Senate approves bill to cut government red tape

The Senate approved the Expanded Anti-Red Tape Act of 2017 which seeks to reduce the requirements for starting and operating businesses by limiting the processing of business documents by not more than three days for small firms. 

Senate Bill 1311, the anti-red tape measure, was approved with 17 affirmative votes, zero negative vote and no abstention.

The bill is expected to address the concerns of businesses on bureaucratic hurdles that restricts investments.

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.

Zubiri said this measure is meant “to cure the defects in the current system of the business community’s transactions with government.”

The House has yet to pass its version of the bill but he expects a House approval soon and for a law to be signed by President Duterte by the end of the year.

Moreover, he said the passing of the measure was a response to the call of President Duterte to cut red tape in government processes.

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

The bill sets a new prescribed processing period not be longer than three working days for applications of micro, small and medium enterprises (MSMEs) and 10 working days for complex applications from the time the application was received.

For special types of businesses that require clearances, accreditation and/or licenses issued by government agencies, the bill prescribed a processing time no longer than 20 working days or “as determined by the government agency or instrumentality concerned, whichever is shorter.”

Meanwhile, if the concerned national or local government agency application would fail to act on the application for license, clearance or permit after the prescribed processing period had lapsed then the application “shall be deemed approved.”

This 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.

The bill also requires national and local agencies to set up an electronic “Business One-Stop Shop (BOSS)” business permit and licensing system nationwide to make the application process for business permits and other documents faster and more convenient.

Through the BOSS, applicants could avail of online mechanisms for submission and processing of license, clearance and/or permit applications.

Finally, the bill also called for renaming the existing Competitiveness Bureau under the Department of Trade and Industry (DTI) to be the new Business Anti-Red Tape and Competitiveness Bureau, to be headed by a bureau director. The new bureau would be tasked to complement the functions of the Civil Service Commission in implementing the act.

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.

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.”

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, according to the bill.

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