Spoilers to anti-red tape

The deadly spread of the 2019 coronavirus disease (COVID-19) pandemic has definitely influenced the outcome of the just concluded presidential elections in the United States. With the US producing the biggest number of COVID-related deaths, this added to the uphill battle of US President Donald Trump in his re-election bid. As the dusts settled, Democrat presidential candidate Joe Biden came out victorious over Trump in a tight race to the White House.

Thus, the incoming US President-elect first organized a 12-man anti-COVID team in his order of priorities as soon as he assumes office at the White House on January 20 next year. In a virtual tele-conference yesterday, presidential spokesperson Harry Roque elicited the assessment from our Philippine ambassador to the US Jose “Babes” Romualdez that President-elect Biden will honor the commitment made by the outgoing Trump administration to honor the government-to-government procurement of anti-COVID vaccine from the US-based laboratories. Like the rest of the world, Romualdez believes the Philippines-US relations will remain business as usual, especially to help one another recover from the economic impact of the COVID-19 pandemic.

Those looking for proof of the Philippine government’s commitment to stimulate business during the time of COVID-19 pandemic need look no farther out to the US. We can just look at the lightning speed by which the 18th Congress approved the grant to President Rodrigo Duterte of the special powers combating red tape during national emergencies. After President Duterte certified the measure as urgent, the Senate approved it without delay.

On the same day, the counterpart bill in the House was filed. With then newly minted Speaker Lord Allan Velasco cracking the whip, it needed only two days to be approved on second and third reading. There’s no more need for the bicameral conference committee to convene to reconcile differing provisions because the bills are carbon copies of each other.

The President is expected to sign the measure anytime now. Once it becomes law, President Duterte can accelerate regulatory processes for applications and renewals of authorizations and permits. He can also suspend requirements for such government documents. It’s a welcome development for enterprises trying to stay afloat amidst the quarantine.

The last thing the critically COVID-impacted companies need while struggling to survive is to be further burdened by government processes that only make it difficult for them to do business.

The intent of the impending law is clear. “The President wants government agencies to be more responsive in the present COVID-19 pandemic,” Roque pointed out. And the best way to realize this is to improve the delivery of public services.

The objectives of the measure run parallel to the purpose of Republic Act (RA) No. 11494, We Recover As One, or Bayanihan-2 for short. A section of the law directs the Philippine Competition Commission (PCC) to exempt from compulsory notification under the Philippine Competition Act “all mergers and acquisitions (M & A’s) with transaction values below P50 billion” entered within two years from the effectivity of the law.

The P50 billion figure is a significant increase from the existing threshold. Just before the pandemic struck, the PCC raised the ceiling to P6 billion from P5.6 billion. It said the adjustment “ensures that potentially anti-competitive M & A’s are subject to compulsory notification and review, while those that are less likely to pose competition concerns are excluded.”

What RA 11494 is effectively saying is that, in this time of emergency, so-called competition concerns must take a backseat to “business continuity and capacity building.” Because there’s an overriding need to stimulate economic activity and development, the so-called compulsory notifications and reviews become akin to red tape and to the other bureaucratic ills that give rise to shady deals in government.

In fact there are complaints that a significant number of applications for review or compulsory notification are languishing in PCC’s dockets since the pandemic. Since the commission also suspended the acceptance of expedited review applications, it remains unclear when PCC will lift it. Thus, many applications are currently in limbo. But the more important question is how soon PCC can review and resolve competition issues?

After all, the PCC’s action can either make or break billion-peso deals that could help revive our ravaged economy.

At this point, it remains to be seen how the proposed anti-red tape law will translate to actual practice at PCC. One can only surmise, for example, that there will be disconnect for companies whose transactions are still under review by the agency. Aren’t these deals already being hampered by the pandemic? Taken in this context, it behooves upon the anti-trust body to expedite applications currently pending before it. Otherwise, the anti-red tape measure will just be another toothless law.

The Bayanihan-2 was precisely enacted to promote economic activity during the pandemic by exempting certain transactions from PCC review. However, businesses are wary of PCC’s snail-paced decision-making process. Worse, businessmen seem to have little trust in the commission’s power of review.

While there’s no doubt the country’s competition law was designed to protect the public against anti-competitive behavior, such powers should not be a hindrance to development and job generation.

Given the current crisis, government is on the right track in enacting Bayanihan-2, the existing Anti-Red Tape Law, and, the forthcoming Anti-Red Tape in Crisis that will soon become a law. On paper, these measures enacted into law by President Duterte are designed to help immensely in getting businesses to cope with the global health pandemic that is obviously not dissipating any time sooner.

For them to effectively meet these objectives, policy implementers like the PCC must not become spoilers of these laws aimed at getting rid of red tape.