Investing in the Philippines: Improve the Efficiency of Government Agencies

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DURING investment missions to and from the Philippines, government officials and local businessmen have encouraged investments in the Philippines and offered support for foreign investors interested to invest here.

My question today is: Are government agencies  in the Philippines really supportive of investments?

How do they compare with similar agencies in neighboring countries with regards to ease of investment procedures, clarity of regulations and timeliness?

Let’s summarize the experience of several local and foreign investors trying to expand their investments here:

Long delays

WE are part of the many companies at the receiving end of very long delays, lack of clarity about requirements, impossibility to engage directly, and a non-working web site (with special reference to one important government organization—the SEC or Securities and Exhange Commission).

It takes months or years to achieve what can be done in weeks in Singapore, such as establishing a new company, or proceeding with a capital increase, capital infusion, etc.

Lack of regulatory clarity

These are some of the issues have been encountered:

When making inquiries over the phone, different people in the same group can come up with varying answers, and if this is made via formal query e.g. via email, there’s usually no response.

Lack of proper implementation re: zero face-to-face policy: their suggestion to use their web portal has not been properly handled as there is trouble accessing and navigating the site.

Poor database management

There appears to be a filing or database management issue. At the onset of some of its activities, the SEC asks businesses to present documents that the SEC already approved or received in the past.  It would be reasonable to ask for this if there’s a conflict between the SEC and client records, but there is no prior verification of such from the agency before asking businesses to produce the documents that they already have.

Basing on the news articles, it seems that local conglomerates can get their SEC requirements processed fairly quickly compared to the rest of enterprises. Is there an express lane that the “others” can also avail of if needed?

The situation described is creating significant delays and frustration in proceeding with capital increases, capital infusion, and interaction with the SEC which affect business operations, growth, employment, and certainly revenues for the government in the form of taxes.

It does not have to be this way, and it benefits no one.

The SEC situation also undermines the Ease of Doing Business Act, which standardizes deadlines —three days for simple transactions, seven days for more complex ones, and 20 days for highly technical ones—for government transactions and business permits processing. My question: is the Anti-Red Tape Authority (ARTA) really helping?

ARTA seems to be more interested in joining hands with the Philippine Ports Authority (PPA) to create the container tracking system, which is extremely negative for business in terms of cost and procedures. ARTA failed to consider the consequential impact of this negative PPA project on industry and consumers.

The list of bureaucratic delays is much longer but I have a space limit.

In conclusion, the government must look seriously at improving the country’s investment regulatory processes, and a lot needs to be done to assist investors and business at large. I am sure that the business sector is willing to support the national and local governments to create the investment environment President Ferdinand R. Marcos Jr. outlines during his international missions.

Being involved in integrity and ethics activities in the country, allow me to add that the government needs to increase transparency on government transactions and processes.

Published at 2023-03-13 by Puerto Parrot
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