Red tape (not for gift wrapping)

Red tape — or redundant and unnecessary regulations in government – has often times been cited as one of the main culprits behind the Philippines ’ pathetic ranking in global competitiveness surveys. More often, it is a practice that has often been tied with corruption, an area where we have ranked poorly.

Unfortunately, it is a problem that has lingered. President Gloria Arroyo herself, in her latest state of the nation address, identified reducing red tape in all agencies as among her five comprehensive strategies for global competitiveness.

The American Chamber of Commerce (AmCham) in the Philippines in late September conducted a survey among its members on what they believe are the three red tape issues that are most harmful to foreign business in the Philippines. The survey was made upon the request of the Department of Trade and Industry, which heads the Anti-Red Tape Task Force.

Claiming of VAT refunds and the issuance of tax credit certificates emerged as the top two on the list, with both processes interestingly being handled by the Bureau of Internal Revenue. Ranking third is the processing of working permits and visas, a function of the Bureau of Immigration.

Compliance too costly

"The survey results reveal that respondents are heavily burdened by the great amount of time needed to prepare VAT refund claims and considerable ‘cost-of-money’ especially when claimants often wait years to receive refunds. Compliance costs run to millions of pesos," AmCham said.

It added that processing of requests for tax credit certificates "also takes many months and involves unnecessary cost-of-money expense."

Meanwhile, AmCham is recommending a one-stop-action center for obtaining work permits for foreign workers as the process requires several days to apply and several months to wait.

Other red tape complaints that did not make it to AmCham’s top three but are equally important are valuation, tariff payment and cargo releasing at the Bureau of Customs, and renewal of permits as well as procedures at the Social Security System.

These complaints are actually nothing new. They just merely highlight the reality that these concerns have not been addressed for ages.

Slipping competitiveness

Year after year, global competitiveness reports have shown the Philippines’ competitiveness ranking slipping. Being near the bottom to date proves investors’ mounting disappointment on how the government has been conducting its bureaucratic affairs.

What’s making things worse for us is the fact that other countries have come to terms with their own weaknesses, and are refining the way they do business to become attractive to sharp-eyed investors.

A step forward for the Philippines is perhaps House Bill 3776 or the proposed Anti-Red Rape Act of 2005, which the lower house passed on third reading in May. A counterpart bill is pending at a Senate committee.

The proposed measure aims to put in place effective practices in government by among others imposing time limits on transactions and automatically granting extensions if no action is taken by a government agency.

Need to downsize bureaucracy

Red tape obviously is also a by-product of how big an agency is, such that bigger agencies would have more redundant and oftentimes unnecessary rules. In fact, past government surveys have showed that the bureaucracy is too overstaffed, not only with the regular work force but also with large number of contracted employees. As a result, individual productivity is criticized for being one of the lowest in the region.

An honest-to-goodness government downsizing may be another step in the right direction. But this obviously is out of the question now that the May mid-term election is at hand.

Banking on computerization

Notwithstanding the overall negative view on the inefficiency of government processes, computerization efforts in some critical bureaucratic processes have reflected dramatic changes — and performances. Renewing a driver’s license, for example, now just takes a couple of hours; before, drivers would have to wait for months before their plastic cards could become available.

Other agencies that have successfully undergone computerization, and have passed the benefits to the public, are the Land and Transportation Office’s motor vehicle registration, the National Census and Statistics Office for birth certificates, and the National Bureau of Investigation for clearances.

I’m sure that these government offices, as well as many others that have undertaken computerization, are on the road to cutting unnecessary processes that are not only traumatic, but even waste the time, effort, and money of people and business firms.

More importantly, continuously addressing red tape would hopefully reduce if not eradicate corruption in government, another problem that has been noted as a major deterrent to improving the country’s productivity.

Red tape definitely is not something that can be removed overnight. But let not our bureaucrats take their sweet time. Otherwise, we will find ourselves once again at the lower end in next year’s global competitiveness rankings.

Bitter sweet Poker Tour championship

Taking advantage of a subtle tactical error of his opponent, Chris J. Parker, Bayview Technology Inc. Chief Executive Officer, won the much-coveted Champions Bracelet of the 2nd Philippine Poker Tour (PPT) Million-Peso Hold’em Championship after more than 11 hours of intense struggle over a two-day period. Parker bested 155 finalists in the Grand Finals held Saturday and Sunday at Airport Casino Filipino-Paranaque. In addition to the prestigious bracelet, Parker received the guaranteed prize of P1 million in cashable Pagcor chips.

On the other hand, it was a bitter ending for runner-up Ed Bautista from Baguio City, who after clawing his way up from middle position, was a deal away from duplicating his cousin’s (Jo Derek Bautista) feat during the 1st PPT Million-Peso Hold’Em Championship. While failing to bring another Champion Bracelet to Baguio, Ed got the guaranteed prize of P350,000.

Other major winners of the biggest non-wager poker skills competition included, Romy Pueblo, a balikbayan from Los Angeles, California (for 3rd place) and Manuel "Tikboy" Regis from Cebu City (a repeat finalist, for 4th place). Each received the guaranteed prize of P200,000 and P125,000, respectively.

The complete list of top thirty (30) winners are: 5th, Kim Tae Hyung; 6th, Benny Gonzalez; 7th, Andrea Backstrom; 8th, Cris Bautista; 9th, Mike Santangelo; 10th, Eric Ang; 11th, Benjamin Babanta; 12th, Bryan Malantic; 13th, Martin Guiang; 14th, Lady M; 15th, Rainier Salazar; 16th, Oded K; 17th, Victor Tan; 18th, Kent del Rosario; 19th, Victor Yuvallos; 20th, Jessie Dy; 21st, W. Tajima; 22nd, D. Nario; 23rd, Gilbert Tiu; 24th, M. Pagsuyuin; 25th, T. Lee; 26th, Kenneth Uy; 27th, Ponsoy Canizares; 28th, Elmira Wagas; 29th, Joseph Sia; and 30th, Jeff Fernando.

During the five-month nationwide competition, Philippine Poker Tour (PPT) enjoyed the support provided by Pagcor management headed by Chairman & CEO Ephraim Genuino, President & COO Rafael "Butch" Francisco, and Vice-President for Administration Rene C. Figueroa. On the operations side, valuable support and cooperation were provided by key staff, namely Mabuhay "Boy" Rosero (Senior Head, Poker Department), Obet de Jesus (former chairman of the poker committee), Emy Mungcal (tournament director for the Grand Finals), and the branch management of the casino sites that hosted the satellite/qualifying competitions.

Visit the Philippine Poker Tour (PPT) official web site at www.PhilippinePokerTour.com for more details about the results of the tournament.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street , Salcedo Village , 1227 Makati City . Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.