Ease of Doing Business: Philippines’ Anti-Red Tape Challenge) (PH0045)

What is the public problem that the commitment will address?: Multiple laws, rules and regulations that hampers ease of doing business in the Philippines. The country’s challenge of Project Repeal aims to identify and respond to different types of red tapes such as rules and regulations that are designed to but do not achieve a certain policy goal, inefficient procedures and systems that are related to administrative management, and inefficiencies in the communication and information exchange within and between organizations and external stakeholders.; What is the commitment?: The concept of Project Repeal was first introduced by the National Competitiveness Council (NCC), in line with its advocacy to ease of doing business in the Philippines. Through Public – Private collaboration, NCC seeks to repeal or amend outdated laws and/or issuances which impede the country’s competitiveness. The project was patterned after similar initiatives to countries like Australia (Cut Red Tape Initiative), United Kingdom (Red TapeChallenge), South Korea (Regulatory Guillotine), and in ASEAN, Vietnam’s Project 30 which are all focused on reducing the cost of compliance for businesses and entrepreneurs and the cost of administration and enforcement for the government. For its initial stage, NCC will be reviewing Department Orders (DOs) issued by Cabinet Departments and attached agencies. The project will be expanded to eventually cover Executive Orders (EOs), Administrative Orders (AOs), Republic Acts (RAs), and local ordinances and executive orders. The Project Repeal can serve as the interim Integrative Framework for Whole-of- Government Regulatory Improvement.; How will the commitment contribute to solve the public problem?: Since the First Repeal Day last June 13, 2016, the team successfully identified outdated rules and regulations which are no longer necessary for the economy. Over 80 agencies and attached agencies have signed on and submitted almost 35,000 rules and regulations for review/repeal. With this, the NCC believes that government’s commitment to cut red tape and reduce bureaucratic process will further improve our country’s global competitiveness rankings. In effect, making doing business easier and accessible to foreign and local investors and promote better delivery of public services. Specifically, the commitment aims: • To lower cost of compliance for business and cost of enforcement for government by repealing/amending unnecessary, costly, burdensome, out-of- date, confusing rules; • To institutionalize an evidence-based repeal system towards coherent and ultimately for better regulations; • To democratize regulatory reforms process through public participation.; Why is this commitment relevant to OGP values?: Civic Participation – Under Project Repeal, a series of dialogues and meetings with the public and partner agencies will be conducted. With this, agencies were able to identify outdated rules and regulations of their respective offices to undergo in the framework of repeal system. The team also managed to launch Repeal Day on June 13 and December 08, respectively. This highlights the agencies commitments to further improve their respective processes by repealing burdensome rules and regulations that hamper doing business.; Additional information: This is in line with Chapter 5 of the Philippine Development Plan 2017-2022 on Ensuring PeopleCentered, Clean, and Efficient Governance; and consistent with the strategies identified in Chapter 15 of the same Plan on The National Competition Policy.

2B. Improve ease of doing business

Commitment text from action plan:

“The concept of Project Repeal was first introduced by the National Competitiveness Council (NCC), in line with its advocacy to ease of doing business in the Philippines. Through Public – Private collaboration, NCC seeks to repeal or amend outdated laws and/or issuances which impede the country’s competitiveness.

The project was patterned after similar initiatives to countries like Australia (Cut Red Tape Initiative), United Kingdom (Red TapeChallenge), South Korea (Regulatory Guillotine), and in ASEAN, Vietnam’s Project 30 which are all focused on reducing the cost of compliance for businesses and entrepreneurs and the cost of administration and enforcement for the government.

For its initial stage, NCC will be reviewing Department Orders (DOs) issued by Cabinet Departments and attached agencies. The project will be expanded to eventually cover Executive Orders (EOs), Administrative Orders (AOs), Republic Acts (RAs), and local ordinances and executive orders.

The Project Repeal can serve as the interim Integrative Framework for Whole-of-Government Regulatory Improvement.”

Milestones

1. "Finalized Standard Cost Model (SCM)
2. 300 regulations/issuances repealed, amended, consolidated or delisted
3. Capacity Building Program in Standard Cost Model (SCM) conducted for 80 partner agencies/institutions
4. 3 public dialogues on policies/regulations under review involving the identified CSOs/private sector organizations"

Editorial Note: For the complete text of this commitment, please see Philippines’ action plan at https://www.opengovpartnership.org/wp-content/uploads/2018/06/Philippines_-Action-Plan_2017-2019_updated.pdf

Context and Objectives (Commitment Design)

Similar to commitment 2A, the goal of commitment 2B was to improve the country’s competitiveness. Cultivating a culture of excellence in public service and improved public-private sector collaboration was considered a strategy to propel growth and economic development in the long run through increased private sector investment and business activities. ^[27]

The commitment sought to implement Project Repeal, launched in 2016, which aims to address causes and instances of red tape, that is, cut ineffective and unnecessary rules and regulations and administrative processes and improve communication and information among internal and external stakeholders. Project Repeal ultimately aims to lower the cost of business transactions with frontline services and make the “repeal system” (referring to the system of removing and streamlining processes and rules) more evidence based and participatory. While most of the commitment’s activities pertained to internal government-facing activities, the commitment did aim to leverage the OGP value of civic participation to conduct multisectoral dialogues on policies under review.  

The indicators were specific enough to be verified. They included a cost model; number of regulations and issuances repealed, amended, consolidated, or delisted; number of partners served by a capacity-building program; and number of public dialogues on specific reforms with pre-identified civil society and private sector stakeholders.

If fully implemented as written, this commitment was expected to have minor potential impact. From 2017 to 2019, under Project Repeal, the commitment aimed to repeal, amend, consolidate, or delist 300 issuances according to an evidence-based and participatory “repeal system.” This could potentially have improved some frontline agencies’ ability to provide cost-efficient and responsive services, although the commitment described Project Repeal as an “interim” measure on government regulatory reform. In terms of scope, the commitment’s target number of 300 issuances was modest, considering that in 2016, Project Repeal repealed, amended, consolidated, and delisted 4,609 issuances. ^[28] Meanwhile, the intended scale of public participation was limited to three public events.

Commitment Implementation

This commitment’s implementation was limited, as only milestone 2 was fully implemented. Under this milestone, rather than 300 issuances, 1,023 issuances were repealed, amended, consolidated, or delisted over two rounds of repeal in 2017 and 2018 – exceeding the action plan’s target by threefold. ^[29] However, milestone 4, which made this commitment relevant to OGP values, was partially implemented. Two of the three planned public dialogues were conducted in 2018 and 2019 with private sector representatives about the repeal process.

Milestones 1 and 3 were not implemented, with the standardized cost model incomplete by the end of the implementation period. However, the development process commenced with two workshops in 2017 and private sector stakeholder consultations. This commitment incorporated technical support by stakeholders such as the Civil Service Commission (CSC), the Philippine Institute for Development Studies (PIDS), and the Embassy of the United Kingdom in the country and with political buy-in by government and state agencies. ^[30] In 2018, the government passed the Ease of Doing Business and Efficient Government Service Delivery Act. This Act created the Anti-Red Tape Authority, which took over Project Repeal. ^[31]

The commitment opened government marginally. The commitment’s main components relating to civic participation (the creation of multistakeholder platforms to inform the repeal process) was partially achieved through two events. First, one focus group with representatives of the private sector on 16 May 2018 helped the government “to review the modality that the project is using in assessing laws and government agency regulations and to collect recommendations on how to better implement and monitor the repeal process.” In another event with the private sector on 24 April 2019, “the laws submitted for repeal and amendment during the Fourth Repeal Day were presented to the private sector for their additional comments and recommendations.” ^[32]

The government has provided written records of both events. The May 2018 event, presented as a focus group, included four representatives from the private sector and academia. ^[33] Discussions focused on how to improve the Project Repeal process and which areas/sectors should be given priority, among other issues. ^[34] The April 2019 event included 10 representatives from different private sector organizations ^[35] who raised concerns around time-consuming procedures. Government representatives provided specific responses to each of these comments and concerns.

Although the organization of these specific events is indicative of positive change in government practices regarding the inclusion of citizens in red tape reduction, the changes to government practice remain marginal. First, these one-off events were mainly consultations on the current procedures of “Project Repeal” and were not specifically aimed at repealing norms with the private sector. Second, the list of participants at these events confirm that firms and private sector representatives involved represented large organizations and that there was no identifiable participation of medium or small enterprises. In addition, there is no evidence of how the government ultimately used input from the private sector to inform implementation of the other milestones.

Next steps

The IRM shared the following recommendations with stakeholders during the prepublication review period for the design section of this report. They are included below for public record. ^[36]

To increase ambition of a future commitment in this policy area, the IRM recommends designing a commitment that focuses on the participatory elements of both commitments 2A and 2B, in addition to elements of disclosure and transparency. It would be helpful for a future commitment to address specific dimensions of the Ease of Doing Business indicators that benefit directly from increased transparency and participation.