On May 28, 2018, Republic Act (RA) No. 11032 or the Ease of Doing Business (EDB) Act was passed. The EDB Act amended the Anti-Red Tape Act of 2007 to encourage competitiveness and improve the overall business environment. These amendments are aimed at providing the public with quality government service as quickly as possible while substantially reducing expense, inconvenience, and wasted time.
Broadly, RA No. 11032 requires government agencies to streamline business registration and compliance procedures.
The following are the 15 specific salient points of the law that prospective business owners need to know:
- Covered Agencies and Offices
The law covers Local Government Units (LGU’s), Government Owned and Controlled Corporations (GOCC’s), and other government offices whether in the Philippines or abroad that provide services covering business and non-business-related transactions as defined by RA 11032.
- Citizen’s Charter
Covered entities are now required to pass a Citizen’s Charter which is a comprehensive and uniform checklist of requirements for each type of application or request before said government agencies.
The Charter provides for the persons responsible for each step of the application or request, the maximum time to conclude the process, the documents to be presented by the applicant or requesting party, the amount of fees, and the procedure for filing complaints.
- Zero-contact Policy
As a rule, no contact in any manner with any requesting party concerning an application or request shall be allowed. The only exceptions are (a) during the preliminary assessment of the request and (b) during the evaluation of the sufficiency of documents submitted.
- Acceptance of Applications or Requests
All officers or employees are required to accept written applications, requests and documents or both, submitted by applicants or requesting parties. The receiving officer or employee shall then perform a preliminary assessment on the application or the request submitted and immediately inform the applicant or requesting party of the deficiency in the requirements submitted. The deficiency shall be limited to those enumerated in the Citizen’s Charter.
- Prescribed Processing Time
For simple transactions, the processing time shall not be longer than 3 working days. For complex transactions, 7 working days.
For activities which pose danger to public health, public morals, public safety, public policy, and highly technical transactions, 20 working days.
For applications or requests for license, clearance, permit, certification or authorization requiring the approval of the local Sangguniang Bayan, Sangguniang Panlungsod, Sangguniang Panlalawigan, 45 working days which can be extended for another 20 days.
The Citizen’s Charter may provide for a different processing time if it will not be longer than what is prescribed by the EDB Act.
- Denial of Application or Request
The law now requires that the denial of the application be explained in writing stating the name of the person who denied the same and the grounds upon which denial is based.
- Electronic Versions
Covered agencies and offices are required to develop electronic versions of licenses, clearances, permits, certifications, or authorizations. These electronic versions shall have the same level of authority as hard copies and may be printed by the applicants or requesting parties.
- Automatic Approval or Automatic Renewal
Provided that the applicant or the requesting party has: (a) submitted complete documentary requirements and (b) paid all the required fees and charges, the failure of the government agency or office to approve or disapprove the original application or request within the prescribed processing time shall be deemed an approval of the concerned office or agency.
- Streamlined Procedures
LGU’s are required to have a single or unified business application form which consolidates all information of applicants or requesting parties by various local government departments.
Under the law, they are now required to have Business One Stop Shops (BOSS), which are one-stop business facilitation offices for the city or municipality’s business permitting and licensing services as well as to receive and process manual and/or electronic submissions.
Further, LGU’s are required to set up the BOSS electronic system within 3 years from the effectivity of the Act.
- Central Business Portal (CBP)
Covered agencies and offices must create an online Central Business Portal (CBP) that will capture application data for business-related transactions and provide links to the online registration systems established by various National Government Agencies (NGA).
- Philippine Business Database (PBD)
The Act requires the Department of Information and Communications Technology (DICT) to establish, manage, and maintain a PBD that shall provide NGA’s and LGU’s access to data and information of registered business entities.
- Anti-Red Tape Authority
An Anti-Red Tape Authority is established to: (a) monitor and evaluate compliance of agencies and issue a notice of warning to erring or non-complying employees or officials; (b) initiate investigation motu proprio or upon receipt of complaint, refer the same to appropriate agency or file cases for violations; (c) assist complainants in filing necessary cases with CSC, Ombudsman, and other appropriate courts; (d) recommend policies; and (e) provide technical assistance and advisory opinions in the review of proposed national or local legislation.
- Advisory Council
The EDB Act also establishes an Advisory Council which shall formulate policies and programs that will aid the Anti-Red Tape Authority to perform its functions and enhance the country’s competitiveness as well as improve the ease of doing business.
Any person who performs or causes to perform the following has committed a violation of the Act: (a) Refusal to accept an application or request with complete requirements without due cause; (b) Imposition of additional requirements or fees other than those required in the Citizen’s Charter; (c) Failure to give the applicant or requesting party a written notice of disapproval; (d) Failure to render government service within prescribed processing time; (e) Failure to attend to applicants or requesting parties who are within their premises prior to end of official working hours and during lunch break; (f) Failure or refusal to issue official receipts; and (g) Fixing and/or collusion with fixers.
- Penalties and liabilities
Violations of the Act shall be dealt with as follows:
First Offense – an administrative liability with 6 months suspension will be imposed, provided that in case of fixing and/or collusion fixers, penalty and liability for the second offense shall apply.
Second Offense – administrative and criminal liability for dismissal from the service, perpetual disqualification from holding public office, forfeiture of retirement benefits and imprisonment of 1 to 6 years with a fine of not less than P500,000 to not more than P2,000,000.
Criminal liability will also be incurred by those who commit bribery, extortion, or when violation was done deliberately and maliciously to solicit favor in cash or kind.
Administrative jurisdiction is vested in the Civil Service Commission (CSC) or Office of the Ombudsman, as determined by appropriate laws.