10 minutes for permits mean government means business

Department of the Interior and Local Government (DILG) BenHur Abalos should order his 1,500 town and city mayors to process business permits in 10 minutes or less. A business permit in 10 minutes is the best proof that the government means business.

Ten minutes is the global standard for processing business permits. That is how it is done in countries like New Zealand, Canada and Singapore.   These are much smaller countries than the Philippines in population, although infinitely richer. Yet, they set the global standard in the efficiency, competence and honesty of their government.

Precisely because our country of 114 million people is less than rich, our government should offer more to its businessmen and investors. That means faster business permit processing, of just 10 minutes.

A quickie business permit will unleash tremendous entrepreneurial energy, especially from our one million SMEs who cannot start up or expand because of delays in business permits.

Among the six major countries of the ten-member Association of Southeast Asian Nations (ASEAN), the Philippines is the clear laggard, at No. 6 – in terms of Gross Domestic Product (GDP), GDP growth rate, GDP per capita (per person), GDP growth rate per capita, export earnings and foreign direct investments (FDI). Among the ASEAN Big Six, the Philippines also has the highest annual average inflation rate, the highest unemployment rate, the highest poverty incidence compared with Singapore, Malaysia, Thailand, Indonesia and Vietnam.

Why? There is not enough food produced locally. There are not enough jobs. A food shortage means higher inflation because food is half of a poor man’s consumption. Food shortages, high inflation and high unemployment translate into high poverty incidence.

Ironically, these social problems are not caused by lack of money. The savings rate is 20 percent of GDP, or P4 trillion, assuming GDP at P20 trillion. The banking system has P1 trillion of excess deposits that can be parlayed into loans. These pools of money are idle because our one million SMEs are intimidated by the red tape and corruption, especially by the local government units (LGU), the mayors.

Per the last World Bank survey on global Ease of Doing Business (EODB) in 2020, the Philippines ranked last among the ten members of ASEAN in terms of starting a business and getting construction permits.

In the World Bank EODB survey, it takes 13 steps and 33 days to get a business permit. In most LGUs, however, the norm is the longer the processing time, the better and the more financially rewarding it is for people running the LGUs.

In Cavite, try getting an electric meter from your electricity provider. You will be required to produce a building permit by the LGU (the mayor’s office).

To get a building permit, you need to produce 17 permits or clearances. They include: proof of ownership of the house or unit like a land title or lease contract, proof of tax payments on said unit, a location clearance, a zoning clearance, a land use clearance, a structural design, a bill of materials, a geodetic survey, an architectural plan, an engineering plan, an electrical plan, a sewage plan, a fire plan, a seismic survey or an earthquake certification, a DOLE clearance for work safety, an accessibility clearance and a barangay clearance (said to be the most expensive and difficult of all to secure).

Each of these clearances must be signed by licensed professionals, preferably by the engineers at city hall. These permits or clearances must be three to five copies each. In addition, one must provide a construction logbook and three expandable envelops (for cash?). These permits or clearances are for only having an electric meter installed. You haven’t started doing business yet.

In Talisay, Negros Occidental, a businessman texted me complaining of an 18-month processing for a permit for his highland resort. The LGU’s excuse is that the project is on a higher gradient than stipulated. “So the papers go on ping-pong among the City Tourism Dept., DENR, HLURB and DAR. Very typical of government. You have to talk to everybody but you really have nobody to talk to,” the tycoon winces.

In a Batangas LGU, a woman entrepreneur wants to sell her 600-sqm property. She needs a tax clearance from the local BIR. That was 18 months ago. No action.

In 2020, when Ramon Lopez was the Department of Trade and Industry secretary, the Philippines was ranked by the WB 95th globally in ease of doing business, nearly at the bottom of countries surveyed, up from 99th in 2016, a phenomenal improvement of 4 percent.

During the same period, from 2016 to 2020, two of the world’s most corrupt countries, Ukraine and Russia, recorded even more amazing improvements in ranking. Ukraine by 43 percent from 112th to 64th; Russia by 69 percent, from 92nd to 28th (Top 30).

This shows that even the most opaque and corrupt countries can ease things up for businessmen despite the notoriety of their leaders and even while preparing for Europe’s largest land war in 80 years.

Since money talks, may I suggest to President Marcos Jr., a nice guy actually, to offer cash rewards to LGUs ranked by speed of processing permits.

The 2024 budget is P5.768 trillion. A third of that will either be wasted or stolen. Maybe, BBM can allocate P1 trillion as cash rewards to LGUs, in the form of confidential and intelligence funds (CIF). There are 1,500 LGUs, so P1 trillion divided by 1,500 is P666 million per LGU.

This is not an outlandish amount. In Davao under then mayor, now VP Sara, she went to town with P460 million in annual CIF.

Of course, 666 is also the number of the devil. Our mayors can then be devil’s advocates. For business permits in 10 minutes.

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