Red tape is anti-progress

One of the serious hindrances to our economic progress is the unnecessary delays, and added illicit costs, in conducting business in our country. We must untangle this menace and start opening the flow of investments for new ventures and the expansion of operations of the enterprises that are already here.

An average of 13 procedures must be hurdled to start a business in the Philippines. At least 22 to start operating a physical facility such as a manufacturing plant. Then, 13 various taxations during operations.

In my personal experience, the birthing process will take weeks from applying your commercial entity at the Securities and Exchange Commission (SEC), to being registered in the Bureau of Internal Revenues (BIR), up to securing the necessary permits in the city or municipality. A total of at least 30 days to accomplish the basic business registration if you’re lucky and not give up easily at this stage.

And this is only the start. From feedback, a lot of foreigners are dismayed with this tedious registration procedure, especially those who are from the more advanced economies. Of course, excess investible funds would usually originate from such progressive countries.

It is not surprising that in the 2019 World Bank report on ease of doing business, our country ranked 95th out of 190 economies. The parameters include registration processes, construction permits, tax management, remittances, labor situation, arbitrations and other measurements that influence the conduct of businesses in the countries observed.

Woes in the telco and IT industries remain. A case in point is the hardship that companies in the telecommunication and information technology industries must endure regarding their needed protection in expanding their infrastructure. While it is expected that we are in a constant blame game with the issues on their services such as drop-calls and weak signals, we must also fairly consider what they desperately need in order to improve their services to us.

To enjoy the level of efficiency in these sectors and be at par with global standards, the players must build at least 50,000 cell sites. At present, only around 16,500 towers serve the more than 113 million subscribers who are mostly heavy users. Being the so-called texting capital of the world, many Filipinos are glued to their social media accounts for at least four to seven hours daily.

To build one cell site, at least 25 permits must be secured. This does not include issues on right-of-way which will be an entirely different arena. Around eight months will be needed for the permitting stage. And at this point, there are rampant instances of lower bureaucrat corruption abuses. In fact, on several occasions, I have received complaints against barangay officials harassing tower companies prior to granting the crucial local permits. Consistently, I have coordinated them with either the National Bureau of Investigation (NBI) or the Criminal Investigation and Detection Group (CIDG) for the urgent action, preferably entrapment. These abusive officials must be sued and put behind bars.

Litigation is savior. It’s unavoidable that business groups will resort to filing of legal cases to protect their interest and hopefully serve their market after a prolonged tussle. At times, such legal battle is drawn against the government agencies that are supposed to be tasked in making the lives of consumers easier.

The recent court victory of News and Entertainment Network Corp (Newsnet), an affiliate of NOW Corp. of renowned businessman Mel Velarde, against the National Telecommunication Commission (NTC), is a trophy case that exceptionally proves that there’s hope. In this recent landmark decision, the Court of Appeals compelled NTC to respect and follow the February 2020 order of the Anti-Red Tape Agency (ARTA) to “automatically approve Newsnet’s application for the issuance of a certificate of public convenience (CPC).” This has allowed the company to deliver its interactive pay television and multi-media services in South Luzon, North Luzon, the Visayas and Mindanao in the 25.35 GHz and 26.35 GHz frequencies.

This showcased the granting of an automatic approval of licenses once the concerned government agencies have failed to grant such permits within the prescribed approval period mandated by the Anti-Red Tape Act of 2007 and the Ease of Doing Business Act of 2018.

By operations of the relevant laws, approvals must be limited to three working days for simple applications. Seven days for complex applications. And 20 days for applications involving technical studies. Well, we know of course that such provisions don’t really happen.

May the NOW case serve as an inspiration – or warning.