HOUSE OF REPRESE;

SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES
Busy

No cLed silt

Introduced by Representative VILMA SANTOS-RECTO
6th District of Batangas

AN ACT
PROMOTING THE EASE OF DOING BUSINESS BY MANDATING THE
AUTOMATIC APPROVAL OF BUSINESS PERMIT APPLICATIONS AFTER THIRTY
DAYS OF INACTION AND EXTENDING THE VALIDITY PERIOD THEREOF

Explanatory Note

The Philippines has the 12th largest population and the 43rd largest economy in the
world and coupled with strong GDP growth over the past years, the Philippines is now among
the top 15 preferred investment destinations of multinational enterprises.’ Yet the World Bank in
its 2016 Report on Doing Business ranked the Philippines only in 103 place (out of 185
economies) for Ease of Doing Business. The low ranking not only reflects the possibility of
lower direct foreign investments but it is also seen as a barrier to local Micro, Small and Medium
Enterprise(MSME) growth and development,

It takes 16 procedures to navigate and an average of 29 days to start a business in the
Philippines.’ Compared to our other ASEAN neighbors in the “Ease in Starting a Business”
rankings, the Philippines has performed poorly. The Philippines placed at 165" in the ranking of
189 economies and lags behind Singapore ranked in I“ place, Malaysia in 14" place, Thailand in
96" place, Vietnam in 119" place and Laos in 153" place. *

One of the reasons for this is the difficulty in obtaining business permits and licenses
to set up businesses as well as the short validity period which becomes burdensome for the
business community to be renewing frequently.

The aim of this bill is to increase participation in and promote the growth of business
by providing for the automatic approval and release of business permits upon the lapse of thirty
days of inaction , provided that all necessary documents have been submitted. The validity
period of the said permits should also be valid for a period of one year from the date of issuance
instead of the current practice of setting the expiration at the end of the fiscal year when it was
filed.

Reducing barriers to business formalization can stimulate enterprise growth and
create decent work opportunities.'Obtaining the necessary business permit is an important step
towards formalization. A bigger formal economy would mean a higher tax base thereby
potentially increasing revenues for the government. Formalization translates to higher quality,
better pay and sustainable employment as well as improve access to formal markets and more
productive resources such as capital and land. °



2 ibid

The measure of a transparent government is the ease by which citizens get services
from the government, especially with documents that must be paid for.

In view of the foregoing, approval of this billis earnestly sought-

"Doing Business 2016, World Bank Report
“Regulatory Barriers to MSMEs, Center for Civil Society,2005
S ibid,


Cony annerone

+ Regulatory Barriers to MSMEs, Center for Civil Society, 2005
‘ibid

SEVENTEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES
First Regular Session

HOUSE OF REPRESENTATIVES

H. No. ela

Introduced by Representative VILMA SANTOS-RECTO
6th District of Batangas

AN ACT
PROMOTING THE EASE OF DOING BUSINESS BY MANDATING THE
AUTOMATIC APPROVAL OF BUSINESS PERMIT APPLICATIONS AFTER THIRTY
DAYS OF INACTION AND EXTENDING THE VALIDITY PERIOD THEREOF

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. This Act shall be known as the “Fast Business Permit Act”.

SECTION 2.Declaration of Policy. The State shall promote the improvement of quality
of life by ensuring efficient delivery of public services and providing for policies that expand
productivity andpromote a more equitable distribution of opportunities, income and wealth. The
State recognizes the role of enterprises and foreign investment in the economy as a major agent
of development and as a source of employment and livelihood opportunities.

To this end the State shall provide for measures and policies that remove barriers to
entrepreneurial opportunity and promote ease of doing business.

SECTION 3. Automatic Approval of Business Permit. All applications for business
permit shall be deemed approved after thirty (30) days of inaction from the receipt of such
application by the approving authority:Provided,That all the required documents have been
submitted and fees and charges have been paid.

SECTION 4. Validity of Business Permit.Thevalidity of the Business Permit shall be for
a period of one (1) year from the date of issuance thereof.

SECTION 5.Retroactive Effect. This Act shall be given retroactive effect for all pending
applications in so far as it does not impair or prejudice vested or acquired rights.

SECTION 6. Implementing Rules and Regulations. The Department of Trade and
Industry (DTI) and the Department of Interior and Local Government (DILG) in consultation
with the Union of Local Authorities of the Philippines (ULAP) shall issue the implementing
rules and regulations for the proper implementation of this Act.


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SECTION 7. Separability Clause. If any provision or part of this Act is held invalid, the
other provisions not affected thereby shall continue in operation.

SECTION 8. Repealing Clause. All laws, presidential decrees, executive orders and
issuances inconsistent with this Act are hereby amended, modified or repealed accordingly.

SECTION 9. Effectivity Clause. This Act shall take effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation or in the Official Gazette.

Approved,