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Business

Landmark ruling

HIDDEN AGENDA - Mary Ann LL. Reyes - The Philippine Star

As early as 2007, the country already had an anti-red tape law whose aim was to improve efficiency in the delivery of government services to the public by reducing bureaucratic red tape and preventing graft and corruption.

The Anti-Red Tape Act under Republic Act 9485 was, however, limited to frontline services and excluded quasi-judicial agencies, not to mention that it lacked teeth. Thus, bureaucratic red tape continued to persist.

The Philippines was ranking poorly in the World Bank Ease of Doing Business survey. In 2010, the country had its lowest ranking at 144 out of around 190 countries covered by the survey.

The survey covered 10 areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across border, enforcing contracts, and resolving insolvency.

By 2014-2015, the Philippines was already at 108th, but definitely still a long way to go if the country wants to get out of the bottom third into the top third in the world.

In 2018, the law was amended by RA 11032 or the Ease of Doing Business and Efficient Government Service Act with the aim of improving competitiveness of and ease of doing business in the Philippines. It also created the Anti-Red Tape Authority (ARTA).

The strengthened version of the law applied to all government offices and agencies in the executive department, including local government units, GOCCs, and other government instrumentalities, whether located here or abroad, and covered both business and non-business related transactions.

From 124th in the 2019 report, the Philippines was able to improve its rank to 95 out of 190 countries according to the 2020 report. Improvements were noted in three areas, namely starting a business, dealing with construction permits, and protecting minority investors. Starting a business was made easier with the passage of the Revised Corporation Code of the Philippines, which abolished the minimum capital requirement for domestic companies.

The 2020 report, benchmarked to May 2019, still covered 10 areas of business activity in measuring the ease of doing business scores and rankings. This time, however, it also measured regulations on employment of workers and contracting with government but these are not included in the computation of the scores and rankings.

The newly created ARTA already took a number of initiatives to further improve ease of doing business in the country. Last June, the Philippine Business Hub, which is a single online platform for registering businesses, was officially launched by ARTA and other government agencies including the Securities and Exchange Commission and the Department of Trade and Industry. Formerly known as the Central Business Hub, the PBH reduced the number of days to register businesses from 33 days and 13 steps to only seven days with only one step. The CBH was launched in January 2021.

But challenges remained for ARTA.

RA 11032 provides that all applications or requests submitted shall be acted upon by the assigned officer or employee within three working days in the case of simple transactions, seven for complex transactions, and not more than 20 working days for applications of requests involving activities which pose danger to public health, safety, morals, public policy, as well as highly technical applications. The application is deemed approved if the periods are not complied with.

This did not sit well for the National Telecommunications Commission (NTC). When ARTA ruled in 2020 that Newsnet’s application for the issuance of a certificate of public convenience to install, operate, and maintain local multi-point distribution system to deliver interactive pay TV and multimedia services in the 25.35-26.35 GHz frequency range was automatically approved after NTC sat on the application for many years, NTC resisted saying ARTA had no jurisdiction over the telecom regulatory body and went to court.

Last July 20, however, the Court of Appeals disagreed with the NTC. It said that ARTA has jurisdiction over the NTC since the Ease of Doing business Act applies to all government offices and agencies under the executive branch including the NTC, unlike the old Anti Red Tape Act which expressly excluded agencies performing quasi-judicial functions from its coverage.

The CA also ruled that ARTA’s Feb. 12, 2020 order which considered Newsnet’s application as automatically approved is already final and executory and therefore unappealable and incontestable. The appellate court also directed the NTC to faithfully and immediately comply with ARTA’s 2020 order.

The court also said that the identification by the International Telecommunications Union of the 24.25-27.5GHz frequency band for 5G networks does not preclude the NTC from assigning the 25.35-26.35 GHz frequency range in favor of Newsnet which is a subsidiary of Now Corp., emphasizing among others that Newsnet is already utilizing the said frequency band in Metro Manila and reserving the range for 5G would in effect deprive Newsnet of its allocated frequency range.

 

 

For comments, e-mail at [email protected]

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