MAP InsightsColumn in BUSINESSWORLD
Improving ease of doing business: ARTA and PPPwritten by Mr. RUY Y. MORENO - July 25, 2023
The bane of doing business in the Philippines is that all entities (juridical, such as corporations or partnerships, and individuals) are required to apply for, and comply with, government regulations and requirements with compliance evidenced by relevant permits and documents which allow them to go about their business. Unfortunately, the process creates silos. Namely, the information provided to an individual National Government agency (NGA) or local government unit (LGU) is not shared with another NGA or LGU, even though the latter may be asking for the same data. As a result, the applicant has to repeatedly provide the same information — name, address, etc. Such unnecessary repetition leads to loss of time on the part of the applicant, and a loss of productivity at the NGA and LGU level as the information is repeatedly processed by different sections with the increased possibility of errors as the data is inputted into the records.
Such a repetitive process resulting in bureaucratic Red Tape has a negative impact on the Ease of Doing Business (EODB) as it slows down the process of business registration and individual compliance, thus adversely affecting the country’s economy as it discourages the participation of new local and foreign investments and hampers the generation of livelihood opportunities and employment.
Improving the EODB requires a whole-of-nation approach through streamlining, digitalization, public-private partnerships (PPP), good regulatory practices, and good governance.
The Anti-Red Tape Authority (ARTA) — created under RA 11032 or the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018” — is a government agency under the Office of the President that oversees the overall implementation of a national policy on anti-red tape that ensures an improved and institutionalized solution to the lengthy application process on the authorization of permits, licenses, and other business requirements critical to the supply chain and to the daily life of the Filipino.
Bureaucratic efficiency is a key component in President Ferdinand Marcos, Jr.’s socio-economic agenda. This was emphasized by the Director-General of ARTA, Secretary Ernesto V. Perez, during the Breakfast Dialogue co-hosted by BDB Law and the Management Association of the Philippines (MAP), held recently in Taguig City. The secretary said that ARTA’s vision is to “streamline and digitalize Philippine bureaucracy for efficient service delivery.”
He pointed out that the revolutionary aspect of ARTA lies in its responsibility to empower and equip government agencies to meet the demands of the EODB law for improved service to the Filipino people and Philippine-based public and private groups.
Some actions of ARTA and their results are:
1. Citizen’s Charter — To address the lengthy procedures and processing time of applications, the Citizen’s Charter has been further strengthened by, among others, mandating government agencies (NGAs and LGUs) to classify their services in accordance with the 3-7-20 rule. The rule establishes specific time frames based on the complexity of the transaction. Simple transactions should be processed within three (3) days, complex ones within seven (7) days, and highly technical transactions requiring research within 20 days. This framework ensures transparency and efficiency in the delivery of government services, enabling businesses and citizens to have clear expectations on the status of their application.
2. Regulatory Impact Assessment (RIA) — Government agencies are required to submit a Regulatory Impact Assessment to evaluate their processes and systems, aiming to identify areas where unnecessary costs burden procedures, with proposed solutions undergoing RIA to ensure better efficiency and cost savings. Additionally, the law requires LGUs to establish and operate an electronic business one-stop shop (EBOSS) where permit applications, fee payments, and business permit printing can be conducted online and with ease. This writer personally saw EBOSS in action in the Municipality of Sara, a second-class municipality, 100 kms to the north of Iloilo City.
3. Philippine Business Hub — Previously, it would take over two months to register a business, but with the implementation of the Philippine Business Hub, the registration process can now be completed within a maximum of three working days.
4. Report Card Survey — As mandated by Section 20 of RA 11032, a Report Card Survey has been developed to allow applicants to provide feedback on the quality of service received from a specific agency. This survey aims to assess agency performance and establish harmonized and standardized frameworks for measuring client satisfaction across all government levels.
Other ARTA initiatives are the identification of some critical sectors and their engagement to help in this whole-of-nation approach through the program of the National Effort for the Harmonization of Efficient Measures of Inter-related Agencies (NEHEMIA).
A. Telecommunications — For the telecommunications sector, a Joint Memorandum Circular (JMC) facilitating the development of telecommunications and internet infrastructure was initially signed by all government agencies during the COVID-19 pandemic. This has facilitated approvals for the installation of telecommunications cell sites and towers around the country which has helped increase the breadth and quality of telecommunications facilities and coverage. However, the JMC is expiring on Sept. 14. To address the need to continue the program, Secretary Perez said during the Dialogue that ARTA has recommended to the President the issuance of an Executive Order (EO) to continue the provisions in the JMC that facilitate the approval of applications to build and energize telco towers and cell sites.
The importance of internet connectivity extends beyond the benefits for large telecom companies, but also includes businesses which rely heavily on digitalization processes and benefit from it. Yet, one of the persistent nuisances in the country is its slow internet connection. The issuance of the JMC resulted in improvements in the country’s internet median download speed. The EO should further help in the continuous improvement of the download speed.
B. Supply Chain — Transportation — In the movement of goods, cargo trucks are a key element in the smooth operation of the supply chain. Such cargo trucks were usually delayed at checkpoints. To facilitate the smooth transportation of goods from the point of entry (Customs) or exit (factory or storage facility) to their final destination, an additional JMC has been issued to reaffirm the prohibition on LGUs imposing pass-through fees on container and cargo trucks. Addressing this concern, a Unified Logistics Pass (ULP) has been created which enables the identification of ULP-registered trucks. Scanning machines will be provided to various LGUs, allowing the scanning of a QR code issued to each ULP-registered truck entering an LGU.
But all is not necessarily rosy — if there are problems that may be encountered, applicants can easily complain directly to ARTA through the 8888 Citizen’s Complaint Center. Should the agency fail to respond, ARTA will act as the complainant, and it will investigate and file charges if necessary. Some of the success stories with ARTA’s assistance are with Toyota Motors Philippines and Texas Instruments.
WHOLE-OF-NATION APPROACH — INTERACTION WITH THE PRIVATE SECTOR
The MAP, ARTA, the Department of Information and Communications Technology, the Department of the Interior and Local Government, and Meralco — in the spirit of a public-private partnership — will soon sign a memorandum of agreement to identify areas that MAP can assist in further improving EODB. This collaboration aims to leverage the relevant expertise, resources, and innovative solutions of the private sector in conjunction with ARTA’s efforts. By working together, the parties can address the challenges that lie ahead.
This collaboration between ARTA and the private sector is vital in enhancing bureaucratic efficiency which, in turn, will encourage compliance by the citizens while attracting more investors, facilitate the growth of businesses, and generate additional livelihood opportunities for the country.
An industry-driven economy offers the advantage of greater potential for its improvement that will provide solutions to one of the key problems that the Philippine economy has been facing, EODB. Easing the procedures on business processes will encourage more Filipinos to either invest in new businesses or expand their current activities.
ARTA’s efforts, together with the NGAs, the LGUs, and the private sector should be fully supported. Thus, this whole-of-nation approach will lead to continuous substantial growth and development for a more globally competitive Philippines.
Ruy Y. Moreno is chair of the MAP EODB Committee. He is also the chair of the Center for Global Best Practices (CGBP).