IS Metro Manila the most conducive region to do business? Apparently not. Four cities and the lone municipality in the nation’s capital are lacking a business one-stop shop, making it challenging for investors to set up shop there.
The Anti-Red Tape Authority (Arta) disclosed that the local governments of Malabon, Mandaluyong, Pasig, Pasay and Pateros only operate a one-stop shop during hectic periods, such as during renewal of business permits in January and filing of income tax returns due April. As such, the Arta is reminding them of their duty to put up a one-stop shop as required under the Ease of Doing Business (EODB) law.
“As of our last onsite tour, 12 of the 17 cities in NCR [National Capital Region] have a yearlong [one-stop shop]: Parañaque, QC [Quezon City], Navotas, Marikina, Valenzuela, Taguig, Makati, Muntinlupa, Las Piñas, San Juan, Caloocan and most recent is Manila,” Arta Chief of Staff Ira Paulo A. Pozon told the BusinessMirror.
“Five remaining cities have [one-stop shop] during the hectic annual renewal periods. [These cities are] Pateros, Pasig, Mandaluyong, Pasay and Malabon,” Pozon added. As the seat of power, Metro Manila is proven to be the favored investment destination of many foreign investors who intend to do business in the Philippines as the region has the most number of business establishments.
According to records from the Philippine Statistics Authority, there are 924,721 establishments operating nationwide in 2017. Of this total, about 21 percent, or 194,134 establishments, are situated in Metro Manila, and they employ an estimated 2.94 million workers.
Under the EODB law, local government units (LGUs) are mandated to establish a one-stop shop, to serve as their business permitting and licensing system that will receive and process applications for license, clearance, permit and authorization. “The goal is for all [local governments] to have a [one-stop shop] as a streamlining and anti-red tape measure. By minimizing points of contact, opportunities for red tape and corruption are minimized as well,” Pozon explained.
“We are working closely with LGUs so each will have a [one-stop shop] in compliance with the mandate of the law,” he added.
In a statement last Friday, the Arta directed local governments to comply with the EODB law’s requirements and adopt a one-stop shop in their city or municipality. The agency committed to provide the needed regulatory support to ensure LGUs can adhere effectively and competently with the provisions of the law.
According to the Arta, the one-stop shop should also assume the task of processing barangay permits and clearances, as well as collecting their fees, provided the share in the collections are remitted to their respective barangays.
Under the EODB law, government agencies are required to complete simple transactions within three days; complex transactions within seven days; and highly technical transactions within 20 days. They are also directed to reduce the number of signatories necessary to issue a license, clearance, permit and authorization.
Government workers found violating the law will be suspended for six months on first offense, and jailed for up to six years, imposed with a penalty of P500,000 to P2 million and stripped of retirement benefits on second count.
These provisions of the law are aligned with the government’s objective of curbing red tape to improve the country’s ratings in competitiveness surveys and, consequently, portfolio to foreign investors. In the 2019 cycle of the World Bank’s Doing Business report, the Philippines slipped 11 notches to 124th among 190 economies after getting poor scores in getting credit, starting a business and enforcing contracts. As a consequence, the Philippines landed seventh among the 10 Southeast Asian economies to trail Singapore (second), Malaysia (15th), Thailand (27th), Brunei Darussalam (55th), Vietnam (69th) and Indonesia (73rd) in the yearly survey.
Image credits: Roy Domingo