Senate approves Expanded Anti-Red Tape Act

The Senate passed on third and final reading a bill seeking to reduce the requirements and streamline the processes in starting and operating businesses to create a more conducive business environment in the country.

Senate Bill No. 1311, or the "Expanded Anti-Red Tape Act of 2017" was approved with 17 affirmative votes, zero negative vote and no abstention. The bill was sponsored by Senator Juan Miguel Zubiri, chair of the Senate Committee on Trade, Commerce and Entrepreneurship and co-sponsored by Senate President Pro-Tempore Ralph Recto. The bill was also co-authored by Sen. PanfiloLacson and Sen. Joel Villanueva, both principal authors of the old law.

According to Zubiri, the bill seeks to amend the existing Anti Red Tape Act of 2007 (Republic Act 9485).

"This landmark legislation is our answer to the clamor of the business sector and government agencies to ease doing business in the country, to make our country competitive and compliant with sound global business practices and standards," Zubiri said.

Zubirisaid the bill was meant to reduce "red tape," or "promote transparency in government with regard to business registrations and other manner of transacting with the public."

In approving the bill, "the Senate immediately responded to the call of President Duterte during his last State of the Nation Address (SONA) - to cut red tape in government," Zubiri added.

Prescribed processing period

The bill sets a new prescribed processing period under which both national and local government offices will have to "process the application and communicate the decision regarding the approval, or if the application has been disapproved, along with comments or reasons for such disapproval."

This period will not be longer than three (3) working days for simple transactions andseven (7) working days forcomplex transactions from the time the application was received.

For highly technical applications or such cases where extraordinary due diligence in reviewing the qualifications and merits of an application for clearances, accreditation and/or licenses issued by government agencies, the bill prescribed a processing time no longer than 20 working days.

For the Fire Safety Inspection Certificate (FSIC), issuance shall in no case be longer than ten (10) working days.

Automatic approval

The bill states that if the concerned national or local government agency failed to act on the application for license, clearance or permit after the prescribed processing period had lapsed then the application "shall be deemed approved."

However, this is provided that the application has lapsed "without informing the applicant of the error, omissions and/or additional documents required for submission," and that the applicant has complied with all required documents and fees.

Stiffer penalties

Zubiri added, "to further prevent inaction and corruption in government agencies, we made the penaltiesstiffer for violators of the law." The following are the violations: refusal to accept application; failure to act on the application; failure to attend to clients who are within the premises of the agency prior to end of official working hours; failure to render frontline services; failure to give the client a written notice on the disapproval of an application; and imposition of irrelevant requirements other than those listed in the Citizen's Charter of the agency.

Violators shall be imposed the following penalties:

First offense - thirty (30) days suspension without pay;

Second offense - Six (6) months suspension without pay;

Third offense - One (1) year to six (6) years imprisonment, dismissal and perpetual disqualification from public service and forfeiture of retirement benefits;

Criminal liability shall also be incurred through the commission of bribery, extortion, or when the violation was done to solicit favor in cash or in kind.

Digital-enabled and faster application

The bill mandates the Department of Information and Communications Technology (DICT) to establish a cloud-native Central Business Portal or other similar technology, to act as a central system that would receive the application and capture application data from business entities nationwide.

The Central Business Portal would then allow government agencies like the Department of Trade and Industry (DTI), the Securities and Exchange Commission (SEC) and other national and local government agencies "to receive and process applications, as well as to issue digitally signed business license documents to applicants."

New bureau named

The bill also called for renaming the existing Competitiveness Bureau under the DTI to be the new Business Anti-Red Tape and Competitiveness Bureau, which is tasked to complement the functions of the Civil Service Commission in implementing the Expanded ARTA.

Zubiri said the reforms under the billwere necessary if the country was to catch-up with its neighbors in terms of business competitiveness.Hecited a 2017 World Bank report which ranked the Philippines 99th among 190 countries on ease-of-doing-business. In the Association of South East Asian Nations (ASEAN), the Philippines ranked 6th among 10 nations.

"These reforms will introduce more economic activities that will increase opportunities and incomes of business firms, all types of entrepreneurs and their employees. With ASEAN economic integration, we should seriously face these challenges. I believe this act will enable our country to grow local businesses and invite more foreign businesses to set up factories and offices here," Zubiri concluded.

Source: Senate of the Philippines