Relaxed regulatory compliance
Today is Day 107 of the enhanced and general community quarantines imposed by the government in Luzon and other parts of the country to contain the spread of the new coronavirus disease (COVID-19).The lockdown is reputed to be the longest and strictest among countries hit by the crisis. With the reported outbreak of new COVID-19 cases in some areas outside Metro Manila, the standstill may extend up to July.Although transportation facilities are still limited, most businesses have resumed operations in accordance with the guidelines laid down by the government agency tasked with seeing the country through the pandemic.
It’s unfortunate the restriction on the movement of people began in the middle of March (or the first quarter), which is the traditional period for the filing of income tax returns, audited financial statements and other papers with government regulatory agencies, e.g., Bureau of Internal Revenue, Bangko Sentral ng Pilipinas and Securities and Exchange Commission.To the credit of these offices, they have, without waiting for their supervised entities to ask, extended or relaxed the periods within which to submit the required filings.
In addition, they have allowed the submission of those documents through email, but subject to the condition that when lockdown restrictions are lifted, the hard copies would be promptly filed.
The more “generous” offices have waived any monetary penalties that may have arisen on account of non- or late submission.In spite of such liberality, however, some companies may not be able to meet the filing deadlines because of, among others, the unavailability of the supporting documents, shortage of funds, or failure of the staff assigned to perform that task to report for work due to force majeure, such as flight restrictions.
While it is true the internet and other means of communications allow for the speedy transmission and exchange of data, there are documents that have to be personally signed by their authorized signatories and then notarized.
Some regulatory agencies do not accept filings with electronic or digitized signatures despite the fact there is a law that recognizes the validity of that scheme under certain conditions.The requirements on actual signatures and notarization are understandable because of the ease by which websites can be hacked and spurious documents prepared.
On the part of the companies, physical filing is preferred because the documents are stamped “received” and they do not have to worry about the government office’s server crashing and bringing down with it their documents.
Thus, the will and ability to promptly comply with regulatory obligations is sometimes stymied by circumstances beyond the control of the filing parties.The strict enforcement of regulatory requirements is laudable, especially if done equally or without taking into account the standing of the supervised entity.But bear in mind the pandemic is a fortuitous event that happened with a speed and scale that the Philippines and the world have not experienced before. The national and local governments, including private businesses, were caught flatfooted by its quick spread.The lockdown ordered by the government is unprecedented. Never in the history of the country has something similar been done and at such severity and length of time.
This is an appeal to government’s regulatory offices to be liberal or more considerate in the evaluation of lapses, if any, committed by their supervised entities.
While it is true that some regulatory obligations require strict compliance, regulators have the discretionary authority to make adjustments in their enforcement when there are circumstances that justify that action.Considering that the pandemic has been bad enough (if not devastating for some businesses), the regulatory agencies can help mitigate that condition by adopting a “caring” attitude in the implementation of their rules. INQ
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