July 15, 2013

Remove Red Tape

Some critics associate low fixed investments (industrial plants and the likes) to top government inactions. Yet, we know that the roots are not at the top; it is at the bottom. Despite the campaign, "Daang Matuwid" (Straight Path), corruption still exist and this is still one of the problems that hinders investment. Index has shown that corruption in our country has decline; yet the decline is minimal signaling that there are still many works to be done.

When local or foreign investors set business in our country, most of the transactions (permits and etc) would need to pass the local government units (LGUs). This is where "red tape" is rampant. In order to speed up the processing of the documents, observably, the investor pays non-documentation related cost.

Corruption in documents processing is one of the reason why investments are not well distributed and maximized in our country; e.g. most of the investments are in Metro Manila even though there are
big potentials in South Luzon and other regions.

The problem of corruption in LGUs has existed for many years. A targeted solution should be implemented relative to this problem. One of the recommended solutions is privatization of documents processing.
Time to time the process can be checked by respected private auditing firms which will ensure the transparency of the new process to the public. The privatization of government documentation will also ensure the safety of the auditors since the environment is less political.

As the economy grows, we need to fix the lope holes to encourage more investments.

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