons for such disapproval."

This period will not be longer than three working days for simple applications involving micro, small and medium enterprises (MSMEs) and 10 working days for complex applications from the time the application was received.

For special types of businesses that require clearances, accreditation and/or licenses issued by government agencies, the bill prescribed a processing time no longer than 20 working days or "as determined by the government agency or instrumentality concerned, whichever is shorter."

The bill said that if the concerned national or local government agency application would failed to act on the application for license, clearance or permit after the prescribed processing period had lapsed then the application "shall be deemed approved."

However, this is provided that the application has lapsed "without informing the applicant of the error, omissions and/or additional documents required for submission," and that the applicant has complied with all required documents and fees.

The bill allowed that prescribed processing period to be extended once for highly technical applications or such cases where extraordinary due diligence in reviewing the qualifications and merits of an application is required.

Under the bill, stiffer penalties shall be imposed - ranging from 30 days suspension without pay (1st suspension) to dismissal and disqualification from public office and one to six years of imprisonment (3rd offense) - to heads of offices or agencies, as well as supervising officers authorized to issue licenses, permits or clearances who violate the act.

Simpler, faster application

To make the application process for business permits and other documents faster and more convenient, the bill required national and local agencies to set up an electronic "Business One-Stop Shop (BOSS)" business permit and licensing system in cities and municipalities nationwide.

Through the BOSS, people who wish to apply for their businesses could avail of online mechanisms for submission and processing of license, clearance and/or permit applications.

In relation, a single or unified business application form shall be used in processing new applications for business permits and business renewals.

"The new form would consolidate all the information of the applicant by various local government departments, such as but not limited to the local taxes and clearances, building clearance, sanitary permit, zoning clearance, and other specific local government unit requirements as the case may be, including the fire clearance from the Bureau of Fire Protection," the bill said.

The unified application form, as well as comprehensive checklist of requirements, step-by-step procedures, and schedule of fees, will be made available online in the cities/municipalities' websites.

The bill said the Department of Information and Communications Technology (DICT) would be required to establish a cloud-native Central Business Portal or other similar technology, to act as a central system that would receive the application and capture application data from business entities nationwide.

The Central Business Portal would then allow government agencies like the Department of Trade and Industry (DTI), the Securities and Exchange Commission (SEC) and other national and local government agencies "to receive and process applications, as well as to issue digitally signed business license documents to applicants."

New bureau named

The bill also called for renaming the existing Competitiveness Bureau under the DTI to be the new Business Anti-Red Tape and Competitiveness Bureau, to be headed by a bureau director.

The new bureau would be tasked to complement the functions of the Civil Service Commission in implementing the act.

Zubiri said the reforms under the bill were necessary if the country was to catch-up with its neighbors in terms of business competitiveness.

"While our beaches and marine resources are a boon to tourism and agriculture, our being an archipelago is a disadvantage compared to our continental-based competitors in the ASEAN," he said.

Zubiri cited a 2017 World Bank report which ranked the Philippines 99th among 190 countries on ease-of-doing-business. In the Association of South East Asian Nations (ASEAN), the Philippines ranked 6th among 10 nations.

"These reforms will introduce more economic activities that will increase opportunities and incomes of business firms, all types of entrepreneurs and their employees. With ASEAN economic integration, we should seriously face these challenges. I believe this act will enable our country to grow local businesses and invite more foreign businesses to set up factories and offices here," Zubiri concluded. (Jardine Dave Chua)

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