The Anti-Red Tape Act in the Philippines

Princeton University This analysis is based in part on research conducted by Maya Gainer in November 2014 by Innovations for Succesful Societies. The research was based on interviews conducted in Manila, the Philippines.

Before 2007, citizens of the Philippines had to complete 11 individual governmental procedures and wait for at least 48 days before they were allowed to conduct official commercial activities. As well as causing long delays, this sort of governmental red tape created a severe problem with corruption: citizens who wanted to speed up the process had recourse to bribing government officials. In 2007, the Philippines government adopted the Anti-Red Tape Act to combat corrupt behaviour and improve its frontline public service offering to its citizens.

The challenge

In the 2000s, citizens in the Philippines have faced significant difficulties in receiving prompt and efficient service from government departments and agencies. For example, in order to start a business Filipinos had to complete 11 individual procedures and wait for at least 48 days for governmental approval. This excluded the application for a business permit at the local mayor’s office and waiting for designated print shops to issue receipts, which added even more time. As a result, in its Doing Business 2007 report the World Bank ranked the Philippines 126th out of 175 countries for its "ease of doing business".[1] These long waiting times and complicated bureaucratic procedures were common to all the ministries that provided services to citizens, from supplying business permits to issuing driving licences.

Given these complex procedures, many citizens sought illegal, corrupt ways to speed up the process. Public servants were used to bribes, and they routinely demanded them: “many of the people who used frontline services – and the officials who delivered them – considered bribery and inefficiency routine”.[2] It was common to hire so-called "fixers", who made special arrangements to speed up transactions in exchange for a fee. This, in turn, meant that the government was unable to collect adequate revenue for the provision of its services, while citizens became increasingly disillusioned with the amount of red tape they encountered.

The initiative

In June 2007, the Filipino government tried to tackle this problem through the Anti-Red Tape Act (ARTA). Its overall intention was to increase transparency and promote honesty and responsibility in government service delivery. The Act included simplifying measures to reduce red tape in service transactions, and it established a formal corruption prevention tool for service provision.

ARTA was the first legislation in the Philippines to establish a minimum standard in accessing frontline government services, including at its core a “maximum processing period of five days for simple transactions and ten days for complex transactions. Signatories are also mandated to be limited to a maximum of five.”[3]

In 2008, the government published the Implementing and Regulation Rules (IRR), which clarified and interpreted the law, and the Civil Service Commission (CSC) launched the citizen charter programme as the flagship initiative to implement ARTA. The citizen charter was a document that “communicates, in simple terms, information on the services provided by the government to its citizens. It describes the step-by-step procedure for availing a particular service, and the guaranteed performance level that they may expect for that service.”[4] These documents had to include the amount of fees to be paid, the maximum waiting time, and the officer responsible for each step of the process.

In 2010, the CSC published the first of a number of report card surveys to “obtain feedback on existence and effectiveness of, as well as compliance with the Citizen’s Charter, and how the office or agency is performing insofar as frontline services are concerned”. Based on these surveys, the government issues the “Citizen’s Satisfaction Center Seal of Excellence” to those agencies that have received no ARTA-related complaints and achieved excellent ratings in their report card survey.

The public impact

In the 2017 World Bank ranking for the ‘ease of doing business’, the Philippines was ranked 99th out of 190, a tangible improvement over the intervening decade (see The Challenge above). Although the number of procedures involved in applying for and receiving a business permit had increased from 11 to 16, the waiting time had been reduced from 48 days in 2007 to 28 days in 2017.[5]

For example, the CSC's report card survey measuring compliance and public satisfaction with governmental services showed that even between 2012 and 2013 the offices surveyed had improved their service offering substantially. “Offices which obtained an Excellent rating increased, from 8 percent in 2012 (50 service offices out of 599 surveyed) to 18 percent in 2013 (168 service offices out of 929 surveyed). The percentage of offices that failed decreased, from 25 percent in 2012 (150 service offices out of 599 surveyed) to 7 percent in 2013 (67 service offices out of 929 surveyed).”[6] In 2015, the Excellence rating of offices had increased to 31.7 percent.

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Fair

Filipinos were used to a “red-tape culture" in government services, and it was hard to change these deep-rooted perceptions. “Here, corrupt acts facilitate the daily transactions between citizens and institutions, providing a survival mechanism which serves as a palliative to the myriad inconveniences produced by public bureaucracies.”[15]

The Philippines' "social weather station survey" of December 2007 measured public opinion on "eradicating graft and corruption" after the first six months of ARTA. It found that 55 percent of the population were dissatisfied with the government's anti-corruption measures immediately after the enactment of ARTA.[16] However, by 2010 the public’s support for the anti-corruption strategy had increased, in the wake of the election of Benigno Aquino III (see Political Commitment).

In 2009, the OMB and the CSC ran a campaign against "fixers" and the activity of fixing, “an act that involves undue facilitation of transactions for pecuniary gain or any other advantage”.[17] This campaign called on all government agencies to set up anti-fixer posters in their entrance and distribute "anti-fixer calling cards" to their clients, informing them how to contact the CSC and the OMB in case they were approached by fixers.

However, the CSC struggled to connect with the public and raise awareness of ARTA and its initiatives such as the Citizen's Charter. As such, it was recommended by a study reviewing the implementation of the Charter in 2012 that public awareness needed to be raised.[18]

Stakeholder Engagement Fair

Government agencies and international stakeholders were engaged in the process of discussing the drafting of the ARTA legislation before its enactment. The CSC, together with the Development Academy of the Philippines (DAP), the Office of the Ombudsman (OMB), and the Presidential Anti-Graft Commission (PAGC), conducted a series of consultative meetings with various stakeholders to gather comments and recommendations as well as to discuss possible issues in the implementation of ARTA.[7] International donor organisations, such as USAID, were involved in financing the training of local civil society organisations and CSC staff conducted report card surveys.

However, local and regional stakeholders had little involvement in the actual formulation of the Citizen's Charter in local agencies. There was little customisation, because government service providers often merely copied the minimum national directive instead of creating rules that ensured customer satisfaction. For example, a 2012 evaluation of  the Citizen's Charter in the metropolitan capital of Manila showed little engagement with local stakeholders: “no stakeholder was consulted or involved in the process of developing or refining their respective citizen’s charter” (see also Feasibility below).[8]

Political Commitment Good

In 2009, the former president, Corazon “Cory” Aquino, died. She was seen as an “icon of democracy” by Filipinos, having initiated democratic reforms while serving as president from 1986 to 1992, although her reputation was marred by corruption scandals. Her son, Benigno Aquino III, was encouraged to run for office as president to replace Gloria Macapagal Arroyo, who was eventually arrested on corruption charges.

In 2010, Benigno Aquino III was elected as president of the Philippines, having run on an anti-corruption platform – Tuwid na Daan (Straight Path) – and the fight against corruption gained new political momentum. The 2010 elections have been seen by many observers as among the most influential elections in the Philippines. All in all, 85,000 candidates competed for roughly 17,000 offices, and it was the first time the country had implemented an automated voting system – to prevent voter fraud – instead of counting votes manually.[12]

Benigno Aquino III's anti-corruption and anti-poverty campaign earned him a trust rating of 88 percent of the population and a landslide victory, with 42 percent of the votes. During his inauguration, he vowed – among other things – to tackle “influence peddling, patronage politics, graft and 'wang wang', a colloquial reference to officials' overuse of siren-blaring police escorts to cut through traffic”.[13] Under his new administration, the CSC was able to prepare a social audit of government services, which resulted in a more effective monitoring of compliance with ARTA and helped establish the report card survey.[14]

Policy

Clear Objectives Strong

ARTA's objectives were clearly stated in its opening paragraph: "to improve the efficiency and delivery of government services to the public by reducing bureaucratic red tape, preventing graft and corruption, and providing penalties thereof".[19]

ARTA set out minimum standards for transactions, which allowed for a “maximum processing period of five days for simple transactions and ten days for complex transactions. Signatories are also mandated to be limited to a maximum of five.”[20] It also introduced "service standards to be known as the Citizen's Charter, including forming a task force to prepare said Charter". The implications of the charter were later clarified in the 2008 IRR, which interpreted the law in a more user-friendly way.[21]

Evidence Strong

ARTA was one of the first legislative initiatives to address corruption with reference to good governance standards in the Philippines. The Citizen's Charter and the report card survey were based on evidence from other countries – scorecard report surveys were a common tool in the Asia-Pacific region, for example.

The UK had launched its Citizen's Charter in July 1991 under the government of John Major. It was a mechanism intended to ensure minimum service standards in the public sector. Other countries followed suit, and such charters evolved from being simply a contract between the government and citizens about minimum standards “to an empowerment tool as well as an anti-corruption mechanism”.[22] Throughout the 1990s, countries such as Malaysia, Spain, Portugal, Jamaica, India, Nepal and South Africa launched their own versions of the citizen's charter, which is now widely regarded as best practice within the paradigm of "New Public Management".[23]

The UN Development Programme has benchmarked Asia-Pacific countries’ anti-corruption efforts and found out that corruption surveys, such as ARTA's report card survey, are "most popular and widely used". “Almost all countries in Asia-Pacific have undertaken corruption surveys. National surveys are the norm, whereas local surveys are exceptional, done mostly in large countries like India, Indonesia, and Australia.”[24] In 1994, the CSC had a system in place by which citizens could report poor service or corruption in government agencies. However, this system relied on citizens taking the initiative and acting on their behalf. Hence, the CSC decided that a different approach was required, and had their new survey tested by independent survey research organisations, leading to a first pilot in 2010.[25]

Feasibility Fair

After ARTA took legal effect in 2007, compliance remained in abeyance for over a year because the oversight agencies had to finalise their own regulations governing its implementation. It was not fully implemented until the then president Arroyo issued an administrative order in October 2008, forcing agencies to comply with the law by December 2009. This deadline created time pressure for frontline agencies to align their services with the new law as quickly as possible.

Instead of fostering a stakeholder dialogue on creating their version of the Citizen's Charter, most agencies conformed only to the minimum procedural service standards. In turn, publishing a charter did not immediately translate into compliance with ARTA standards. This put more pressure on the CSC to come up with an effective monitoring mechanism in the form of a report card survey.[25]

The CSC also faced budgetary and resource constraints in setting up the survey as a means of monitoring the Citizen's Charter and the impact of ARTA as a whole. Generally, the CSC lacked the budget to offer financial incentives for compliance. “Instead, the agency had to find ways to coax civil servants to cooperate. Those who benefited from the status quo of side payments and inefficiency could largely block the reform by complying only on paper.”[26] The budget did increase gradually “from PHP21 million (USD473,600) in 2009 to PHP27 million (USD609,000) in 2013 and PHP31.5 million (USD710,000) in 2015”.[27]

Action

Management Fair

It is difficult to assess the different management styles of all the local and national government units in the Philippines that were subject to ARTA and had to implement the Citizen's Charter individually. However, the DAP made an effort in 2009 to streamline all national line agencies, local government units, and state universities and colleges via capacity-building seminars. These were designed to help these agencies formulate and implement the Citizen's Charter and deliver the necessary knowledge and skills.[28]

While frontline agencies are responsible for their own management in the implementation of the Citizen's Charter, the CSC monitors its implementation via the report card survey. To discourage obstructive behaviour from the agencies, “the CSC aimed to win the support of civil servants to help create a new institutional culture of quality public service”.[29]

CSC management wanted to change the attitude of civil servants, but this proved to be a difficult and gradual process. The report card survey relied initially on the support of volunteers from civil society organisations. While it is argued that these volunteers helped produce better results because they were not immediately identified as government officials, and survey respondents therefore felt more at ease with them, this decision was mainly driven by the CSC's limited budget. Only in 2015 did the ARTA team decide to hire full-time paid staff to conduct the surveys, because volunteers “sometimes did not have the time and availability to handle questions and requests for clarifications during data analysis”.[30]

Measurement Strong

In 2010, the CSC implemented a wide-ranging annual report card survey that was intended to use client feedback to measure the success of ARTA and check the thoroughness of its implementation. The survey aimed to provide "a quantitative measure of user perceptions on the quality, efficiency, and adequacy of public services”.[31]

The CSC established a broad scorecard system to “obtain feedback on [the] existence and effectiveness of, as well as compliance with the Citizen’s Charter, and how the office or agency is performing insofar as frontline services are concerned”.[32] All offices and agencies that provided governmental services were subject to these surveys and received a quality rating from their own clients. At the same time, the CSC gained an indication of the public’s satisfaction.

Simultaneously, to measure ARTA’s legal standards according to the Act’s requirements and not just customers' opinions, the CSC conducted random, anonymous inspections. Volunteer clients would pose as citizens and report their experiences back to the CSC, focusing on corruption and service quality indicators “such as courtesy, timeliness, and offices’ physical environments”.[33] Ultimately, 80 percent of the scorecard derived from citizens’ responses and 20 percent from the anonymous inspections. In 2012, this resulted in a rate of compliance with ARTA of 79.16 percent.[34]

Alignment Fair

The CSC and the DAP cooperated in the initial implementation of ARTA. The DAP provided the training and capacity-building to establish the Citizen's Charter for government entities, and the CSC carried out monitoring via the report card survey.[35]

In order to align with the requirements of ARTA, the CSC aimed to change the societal attitudes of citizens and public servants about what constituted good government service. Former CSC director Victoria Esber wanted citizens to be more vocal in demanding transparent and efficient public services. While it is reported that, over the years, responses to the report card survey demonstrated an increasingly demanding attitude on the part of citizens, it seems that the alignment of government actors providing those services was somehow disregarded.[36]