Ease of Doing Business and Anti-Red Tape Act 2018

Policy and declared objectives

The State promotes integrity, accountability, proper management of public affairs and public property, and effective practices for efficient turnaround of government service delivery (Section 2).
The State aims to prevent graft and corruption through honesty and responsibility among public officials and employees (Section 2).
Agencies must promote transparency in how they transact with the public, including a program adopting simplified requirements and procedures to reduce red tape and expedite business and nonbusiness transactions (Section 2).

Coverage and key definitions

Coverage applies to all government offices and agencies, including LGUs, GOCCs, and other government instrumentalities, located in the Philippines or abroad, that provide services for business and nonbusiness related transactions (Section 3).
“Action” refers to the written approval or disapproval by a government office or agency of an application or request submitted by an applicant (Section 4).
“Business One Stop Shop (BOSS)” is a single common site or location, or a single online website/portal designated for the BPLS of an LGU to receive and process applications, receive payments, and issue approved licenses, clearances, permits, or authorizations (Section 4).
“Business-related transactions” are regulatory requirements a business entity must comply with to engage, operate, or continue to operate, including document collection/preparation, submissions to national and local government authorities, approvals, and receipt of formal certificates/permits/licenses and similar authorizations conferring eligibility to operate (Section 4).
“Complex transactions” require evaluation of complicated issues by an officer or employee, to be determined by the office concerned (Section 4).
“Fixer” is any individual (whether or not officially involved) who has access to people working in a government office and facilitates speedy completion of transactions for pecuniary gain or other consideration (Section 4).
“Government service” is the process or transaction between applicants and government offices/agencies involving applications for privileges, rights, rewards, licenses, clearances, permits, authorizations, or modification/renewal/extension acted upon in the ordinary course (Section 4).
“Highly technical application” requires technical knowledge, specialized skills, and/or training in processing/evaluation (Section 4).
“Nonbusiness transactions” are all other government transactions not falling under Section 4(c) (Section 4).
“Officer or employee” is a person employed in a government office or agency required to perform duties related to the application or request (Section 4).
“Processing time” is the time consumed by an LGU or NGA from receipt of a complete application/request with documents and payment of fees to the issuance of certification or similar document approving or disapproving (Section 4).
“Red tape” is any ineffective or detrimental regulation/rule/administrative procedure or system that produces slow, suboptimal, and undesirable outcomes (Section 4).
“Regulation” is a legal instrument giving effect to government policy intervention, including licensing, imposing information obligations, compliance with standards, and payment of any fee, levy, charge, or other statutory/regulatory requirement (Section 4).
“Simple transactions” are those requiring only ministerial actions or inconsequential issues for resolution by an officer/employee (Section 4).

System reengineering and Citizen’s Charter

Government offices and agencies must regularly undertake cost compliance analysis, time and motion studies, evaluate and improve transaction systems and procedures, and reengineer if necessary to reduce red tape and processing time (Section 5).
The Anti-Red Tape Authority coordinates with agencies covered by Section 3 to review existing laws, executive issuances, and local ordinances, and recommends repeal when outdated, redundant, and adds undue regulatory burden (Section 5).
Proposed regulations must undergo regulatory impact assessment to establish that they do not add undue regulatory burden and cost; when necessary, pilot implementation may be used (Section 5).
Upon effectivity, LGUs and NGAs must initiate review of existing policies and operations and commence reengineering pending approval of the IRR (Section 5).
Each government agency must set up an updated Citizen’s Charter with posted service standards at agency premises, websites, and published materials detailing a uniform checklist of requirements, procedure to obtain service, responsible person per step, maximum time to conclude the process, documents if necessary, fees if necessary, and the procedure for filing complaints (Section 6).

Zero-contact, access rules, and time limits

A zero-contact policy is imposed: except during preliminary assessment and evaluation of sufficiency of submitted requirements, no government officer or employee may have contact in any manner with an applicant/requesting party concerning an application/request unless strictly necessary (Section 7).
Once the DICT completes a web-based software-enabled business registration system acceptable to the public, transactions must be coursed through such system, and agencies including LGUs must adopt a zero-contact policy (Section 7).
The head of each office/agency is primarily responsible for implementing the Act and is accountable to the public for fast, efficient, convenient, reliable service; transactions/processes are deemed made with permission/clearance from the highest authority having jurisdiction (Section 8).
Government offices and agencies must adopt rules on accessing services, including:
- Acceptance of applications/requests: accepting written applications/requests/documents; performing preliminary assessment to ensure expeditious action; immediately informing applicants of deficiencies limited to those listed in the Citizen’s Charter; assigning a unique identification number for all subsequent transactions; and issuing an acknowledgement receipt with required details (Section 9(a)).
- Action and processing times: acting within Citizen’s Charter processing times not longer than 3 working days for simple transactions and 7 working days for complex transactions from receipt of complete requirements (Section 9(b)(1)).
- For activities posing danger to public health, public safety, public morals, public policy, or highly technical applications, the processing time must be no longer than 20 working days or as determined by the agency, whichever is shorter (Section 9(b)(1)).
- The maximum time may be extended only once for the same number of days; the office must notify the applicant in writing of the reason and final release date, with the applicant signing to evidence notice (Section 9(b)(1)).
- For applications requiring approval of the proper local Sangguniang Bayan/Panlungsod/Panlalawigan, the local legislative body has 45 working days, extendable for another 20 working days, and must cite reasons and remedial measures upon denial (Section 9(b)(1)).
- Processing times are suspended when delay is due to force majeure or natural/man-made disasters causing damage/destruction of documents and/or computerized/automatic processing system failure, with appropriate adjustments (Section 9(b)(1)).
- No return without action: no application/request shall be returned without appropriate action; disapproved applications require formal written notice within prescribed processing time stating reasons for disapproval (Section 9(b)(2)).
- A finding by a competent authority of violation of other laws by the applicant constitutes a valid ground for disapproval, without prejudice to other grounds under the Act and other pertinent laws (Section 9(b)(2)).
- Denials for access: all denials must be fully explained in writing, stating the name of the person making the denial and the grounds; denials are deemed made with permission/clearance from the highest authority (Section 9(c)).
- Limitation of signatories: documents must have a maximum of three (3) signatures, representing officers directly supervising the office/agency; alternates must be designated if an authorized signatory is on official business or leave; electronic signatures or pre-signed instruments with adequate security/control may be used (Section 9(d)).
- Electronic versions: covered agencies must develop electronic versions of licenses/clearances/permits/certifications/authorizations when applicable, with the same level of authority, printable by applicants (Section 9(e)).
- Working schedules: heads must adopt working schedules ensuring applicants within premises before end of official hours are served even during lunch break and after regular working hours (Section 9(f)).
- Identification card: employees transacting with the public must be provided an official identification card visibly worn during office hours (Section 9(g)).
- Public assistance/complaints desk: each office/agency must establish a public assistance/complaints desk in its offices (Section 9(h)).

Automatic approval and extensions

If an agency fails to approve or disapprove an original application/request for license, clearance, permit, certification, or authorization within the prescribed processing time, the application/request is deemed approved, provided all required documents are submitted and all required fees/charges are paid (Section 10).
The acknowledgement receipt plus the official receipt for payment is sufficient proof and has the same force and effect as the license/clearance/permit/certification/authorization under the automatic approval mechanism (Section 10).
If an agency fails to act on renewal applications within prescribed processing time, the license/clearance/permit/certification/authorization is automatically extended; the IRR must provide a listing of simple, complex, highly technical applications, and activities posing danger to public health, public safety, public morals, or public policy (Section 10).

Streamlined procedures for business licensing

LGUs must implement revised guidelines for issuing local business licenses, clearances, permits, certifications, and authorizations:
- Use a single unified business application form for new applications and renewals consolidating applicant information from various local departments, including fire clearance from the Bureau of Fire Protection (BFP), available online through technology-neutral platforms and hard copies at all times in designated areas (Section 11(a)).
- Establish Business One Stop Shop (BOSS) within cities/municipalities’ Negosyo Center as provided in Republic Act No. 10644 (Go Negosyo Act), with a queuing mechanism; implement colocation of offices including treasury, business permits and licensing, zoning, and BPP, among others for starting a business and dealing with construction permits (Section 11(b)).
- Automate the business permitting/licensing system or set up an electronic BOSS within three (3) years from effectivity; provide electronic versions of licenses/clearances/permits/certifications/authorizations with the same level of authority; the DICT must make available software; DICT, DTI, and DILG must provide technical assistance for computerization (Section 11(c)).
- Issue other local clearances (e.g., sanitary permits, environmental and agricultural clearances) together with the business permit to lessen transaction requirements (Section 11(d)).
- Business permits are valid for one (1) year, with LGUs allowed an option to renew within the first month of the year or on the anniversary date of issuance (Section 11(e)).
- Barangay clearances and permits related to doing business are applied/issued/collected at the city/municipality according to Act processing time, with collections remitted to respective barangays (Section 11(f)).
Republic Act No. 7160 (Local Government Code of 1991) specifically Article IV, Section 152(c) is amended accordingly (Section 11(f)).

Fire safety clearances and anti-selling rule

For issuance of Fire Safety Evaluation Clearance (FSEC), Fire Safety Inspection Certificate (FSIC), and certification of fire incidents:
- Issuance of FSEC and FSIC must be no longer than seven (7) working days (Section 12(a)).
- For new business permit application, the FSIC issued during occupancy permit stage is sufficient basis for issuing FSIC for business permit requirement (Section 12(b)).
- For renewal, within three (3) working days from application, the BFP must present the FSIC to the city/municipality through the FSIC copy or negative/positive list; the business must inform BFP and submit documentary requirements if renovations/alterations occur, made 30 working days before expiration of the business permit (Section 12(c)).
- If the BFP fails to furnish the FSIC or inform through negative/positive list within three (3) working days, the business is deemed to have a temporary valid FSIC, which serves as basis for automatic renewal of business permit (Section 12(d)).
- Certification of fire incidents for fire insurance purposes must be no longer than twenty (20) working days and may be extended only once for another twenty (20) working days (Section 12(e)).
- The BFP and its officials/employees may not sell, offer to sell, or recommend specific brands of fire extinguishers and other fire safety equipment to applicants/business entities; violations carry imprisonment of 1 year to 6 years and a penalty of not less than PHP 500,000 but not more than PHP 2,000,000 (Section 12(f)).
- The BFP must colocate with the BOSS or in an appropriate designated area to assess and collect fire safety inspection fees (Section 12(g)).
- The BFP may enter into agreements allowing cities/municipalities to be deputized as assessors and/or collecting agents for fire safety inspection fees (Section 12(h)).
- The BFP must develop and adopt an online/electronic mechanism for fee assessment, collecting/accepting payments, and sharing/exchanging relevant data for business permit processing (Section 12(i)).
Republic Act No. 9514 (Revised Fire Code of the Philippines of 2008) provisions are amended accordingly (Section 12).

Central portal, business databank, and connectivity

The DICT is primarily responsible for establishing, operating, and maintaining a Central Business Portal (CBP) or similar technology to eliminate red tape, avert graft/corruption, promote transparency, and sustain ease of doing business (Section 13).
The CBP must serve as a central system to receive applications and capture data involving business-related transactions, including primary and secondary licenses and business clearances/permits/certifications/authorizations issued by LGUs (Section 13).
The CBP may provide links to online registration/application systems established by NGAs (Section 13).
The DICT must issue rules and guidelines, in consultation with the National Privacy Commission (NPC), NGAs, and LGUs, on CBP establishment/operation/maintenance and the use of electronic signatures (Section 13).
The DICT must implement an Interconnectivity Infrastructure Development Program for interconnectivity between and among NGAs and LGUs (Section 13).
The DICT must conduct information dissemination campaigns with coordination of relevant entities to raise public awareness of CBP and improved access (Section 13).
The Philippine Business Databank (PBD) must be established, managed, and maintained by the DICT within one (1) year from effectivity in coordination with concerned agencies, providing access to data and information for verifying validity/existence and other relevant information about registered business entities (Section 14).
Concerned NGAs and LGUs must link their databases to the system or periodically submit updates (Section 14).
Documents already submitted to an agency that has access to the PBD must no longer be required by other NGAs/LGUs with the same access; data/document crosschecking and retrieval must occur through the PBD (Section 14).
A city/municipal business process and licensing office must not require documents already provided to local government departments for other business-related licenses/clearances/permits/certifications/authorizations, including tax clearance, occupancy permit, and barangay clearance (Section 14).
The Authority and DICT must develop a fast and reliable interconnectivity infrastructure; processing/approval for installation and operation of telecommunication/broadcast towers, facilities, equipment, and service must follow:
- Seven (7) working days for those issued by the barangay,
- Seven (7) working days for those issued by LGUs,
- Seven (7) working days for those issued by NGAs (Section 15).
If the granting authority fails to approve or disapprove within prescribed time, the application is deemed approved; where an appropriate local legislative body is necessary, a non-extendible period of twenty (20) working days is prescribed (Section 15).
For homeowners and other community clearances, homeowners association officers must refer within ten (10) working days pursuant to Section 10(k) of Republic Act No. 9901 (Magna Carta for Homeowners and Homeowners Associations); homeowners association has a non-extendible period of thirty (30) working days to give consent/disapproval; if disapproval occurs, granting authority must notify applicant within the prescribed period of reasons and remedial measures (Section 15).
Within three (3) months after approval of the IRR for this Article, the Authority in coordination with DICT must review and recommend repeal of outdated, redundant, and unnecessary licenses/clearances/permits/certifications/authorizations required by NGAs, LGUs, and private entities (Section 15).

Anti-Red Tape Unit, Authority, and Advisory Council

The Civil Service Commission (CSC) must maintain an anti-red tape unit in its central and regional offices, use Report Card Survey findings for purposive and integrated government-wide human resource systems and programs, and receive/review/hear/decide complaints on erring officials/employees and noncompliance with the Act (Section 16).
Anti-Red Tape Authority is created and organized within six (6) months from effectivity; it is attached to the Office of the President (Section 17).
The Authority’s functions include implementing/overseeing national anti-red tape and ease of doing business policy; implementing reform initiatives to improve the Philippines’ ranking; monitoring compliance and issuing notice of warning; initiating investigations and referring cases or filing cases for violations; assisting complainants in filing ease with CSC/Ombudsman/courts; recommending reforms for regulatory management; reviewing proposed major regulations using regulatory impact assessments subject to proportionality rules; conducting regulatory management training; preparing regulatory management manuals; providing technical assistance and advisory opinions; ensuring dissemination/public access through Philippine Business Regulations Information System; enlisting CSC/DTI assistance; and performing necessary acts (Section 17).
The Authority is headed by a Director General appointed by the President whose appointment is co-terminous with the President’s tenure; the Director General has benefits equivalent to the rank of Secretary (Section 18).
The Director General is assisted by three (3) Deputy Directors General for legal, operations, and administration/finance, all career officials per existing laws/rules; Deputy Directors General have benefits equivalent to the rank of Undersecretary and are appointed by the President (Section 18).
The Director General determines organizational structure including regional/field offices, qualification standards, staffing pattern, and compensation in accordance with existing laws; if regional/field offices are absent, the Authority may deputize DTI regional personnel to perform powers/functions (Section 18).
An Ease of Doing Business and Anti-Red Tape Advisory Council is created, composed of:
- DTI Secretary as Chairperson,
- Director General of the Authority as Vice-Chairperson,
- DICT, DILG, and DOF Secretaries as members,
- two (2) private sector representatives as members (Section 19).
Department Secretaries may designate representatives (permanent sitting; no less than Undersecretary rank) whose acts are considered acts of their principals (Section 19).
Private sector representatives are appointed by the President for a term of three (3) years and may be reappointed only once, from nominees of reputable business groups/associations (Section 19).
The Council formulates policies and programs to enhance competitiveness and ease of doing business; it has functions including planning/drafting national policy; recommending regulatory management improvements; designing systems improving service delivery; authorizing working groups/task forces; proposing legislation amendments/modifications; periodically reviewing competitiveness performance/issues; providing technical assistance/advisory opinions; recommending measures to promote transparency and efficiency; and other functions directed by the President (Section 19).
The Authority serves as Secretariat to the Council, headed by its Deputy Director General for operations (Section 19).
The National Competitiveness Council (NCC) under Executive Order No. 44 (Series of 2011) is renamed and reorganized as the Council; Executive Order No. 571, Executive Order No. 4-1, and Administrative Order No. 38 are repealed accordingly (Section 19).

Enforcement: violations, liabilities, jurisdiction

All offices/agencies providing government services must be subjected to a Report Card Survey initiated by the Authority in coordination with the CSC and the Philippine Statistics Authority (PSA) to check compliance with Citizen’s Charter provisions and Act provisions and measure agency performance (Section 20).
The Report Card Survey must include information/estimates of hidden costs incurred by applicants/requesting parties, including bribes and payments to fixers; results must also serve as a basis for awards/recognition/incentives for excellent service delivery (Section 20).
A feedback mechanism must be established in all agencies covered, and results must be incorporated in their annual report (Section 20).
Violations and persons liable include any person who performs or causes performance of these acts (Section 21):
- Refusal to accept an application/request with complete requirements without due cause;
- Imposition of additional requirements beyond the Citizen’s Charter;
- Imposition of additional costs not reflected in the Citizen’s Charter;
- Failure to give written notice of disapproval;
- Failure to render services within prescribed processing time without due cause;
- Failure/refusal to attend to applicants within premises prior to end of official working hours and during lunch break;
- Failure/refusal to issue official receipts; and
- Fixing and/or collusion with fixers for economic and/or other gain/advantage.
Penalties and liabilities apply as follows (Section 22):
- First offense: administrative liability with six (6) months suspension, except that fixing/collusion with fixers under Section 21(h) triggers the penalty and liability under Section 22(b) (Section 22(a)).
- Second offense: administrative liability and criminal liability of dismissal from the service, perpetual disqualification from holding public office, forfeiture of retirement/benefits, and imprisonment of one (1) year to six (6) years with a fine of not less than PHP 500,000 but not more than PHP 2,000,000 (Section 22(b)).
- Criminal liability may also arise through commission of bribery, extortion, or deliberate/malicious acts to solicit favor in cash or in kind; the Revised Penal Code and other special laws apply (Section 22(b)).
Administrative findings under the Act do not bar filing criminal, civil, or other charges under existing laws arising from the same act or omission (Section 23).
Administrative jurisdiction over violations vests in either the CSC or the Office of the Ombudsman, as determined by appropriate laws and issuances (Section 24).

Immunity for cooperating accused

A public official/employee or any person charged with another offense under the Act who voluntarily gives information or testifies may be exempt from prosecution in the case(s) where the information/testimony is given (Section 25).
Discharge may be granted and directed by the investigating body or court upon application/petition before termination of the investigation (Section 25).
Discharge requires: absolute necessity of testimony; no other direct evidence available except the testimony; substantial corroboration in material points; no prior conviction of a crime involving moral turpitude; and that the informant is not the most guilty (Section 25(a)-(e)).
Evidence in support of discharge automatically forms part of the records; denial of discharge makes the sworn statement inadmissible as evidence (Section 25).

Transition, oversight, appropriations, IRR

Automation of business-related transactions must be implemented by the DICT within three (3) years from effectivity by developing necessary software and technology-neutral platforms and web-based accessible infrastructure; the DICT must ensure third (3rd) to sixth (6th) class municipalities/provinces receive equipment/connectivity, ICT platform, training, and capability building to ensure LGU compliance (Section 26).
Transitional provisions include:
- The Director General, in consultation with DTI, determines organizational structure and personnel complement; the DTI-Competitiveness Bureau regulatory improvement/ease units serve as temporary secretariat until the Authority is staffed (Section 27(a)).
- Staff of the DTI-Competitiveness Bureau may be absorbed or transferred laterally to the Authority without diminution of rank/position, salaries, and other emoluments once the staffing pattern and plantilla are approved (Section 27(a)).
- The Authority gathers regulatory management programs and anti-red tape initiatives and requires DTI, CDA, NCC, DOF, DAP, and NEDA to submit a report on project status related to regulatory management (Section 27(b)).
- The Authority, with CSC and the Council, must conduct information dissemination campaigns in NGAs and LGUs to inform them of the Act’s amendments to Republic Act No. 9485 (Section 27(c)).
A Congressional Oversight Committee on Ease of Doing Business (COC-EODB) is created for implementation monitoring, composed of five (5) Senate members and five (5) House members with specified committee chairpersons; it is jointly chaired by the Chairpersons of the Senate Committees on Trade and Commerce and Entrepreneurship and the House Committee on Trade and Industry (Section 28).
The oversight committee ceases to exist after five (5) years from effectivity (Section 28).
The COC-EODB secretariat is drawn from existing personnel of the Senate and House committees comprising the COC-EODB (Section 28).
Appropriations