Corporate Securities Info

Bane of gov’t red tape

Amid the spike in the prices of goods and commodities in the country brought about by internal and external factors, labor organizations are demanding a nationwide adjustment of the daily minimum wage to P750.

The Employers Confederation of the Philippines is opposed to the proposal, believing it will have an inflationary effect on the economy and result in mass layoffs of employees.


That sentiment should be shared by foreign investors since any increase in the minimum wage would invariably add to their operational costs and, in the process, reduce their profits, right?

Wrong. The European Union Ambassador to the Philippines, Franz Jessen, said in a labor forum that European companies in the country were more concerned about “red tape” rather than the minimum wage issue.


He said these companies were paying their employees more than the minimum wage, and that they were here not for low cost labor but for “labor that has a certain quality that performs quite complex task.”

His complaint jibes with the recent Ease of Doing Business survey conducted by the World Bank Group (WBG) on 190 economies on how fast (a) a business can be started, (b) construction permits secured, (c) electrical connection installed, and (d) property registered in those places.

The survey ranked the Philippines 190th, with New Zealand and Singapore garnering the top two slots, respectively, and civil war-torn Somalia at the bottom of the heap.

In response to an earlier survey of a similar nature by the WBG, Congress enacted Republic Act 9485, or the Anti-Red Tape Act of 2007, that, among others, required government offices to process permits and licenses within certain periods of time and to maintain a skeletal working force during lunch breaks.

Sadly, that law failed to accomplish its objective because it was toothless. So after 11 years, Congress decided to amend it by way of Republic Act 110321 or the “Ease of Doing Business and Efficient Government Services Delivery Act of 2018,” which President Duterte recently signed into law.

The new law applies to all government offices, local government units, government-owned and -controlled corporations and other government instrumentalities, whether located in the Philippines or abroad.

In processing government transactions, it is now mandatory that they are acted upon within three working days for simple transactions, and seven working days for complex transactions.


A transaction is considered complex if it necessitates the evaluation or resolution of complicated issues by an officer or employee of the concerned government office.

In case the transaction involves “activities which pose danger to public health, public safety, public morals, public policy and highly technical application,” the processing period should not exceed 20 working days.

The maximum processing period may be extended for the same number of days on condition that the applicant is informed of that extension prior to the deadline, the reasons behind the delay and the final date of release or approval of the document or service applied for.

Complementing these time limits is the requirement that only the signatures of the three officers who directly supervise the office concerned should appear in the documents. To further expedite the process, electronic signatures or pre-signed documents with adequate security and control mechanisms may be used.

Unlike the previous law where its enforcement was left to the government offices concerned, this time an Anti-Red Tape Authority, which shall consist of a Director General and three Deputy Director Generals to be appointed by the President, has been created to ensure that officials and employees of all covered offices strictly comply with the law under pain of administrative, civil and criminal penalties.

Only time will tell if this latest effort to streamline transactions with government offices will bear fruit, or will go the way of existing laws and government rules and regulations that are long and verbose on objectives but utterly short on implementation.

Hope springs eternal.

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