Freeman Cebu Business

PCCI: Red tape, corruption dampen investors’ interest

Carlo S. Lorenciana - The Freeman

CEBU, Philippines — While investor interest in the Philippines stays upbeat, the prevailing red tape, and graft and corruption in the government remain the top concerns of foreign investors when doing business in the country.

This was the assessment of Philippine Chamber of Commerce and Industry (PCCI) president Bing Limjoco when asked about the general sentiment of the foreign business community.

She was in Cebu yesterday for the launch of the Franchise Negosyo Para sa Cebu 2018 on June 18-20. She is also vice chair of the Philippine Franchise Association.

Despite these concerns, Limjoco expressed optimism these will hopefully be addressed following the passage of the Ease of Doing Business Act which is expected to finally curb bureaucracy in the government.

The business leader pointed out these concerns of the business community must be prioritized especially that there has been increasing interest from investors overseas to do business in one of Asia's fastest growing economies.

"We have been doing courtesy calls with various prospective investors from different countries," Limjoco said.

She cited growing investor interest from countries such as Chile, Sweden, Switzerland, Turkey, South Korea and Middle East nations.

Limjoco stressed the deadlines set in the newly-enacted Ease of Doing Business and Efficient Government Service Delivery Act of 2018 should be met on time to make it really efficient in addressing red tape in government.

She hoped the law call efficiently improve the ease of doing business in the country, saying other investors might turn their attention to other Southeast Asian countries of these concerns remain unsolved.

Under the EODB/Efficient Government Act, businesses can expect streamlined processes, reduced processing times from all government agencies, including government-owned and controlled corporations (GOCCs). Government agencies shall be made to comply with the prescribed processing time: three working days for simple transactions, seven working days for complex transactions, and 20 working days for highly technical transaction.

The EODB-EGSDA Act, which amended the Anti-Red Tape Act of 2007, requires all local government units to streamline procedures for the issuance of business permits, clearance and other type of authorizations by implementing unified business application form. LGUs are mandated to setup Business One Stop Shop (BOSS) to facilitate business permits application.

The law also provides that barangay clearances and permits must be issued at the city or municipality to speed up transactions.

Apart from streamlining, the law also provides for the creation of a Central Business Portal that will receive and capture application data on business-related transactions, while Philippine Business Databank shall provide LGUs and national government agencies access to information to verify validity and existence of businesses. With this, businesses are not required to submit the same documentary requirement previously submitted.

The EODB-EGSDA law will be implemented by the Anti-Red Tape Authority, an agency under the Office of the President that will monitor compliance of agencies, and implement and oversee national policy on anti-red tape and ease of doing business. The seven-member Ease of Doing Business and Anti-Red Tape Advisory Council will be composed of the Secretaries of DILG, DICT, and DOF, and two members from the private sector. The EODB/ARTAC will serve as the policy and advisory body of ARTA, to be chaired by DTI secretary, and the Director General of the Anti Red Tape Authority (ARTA) as vice chair.

Cebu Business Club president Gordon Alan Joseph earlier expressed pessimism whether the government can actually enforce the law.

"My question is whether this act will have real teeth? How will it be enforced? Monitored? Many of our LGUs (local government units) are notorious for not following the national laws or their own laws they enact," said Joseph, who is co-chair of the Regional Competitiveness Committee.

"As positive a development as this is, I am pessimistic about the government being able to monitor and enforce this new law.  What will they do differently to ensure that this new law and the new standards it imposes will be enforced?" the businessman pointed out.

The Philippines has languished in its mid-50's ranking out of 137  countries in the latest World Economic Forum (WEF) rankings but the country is still way behind Malaysia, Thailand and Indonesia in that order.

"We are very poor in ease of doing business and this has been weighing down our competitiveness through the years, in addition of course to infrastructure and institutional issues," Joseph had emphasized.


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