OMBUDSMAN PUBLIC GOVERNANCE FORUM

Issues, Challenges, and Resolutions in Fighting Corruption GUILLERMO M. LUZ Private Sector Co-Chairman August 30, 2013

I. Simplification and Streamlining of Procedures

• Ease of Doing Business

• Business Permits and Licensing System

II. Monitoring and Evaluation

• BPLS Customer Satisfaction Surveys

• Annual Enterprise Survey on Corruption

III. Budget Transparency

IV. Pork Barrel

Outline

• Ease of Doing Business – Measured by the International Finance Corporation in its

Ease of Doing Business Report

2013 Rank 2012 Rank Change ASEAN Next Report

138/185 136/183 NONE 8 of 9 Oct-13

Goal: Move the country to the TOP THIRD of

the world ranking by 2016

I. Simplification and Streamlining of Procedures

World Rankings of ASEAN Countries

COUNTRIES 2013 (185

economies)

2012 (183

economies)

2011 (183

economies)

2010 (183

economies)

2009 (181

economies)

SINGAPORE 1 1 1 1 1

MALAYSIA 12 14 23 23 20

THAILAND 18 17 16 12 13

BRUNEI DARUSSALAM 79 83 86 96 88

VIETNAM 99 99 90 93 92

INDONESIA 128 130 126 122 129

CAMBODIA 133 141 138 145 135

PHILIPPINES 138 136 134 144 140 LAOS 163 166 163 167 ------

2013 World Rankings of ASEAN Countries by Indicator

Country

Starting a

Business

Dealing w/

Construction

Permits

Getting

Electricity

Registering

Property

Getting

Credit

Protecting

Investors

Paying

Taxes

Trading

Across

Borders

Enforcing

Contracts

Resolving

Insolvency

Singapore 1 4 2 5 36 12 2 5 1 12 2

Malaysia 12 54 96 28 33 1 4 15 11 33 49

Thailand 18 85 16 10 26 70 13 96 20 23 58

Brunei 79 135 43 29 115 129 117 22 40 158 46

Vietnam 99 108 28 155 48 40 169 138 74 44 149

Indonesia 128 166 75 147 98 129 49 131 37 144 148

Cambodia 133 175 149 132 115 53 82 66 118 142 152

Philippines 138 161 100 57 122 129 128 143 53 111 165

Laos 163 81 87 138 74 167 184 126 160 114 185

• Created Ease of Doing Business Task Force by virtue of Administrative Order No. 38

– With work teams based on the 10 indicators

– Composed of government agencies and private sector partners

• Designed and implemented reform targets by benchmarking against ASEAN countries

Gameplan for Competitiveness

Number of Days, 2012-13

36

Number of Steps, 2012-13

16

Starting a Business

Number of Days, 2013-14

11

Number of Steps, 2013-14

11

Starting a Business

START Deposit paid-up capital and

obtain bank certificate.

Notarize articles of incorporation and treasurer's

affidavit.

Verify and reserve company name

with SEC.

Register the company with SEC and receive pre-registered TIN.

Obtain barangay clearance.

Pay annual community tax and obtain community

tax certificate.

Obtain business

permit from BPLO.

Apply and pay for Certificate of Registration and

obtain TIN at BIR.

Pay registration fee and

documentary stamp taxes

Obtain authority to print receipts

and invoices from BIR.

Buy special books of

account at bookstore.

Have books of accounts and Printer's Certificate of Delivery stamped by

BIR.

END Register with SSS.

Register with

PhilHealth.

Register with Pag-IBIG.

Print receipts

and invoices.

Starting a Business

START Deposit paid-up capital and

obtain bank certificate.

Notarize articles of incorporation and treasurer's

affidavit.

Verify and reserve company name

with SEC.

Register the company with SEC and receive pre-registered TIN.

Obtain barangay clearance.

Pay annual community tax and obtain community

tax certificate.

Obtain business

permit from BPLO.

Apply and pay for Certificate of Registration and

obtain TIN at BIR.

Pay registration fee and

documentary stamp taxes

Obtain authority to print receipts

and invoices from BIR.

Buy special books of

account at bookstore.

Have books of accounts and Printer's Certificate of Delivery stamped by

BIR.

Register with SSS.

Register with

PhilHealth.

Register with Pag-IBIG.

END Register with

SSS, PhilHealth,

and Pag-IBIG.

Print receipts

and invoices.

Pay annual tax and obtain community tax certificate and business permit.

Buy special books of account and have books of accounts and Printer's

Certificate of Delivery stamped by BIR.

Starting a Business

START Notarize articles of incorporation and treasurer's

affidavit.

Verify and reserve company name

with SEC.

Register the company with SEC and receive pre-registered TIN.

Obtain barangay clearance.

END

Register with SSS,

PhilHealth, and Pag-IBIG.

Pay annual tax and obtain community tax certificate and business permit.

Apply and pay for Certificate of Registration and

obtain TIN at BIR.

Pay registration fee and

documentary stamp taxes

Obtain authority to print receipts

and invoices from BIR.

Print receipts

and invoices.

Buy special books of account and have books of accounts and Printer's

Certificate of Delivery stamped by BIR.

Starting a Business

Number of Days, 2012-13

84

Number of Steps, 2012-13

29

Dealing with Construction Permits

Number of Days, 2013-14

61

Number of Steps, 2013-14

17

Dealing with Construction Permits

Number of Days, 2012-13

50

Number of Steps, 2012-13

5

Getting Electricity

Number of Days, 2013-14

36

Number of Steps, 2013-14

4

Getting Electricity

Number of Days, 2012-13

39

Registering Property

Number of Days, 2013-14

23

Registering Property

Number of Payments, 2012-13

47

Paying Taxes

Number of Payments, 2013-14

14

Paying Taxes

• Business Permits and Licensing System

BPLS Streamlining Project – Simplify issuance of Mayor’s permits

• < 5 steps

• < 5 days

• 1 form

• 2 signatures

– As of March 2013, 926 LGUs have streamlined their BPLS.

– All 1,634 LGUs nationwide are targeted to be streamlined by 2016.

I. Simplification and Streamlining of Procedures

II. Monitoring and Evaluation

• BPLS Customer Satisfaction Surveys

– Conducted every January-February to validate the reforms reported by the LGUs

– Assess the experience of businessmen in applying for permits in cities and municipalities

• 2012 BPLS Customer Satisfaction Survey – Out of more than 800 respondents, 63% reported

that they were satisfied with the BPLS in their respective LGUs.

1%

3% 4%

23%

63%

6% Extremely Dissatisfied

Dissatisfied

Somewhat Dissatisfied

Somewhat Satisfied

Satisfied

Extremely Satisfied

II. Monitoring and Evaluation

SATISFACTION SCORES OF ALL RESPONDENTS, 2013, N = 1,715

INDICATORS SCORE out of 10

Overall satisfaction 8.03

Expectations of the overall quality of the renewal process 8.40

Services of the LGUs considering all expectations 8.95

Speed of the renewal process 8.86

Number of steps involved 6.72

Number of signatures affixed to the business permit 7.02

Number of forms issued by the LGU to facilitate the renewal process 7.51

Delivery of the services of the BPLO frontliners 8.58

Cost of fees paid to renew business permit 7.42

Overall quality of the renewal process this year 9.32

Overall quality of the renewal process last year 8.67

Source: BPLS Customer Satisfaction Survey 2013

II. Monitoring and Evaluation

LGU Score Region Province Classification

Abulug 9.86 II Cagayan Municipality

Kapatagan 9.84 X Lanao del Norte Municipality

Sipocot 9.59 V Camarines Sur Municipality

Palauig 9.51 III Zambales Municipality

Claveria 9.49 II Cagayan Municipality

Sta Cruz 9.45 III Zambales Municipality

Iba 9.29 III Zambales Municipality

Subic 9.21 III Zambales Municipality

Sanchez Mira 9.19 II Cagayan Municipality

Naga 9.11 VII Cebu City

Hinatuan 9.08 XIII Surigao del Sur Municipality

Ragay 8.91 V Camarines Sur Municipality

Solana 8.79 II Cagayan Municipality

Batangas 8.74 IV-A Batangas City

Bambang 8.74 II Nueva Vizcaya Municipality

TOP

-RA

NK

ING

LG

US

(1-1

5)

Source: BPLS Customer Satisfaction Survey 2013

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption

– Conducted July-October 2012

– 10th run since 2000

– Largest sample and area coverage so far with 972 businessmen from NCR, Metro Angeles, Calamba/Laguna/Batangas, Metro Iloilo, Metro Cebu, Metro Davao, and CDO-Iligan

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption

– 20 government agencies covered

City/Municipal Government

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption – 43% see “a lot” of corruption in the public sector – lowest

since 2000.

– 41% say “most/almost all” in their sector give bribes to win public sector contracts – lowest since 2000.

– 33% know of corruption in their sector in the last 3 months – lowest since 2006.

– 73% see less corruption now; only 3% see more corruption now, compared to the previous administration.

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption – Ratings of sincerity in fighting corruption have improved for

17 of 20 institutions.

– Those that did not were City Government, Supreme Court, and COMELEC.

– Top 4 agencies

• Office of the President (Excellent)

• DOH, DTI, and DepEd (Very Good)

II. Monitoring and Evaluation

+10

-15

-3

-27

-37

+80 2005 2006 2007 2008 2009 2012

Office of the

President

+10

+30

+50

+70

-10

-30

Qs 9-28. PLEASE EVALUATE THE FOLLOWING INSTITUTIONS IN TERMS OF SINCERITY IN FIGHTING OR PREVENTING PUBLIC SECTOR

CORRUPTION IN THE PHILIPPINES. [Very sincere; Somewhat sincere; Undecided if sincere or not; Somewhat insincere; Very insincere]

* % VERY/SOMEWHAT Sincere MINUS % SOMEWHAT/VERY INSINCERE, correctly rounded.

EXCELLENT SINCERITY RATINGS IN 2012

II. Monitoring and Evaluation

VERY GOOD SINCERITY RATINGS IN 2012 2005 2006 2007 2008 2009 2012

Dept. of Health Dept. of Trade

and Industry

+10

+30

+50

+70

-10

Dept. of

Education

+40

+11

+26

+3

+32

+54

+10

+30

+42

+7

+37 +38

0

+61 +59

+51

Qs 9-28. PLEASE EVALUATE THE FOLLOWING INSTITUTIONS IN TERMS OF SINCERITY IN FIGHTING OR PREVENTING PUBLIC SECTOR

CORRUPTION IN THE PHILIPPINES. [Very sincere; Somewhat sincere; Undecided if sincere or not; Somewhat insincere; Very insincere]

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption – Majorities see corruption cases in court going fairly, but too

slowly.

– 50% were solicited for a bribe, versus 60% in the 2009 survey; but reporting of solicitation to authorities remains very low.

II. Monitoring and Evaluation

• 2012 Annual Enterprise Survey on Corruption – Corruption is less in the private sector than in the public

sector, but is also serious, and has not improved.

– Although companies say success in fighting corruption will make them more profitable, they are not helping much to pay the bill.

– The extent of honest business practices is unsatisfactory and not improving.

– Business prospects have never been better; executives give much credit to the National Government for this.

II. Monitoring and Evaluation

III. Budget Transparency

Electronic Transparency Accountability Initiatives for Lump Sum Appropriations System (e-TAILS)

http://www.dbm.gov.ph/

http://pdaf.dbm.gov.ph/

III. Budget Transparency

http://pdaf.dbm.gov.ph/

III. Budget Transparency

http://budgetngbayan.com/

III. Budget Transparency

IV. Pork Barrel: Reverse Money Laundering

What should be done?

• Freeze accounts, audit, obtain bank records (including NGOs involved)

• Investigate & Prosecute

• Channel energy against PDAF to vigilance and monitoring of entire budget, including LGU budget

• Tighten rules for accountability and install more transparency measures for all public spending

/Compete.Philippines @ncc_PH admin@competitive.org.ph