The House Committee on Trade and Industry approved on Monday the proposed Ease of Doing Business Act, which seeks to simplify the issuance of licenses, clearances, or permits to business entities.
Rep. Ferjenel G. Biron of the Fourth District of Iloilo, committee chair, confirmed that the bill was approved during a meeting on Monday. The proposed Ease of Doing Business Act is one of the priority measures of the Palace and the 17th Congress.
“The purpose of this bill is to provide an easy, simple, straightforward and trouble-free avenue for entrepreneurs, micro, small and medium businesses and ordinary citizens who would like to venture into business in the country,” Biron said.
The House of Representatives is targeting to pass the measure before its Halloween break, which will start on October 14.
Under the substitute bill, the Ease of Doing Business Commission will be created to review and repeal existing executive issuances and recommend the repeal of
existing laws and local ordinances, which are outdated, redundant and adds undue regulatory burdens to business entities.
The commission will be composed of a chairman, secretary of trade and industry and secretary of finance as ex-officio members, and one private-sector representative each from the micro, small and medium enterprise and large industry sectors.
The bill provides that all national government agencies and local government units (LGUs) issuing licenses, clearances or permits to business entities will post a comprehensive checklist requirement for every type of license, clearance or permit to be issued. A uniform checklist of requirements required by licensing and permitting offices issuing a similar license, clearance, or permit will also be crafted.
The checklist of requirements, step-by-step procedure and schedule of fees for the issuance of a license, clearance or permit will be conspicuously posted in, among others, the premises of national and local government licensing and permitting agencies, the business one-stop shop, or in designated public places.
The measure provided that national government agencies and LGUs involved in the processing and issuances of licenses, clearances or permits to business entities shall process the application of such business entities and communicate the decision regarding the approval of the application or, if the application has been disapproved, with the reasons for such disapproval, within the prescribed processing time.
The bill provided that the processing of licenses, clearances or permits should not be longer than one working day for barangay governments, three working days for simple applications and 10 working days for complex applications from the time of receipt.
For special types of businesses that require clearances, accreditation or licenses issued by government agencies, where technical evaluation is required in the processing of licenses, clearance or permits, the prescribed processing time should not take more than 30 working days.
Also, the bill said a national government agency or LGU will assign a unique identification number to an applicant that will become the identifying number for all subsequent business registration-related transactions between the agency and the business entity.
The bill said an application for a license, clearance or permit shall be deemed approved upon failure or inaction of the concerned national government agency or LGU to process and issue the license, clearance, or permit after the prescribed processing time has lapsed without informing the applicant of the errors or omissions in the application or of the additional documents required for submission.
This provision would only apply if all required documents have been submitted and all required feeds and charges have been paid. In such cases, an assessment of fees shall be automatically issued and, once paid, the license, clearance or permit shall be issued automatically.
But, in case of denial of the application, the reason for the denial, as well as the remedial measures that may be taken by the applicant, shall be cited by the concerned national government or LGu.
Moreover, the bill said a single or unified business-application form shall be used in processing new application for business permits and renewals thereof, which consolidates all the items required of the applicant by various local government departments.
Business permits will be valid for one year, reckoned from the date of issuance. Within one year from the effectivity of this act, city and municipal government shall automate their business permitting and licensing system or set up an electronic business one-stop shop or a more efficient business registration.
Complex rules
With its 12th largest population and the 43rd largest economy in the world, Rep. Luis Raymund Villafuerte of Camarines Sur, the panel vice chairman and one of the authors of the bill, said the Philippines ranked as the second-most favored destination for foreign direct investments (FDI) in Southeast Asia.
However, Villafuerte said the Philippines’s rank in ease of doing business is one of the lowest in the world, at 171st out of 185 countries this year.
“Reasons for such a low ranking are attributed to difficulties in starting a business, getting electricity, registering properly, getting credit, resolving insolvency and obtaining business permits. All are mired by a large number of procedural regulations,” he added.
For example, Villafuerte said dealing with construction permits, it still takes 24 procedures to build a basic physical establishment in the Philippines compared to East Asia and the Pacific’s average of 15 procedures.
“Worse, it takes 16 procedures and 28 days to start a business compared to the region’s average of seven procedures and 23 days,” he added.
Another author of the measure, Rep. Manuel Zubiri of Bukidnon, said the proposed Ease of Doing Business Act will provide simple and easy business environment to investors.
In the Asean region, Zubiri, also the vice chairman of the trade and industry committee, said the Philippines has 16 procedures in starting a business compared to its neighbors, saying in Singapore and Malaysia have three procedures each, while Lao PDR has six procedures along with Thailand.
He said, in registering a property, the Philippine has nine procedures, while Thailand has three, Singapore and Laos have four each and Indonesia and Vietnam have five each.
In paying taxes, Zubiri added the country has 36 payments that a firm needs to make within a year while Singapore has five, Malaysia has 13 and Myanmar has 31.
In enforcing contracts or time to resolve a dispute, the Philippines has an average of 842 days or 2.3 years, while Singapore has 150 days, Vietnam 400 days, Malaysia 425 and Thailand 440 days, Zubiri said.