DEALING with bureaucratic red tape was a major stumbling block that aspiring Filipino entrepreneurs had to hurdle the past many decades before they could set up shop.
Securing permits and licenses from local governments alone took so much time, effort and money. These difficulties had turned off not only local entrepreneurs but also foreign investors who are keen on doing business in the Philippines.
President Duterte is well aware of this, having been a longtime mayor of Davao City. The President saw the extent of the problem when he assumed office in 2016 and said in his speeches that he once walked out of a Cabinet meeting in frustration over sluggish government office processes and red tape. That is why he wasted no time in dealing with the scourge that is red tape when he was elected President, according to Anti-Red Tape Authority (Arta) Director General Jeremaiah Belgica.
In 2018, two years after he assumed office, Duterte signed Republic Act (RA) 11032, or the ease of doing business (EODB) Law in a bid to cure the defects of the previous law the Anti-Red Tape Act of 2007. At the same time that the law was signed, the Arta was also created under the Office of the President. However, its implementing rules and regulations were only promulgated after the appointment of Belgica as the agency’s first director general in July.
In an interview with the BusinessMirror, Belgica said the President has always wanted to make it easier for Filipinos to deal with government, adding that the first beneficiary of the government’s efforts to cut red tape would be the simple guys who want to do business for their family.
Red tape, he said, prevents investors from investing in the Philippines. Thus, new businesses together with new job opportunities for Filipinos have not been opened.
“[Cutting red tape will] create more jobs, boost income, create more investments and hasten not only government service but also business turnarounds because people would be investing more. Locals would open more business so economic growth would be much quicker,” he said.
“If you would try to measure its economic impact—how much money we have lost or failed to realize, how many jobs were not created that should have been created—then I think those who are guilty of causing red tape are the ones who committed the largest economic sabotage against the country,” he added.
During his fourth State of the Nation Address last July, the President did not mince words and named five agencies which he said requires “drastic” changes in their services. These are the Land Transportation Office (LTO), Social Security System (SSS), Bureau of Internal Revenue (BIR), Land Registration Authority (LRA) and the Home Development Mutual Fund (HDMF).
A week after the Sona, Arta sat down with these agencies in Malacañang together with the Presidential Complaints Center, Presidential 8888 and the Presidential Anti-Corruption Commission to identify the reasons for the mounting complaints, most problematic transactions, chokepoints and their corresponding solutions.
“We already called them and we asked them to present their streamlining efforts and I think out of the five, we could say at least three of them—I can say, I can commend their efforts to streamline. It’s just that there are so many [transactions], but there are two who have to shape up,” he said, without identifying the specific agencies.
Duterte’s challenge
Both the HDMF or Pag-Ibig Fund and LTO said they view the President’s call as a challenge and vowed to continuously improve their service delivery and support the anti-red tape efforts of the administration.
Half of calls not complaints
In reaction to the President’s statement, Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti said it was “unfortunate” that their agency was mentioned. While Moti admitted that their agency is fifth in terms of the number of calls for full-year 2018, he said not all 5,075 calls were actual complaints.
“We agree with the statement of the President. It’s just that when we try to zero in on the details, we notice that those were the total number of calls. So around half of that, 49 percent to be exact, around half of that are actually not complaints but mostly queries, about the products and services of the fund,” Moti told the BusinessMirror in an interview.
“Some were calls to do follow-ups of transactions but still within the timeline to process transactions, around 60 plus, around 63 if I’m not mistaken, were actually commendations,” he added.
What triggered close to 2,200 complaints during the first half of 2018, according to Moti, was the migration of HDMF’s data that was completed in December 2017.
“By January of 2018, we were faced with a backlog of around 130,000 transactions so we had to catch up. We put in place certain initiatives to wipe out the backlog and it took us around five months, almost six months to be back to where we wanted to be,” he said.
Moti said the complaints were slashed to 383 by the second half of 2018, or by 82.58 percent. And by the first half of 2019, it declined further to 225. This meant that the actual complaints from first half of 2018 to the first half of 2019 went down by 89.77 percent.
“That’s why we are confident that by end of the year…we would no longer be in the top 5 because the increase was mainly due to the system migration which would usually take six to nine months to stabilize, and we did it in five months. I would say we are right where we would want to be,” he said. “It’s a result of our desire to automate a lot of transactions to implement the transact anywhere, ease of doing business. So we want members to not force themselves and go to a specific branch but instead they can go to any branch of ours to transact.”
LTO’s side
As for the LTO, the agency said it has since undertaken measures to improve the delivery of its services, such as the provision of motor vehicle license plates, issuance of driver’s licenses and addressing motorists’ complaints.
But the LTO said there were concerns referred to their agency that are not within its mandate, though the services are related. These included complaints about the cost of insurance, high cost of medical certificates, long queue at medical clinics, public-utility vehicle-related matters and parking.
“Not all concerns referred to the LTO are complaints. The CCB [Contact Center ng Bayan] and other government portals also send commendations, suggestions, recommendations, as well as requests for information,” said LTO Assistant Secretary Edgar C. Galvante in an e-mailed response sent to the BusinessMirror.
Nonetheless, Galvante said the LTO has been streamlining its processes since the Duterte administration took over in 2016.
“Streamlining is a continuous process for the agency. In compliance with the President’s directive, the LTO is constantly improving its systems and procedures to be more responsive to its clients,” he said.
The BusinessMirror also sought the side of the BIR, SSS and LRA but they have yet to respond as of press time.
Walking the talk
As for Arta which is a relatively new agency, Belgica said there is a need to inform the public about the existence of the agency and the EODB law.
He also said the Arta is targeting sectors and other agencies that need to streamline their processes. Belgica said he wants to start off with the agencies involved in starting a business and move on to those that oversee the health and the transportation sectors.
Belgica said he also plans to strengthen the linkages of agencies by providing backroom processing. He said he is keen on allowing these agencies to interface with one another, or create a national business one-stop shop aside from the one-stop shops in local government units.
The first Arta chief said he wants his agency to walk the talk by being “a window to how a government agency in the future should look like.”
He added: “Internally, I want Arta to become the first paperless agency. Why? Because that is our direction in the future. We have to push for that.”
Automate or die
According to the law, every agency and local government should have undergone full automation by 2021. In the meantime, Belgica said Arta is pushing all highly urbanized cities to automate within the year in coordination with the Department of the Interior and Local Government, and the Department of Information and Communications Technology.
Moving forward, Arta remains optimistic that the country could get a better ranking in the World Bank’s Ease of Doing Business report in the succeeding years as the Duterte administration continues to fight red tape.
In the 2019 World Bank Doing Business Report, the Philippines slid by 11 notches from 113th to 124th among 190 countries. However, the Department of Finance and the Department of Trade and Industry expressed their strong objections over the report and even demanded corrections, citing “grossly inaccurate and understated findings” in the Getting Credit indicator of the report.
“In 2020, we are sure that we are [no longer] in 124th place. If I am not mistaken, our projection is we are 108th or even better,” Belgica said.
While he stressed that the rankings based on the EODB report are “very important,” he said the satisfaction of the people on the ground could also be a good gauge of the country’s performance in curbing red tape.
“I think it’s very important but I think there are also other indicators or other scoring that we need to use as measurements, like local feedbacks, scorecard of local agencies. The people on the ground will tell us that we are really doing well,” he said.
1 comment
The anti red tape offices of the government themselves are now into red tapes themselves! How? Simple, the personnel inside do not care to do genuine work, to investigate and to change the personnel in government agencies to stop with red tapes, they will instead require the complainants to do all the investigations, while they just sit in their offices waiting for complainants to report to them, see?