Senator Zubiri's Ease of Doing Business Act of 2017 Sponsorship Speech

Senator Miguel “Migz” Zubiri, chair of the Senate committee on trade, commerce and entrepreneurship is pushing for a legislation that could help improve the country’s business climate as a means to stimulate the economy. Below are the highlights of Sen. Zubiri’s Ease of Doing Business Act of 2017 Sponsorship Speech delivered during a plenary session on February 9, 2017:

On the competitiveness and conduciveness of the Philippines’ business environment

Based on the 2016 and 2017 ranking in the Doing Business report of the World Bank, the Philippines has climbed in the ranking by 4 notches or from rank 103 in 2016 to rank 99 in 2017. However, despite this gain, notable in the report is our rank on Starting a Business where the Philippines fall below 6 notches from 2016.

In the Global Competitiveness Report for 2015-2016, the Philippines also improved its ranking by 5 notches, from rank 52 in 2015 to rank 47 in 2016. The country is steadily improving its ranking for the last four years.

The Philippines ranked 6th in the ASEAN in the Infrastructure Pillar. Singapore, Malaysia, Thailand, Indonesia and Vietnam are ahead of us in the ranking. Inadequate infrastructure is often cited as a problem in the improvement of the country’s investment climate.

On the inefficient government bureaucracy

The Philippines has 16 procedures in Starting a Business compared to our ASEAN neighbors like Singapore and Malaysia which have 3 procedures each.”

In Registering a Property, the Philippines has 9 procedures while Thailand has 3, Singapore and Lao PDR have 4 each, and Indonesia and Vietnam have 5 each.

In Paying Taxes, it is so embarrassing that the country has 36 payments that a firm needs to make within a year. While Singapore has 5 payments, Malaysia 13, Brunei 27 and Myanmar 31 payments.

Welcoming a healthy business environment

It is before us now, through this bill, to create an environment that will be conducive to businesses to register, comply and operate. It will be easier to create and register businesses, comply with regulatory and other governmental requirements and operate in an environment that will hasten their growth. It will also encourage foreign investments to the country. It will create more economic activities which means more income for the government and most especially more employment opportunities for our people and more income for them.

Not a panacea

This bill intends to cure the defects in the current system of business community’s transactions with the government and prescribes a definitive period within which government actions on applications for business license, clearance or permits are to be completed. However, this bill does not present itself to remedy all the problems. It intends to create an environment for ease of doing business in both the national and local governments by streamlining processes and simplifying the requirements of business transactions with the government, and prescribing a definitive period within which the application will be acted upon.

On the salient features of the bill

The checklist of requirements, step-by-step procedure and schedule of fees for the issuance of a license, clearance and/or permit shall be conspicuously posted in the premises of and in the respective websites of national and local government licensing and permitting agencies and linked to the Central Business Portal. Business entities shall be limited to submitting only the requirements provided in the checklist. If additional documents will be required, the applicant shall be officially notified of the reasons for the submission of such additional documents.

This proposed measure will institutionalize a one-stop business facilitation service or the Business One Stop Shop (BOSS) for the city/municipality’s business permitting and licensing system. Cities/municipalities with e-BOSS shall develop electronic versions of licenses, clearances and/or permits with the same level of authority, which may be printed by businesses in the convenience of their offices. Cities/municipalities, which use manual signatures, shall designate alternative signatories in the absence of the authorized approving authority.

On the role of DICT

The Department of Information and Communications Technology (DICT) is mandated to provide qualified LGUs, for free, the software for the computerization of the BPLS. Within a period of one (1) year from the effectivity of the law, cities/municipalities shall as far as practicable automate their business permitting and licensing system (BPLS) or set up an electronic-Business One Stop Shop.

The DICT shall establish, through the Government Infrastructure, a cloud-native Central Business Portal (CBP) or other similar technology as the DICT may prescribe which, shall serve as a central system to receive application and capture application data from business entities. NGAs and LGUs can connect to the CBP and use its facilities.

Business licensing and/or permitting agencies such as but not limited to the DTI, SEC, CDA, BIR, and local government units shall access the Philippine Business Registry Databank to verify the validity, existence and other information relevant to a business entity.

Submission of documents already provided by an applicant to an agency with access to the Philippine Business Registry Databank shall no longer be required by other agencies having similar access.

Penalties for violators

Criminal liability will also attach once the violation was done deliberately and maliciously with the purpose of harassing the applicant and/or to solicit favor in cash or in kind. In such case, the provisions of the Revised Penal Code shall apply and such other applicable penal laws.

An anti-corruption measure

The beauty of this law is not just making it easier to do business in the country, it is also an anti-corruption measure. This practice [pagbibigay ng lagay] is a disgrace to the Filipino race. This practice in many government offices, both national and local is the disease we also want to cure. This law is an attempt in that direction as it will make it more transparent the processing of business licenses, clearances and permits which are traditionally a haven for corruption. This law imposes stringent measures to prevent the commission of corruption in such transactions.

To facilitate efficiency of tax administration

It is a well settled principle that the lifeblood of any government are the taxes. And taxes come from many sources but mainly from the income and other taxes imposed on business entities, whether corporations, partnerships or single proprietorships or MSMEs or large and multi-national corporations, and from the income taxes of the workforce they employ. In other words Mr. President, the more business entities operating in the country the more taxes that can be collected by both the national and local governments and perhaps, when that happens, we will no longer need to pass the Tax Reform Bill or its provisions which remove certain tax benefits to some marginalized sectors.

Entrepreneurship

Many have said that one way to reduce poverty and attain inclusive growth in the country is to make an “entrepreneurial nation” out of our citizen. This bill will tremendously help attain that goal. It will encourage our citizens to venture into business and provide employment to our people. Also, it will encourage those in the informal economy to register and join the formal economy.

You can access the full and unedited transcript of the speech at: https://www.facebook.com/notes/senator-migz-zubiri/ease-of-doing-business-act-of-2017-sponsorship-speech/1519655701385705