Filipino Stupidity That Will Take Your Breath Away

So I’ve been running a business in the Philippines for a few years now and have run into plenty of really stupid practices and procedures but if you want to see stupidity taken to new levels try dealing with the bureaucracy.

My factory is in a PEZA zone so every thing coming in and going out has to go through Customs.  Fairly simple really, bring in permits and bring out permits, and they used to take an hour or two to get.   Now the permits are generally generated at a PEZA Trade Facilitation Department (TFD), not Customs, then you take the permit with you when you bring materials in to the zone.  The old procedure was fill out the form on your computer, print four copies, head down to the zone offices and file the permit.  An hour later they would call your name and give you the permit.

Then one day last year a new sign appeared stating that after a certain date the manual permits would not be permitted and all permits had to go through their online system.  Cool… instant approval they said or five minute approval.  Sign me up!

Good luck with that.  Took about a month of badgering the TFD to find out what was needed to apply for the service.  Filed the application, five weeks later no movement on the process and staff is being told that no more manual permits can be filed.   So work comes to a standstill as raw materials run out, no wire, no tubing, no supplies, nada, zilch, not a freaking thing can get in.  Finally a letter to the marketing department generates a forward to the attorney running the TFD and low and behold, a user name and password appear in the email.   One that doesn’t work…

Fast forward a week later and dozens of emails to the cretins  running the show and we have a password and user name that works.   But you can’t file a permit because “your account balance is too low to process permits”.   Look up the cost of the permits, zero.   Another few days sorting out that mess and we have a functioning system to file permits at last.

One, two, three permits get filed.   Not a great website by any means.   No running total on the imputed amounts so you learn to run a tape on invoices to catch math errors or crappy handwriting on the invoice.  Can’t modify a permit if you make a mistake either.  But it works and raw materials are flowing in once again.

Then boom.. three permits rejected one after another.  Reason?  Well they don’t tell you that, just that the permit was rejected.  So you try something different, change the file name on the invoice scan or photo you file online.   Double check all the check boxes, double check the amounts.  Nope, nothing getting through.   Staff is now twiddling their thumbs with no work to do as they have no raw materials to work with once again.

So staff goes down to the TFD, tries to file a manual permit which is rejected.  Emails fly back and forth between cretins until you find out why the permits were being rejected.  No building permit.  Let me say that again, no building permit on file.

WTF!!!!   We are manufacturing products, not building a new building or remodeling an existing building.   Go back through all the rejected permits…  all say for manufacturing or assembly, none are checked for consumption and guess what, there is no check box for building materials other than one for production equipment which could be construed as perhaps working on the assembly line or shelving or something.

Staff goes back down armed with a reason and are told that manufacturing or building a product requires a building permit on file and staff is directed to the permit office to apply for a building permit.

Staff arrives at said permit office, finds an intelligent Filipino engineer in charge who laughs and says, no, a building permit is not required.   Staff goes back to TFD and is told yes, a building permit is required if we want to bring in raw materials because we are after all building products.   Nice intelligent Filipino engineer is decent enough to travel over and explain to the TFD that no, a building permit is not required and will not be issued for manufacturing a product.  Permits magically begin being approved once again and we get to restart production.

And the process when things are working well goes like this.    Go purchase the raw materials in Manila, pay and get the BIR official receipt.  Drive back to the PEZA zone to file the permit as you need a scan of the BIR OR to file with the permit online.   Wait till it is approved, ten minutes unless some idiot makes a decision on his or her own.  Print out four copies, drive back to the supplier in Manila and load the materials to go through Customs at the edge of the PEZA zone.  Pay a few hundred pesos to park besides the Customs inspection building at a private parking lot set up for incoming and outgoing shipments, pay about half of that for the fee, if you are unlucky “that” guy is working and asks staff for an additional “fee” of 100 pesos and no he isn’t giving out receipts if you now what I mean.    Back up to the Customs inspection dock and they eyeball your cargo and away you go with your load after everything is stamped and filed.

And no, you can’t use an electronic copy of the BIR OR, it has to be a paid BIR original receipt, the receipt for the order.  Strangely enough a pro forma invoice willl work when something is coming in from outside the country but they will not accept purchase orders or unpaid receipts on local purchased materials.

Now is it just me or is the fact that if the materials are bought locally and already have the VAT and duty paid not germane to thinking that perhaps, just maybe, we don’t need to worry about stuff coming into the zone and should concentrate stuff leaving the zone in case the VAT and duty hasn’t been paid?

And to make things really interesting you can input all the data, triple check everything before submitting a permit, only to find out that it took a number like 280 pesos and turned it into 28,013 pesos on the final form.  Or it changes the self generated reference number for you.   I’ve seen this happen right before my eyes as a staff member is submitting a permit on the remote laptop.  So even when it “works” the system is so bug ridden as to be a total crap shoot to use.

So nothing can be taken for granted in the Philippines when you are running a business there.    Roadblocks will appear and the second you decide it is an attempt to obtain bribes you learn that sheer mind numbing stupidity just might be behind the problem

Published in Bureaucracy, Filipino Stupidity


  1. Profile gravatar of Captain PFB
    Captain PFB

    The Filipinos incapacity to communicate via any means whatsoever is incomprehensible. You can give all needed information, and they’ll ask you for it again. What is the point of giving it once, if you’re not going to absorb it the first time? Their capacity to completely fuck up the information you give them is astounding.

    Why bother to give information if it does no good whatsoever to give it? Their inability to use logic and reason blows the mind.

  2. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    Agree, simply astounding. Many of them simply don’t have the processing power to absorb more than one bit of info at a time.

    It was suggested that I have procedure manuals written as part of the training but anything over a few sentences won’t be followed much less even read. I’ve learned to feed them instructions one sentence at a time, wait for that to be accomplished, then on to the next part. Drawings? Forget drawings or even pictures. No comprehension of what an elevation is or an overhead view. Now sometimes a 3D drawing will punch through the mental fog if you work with them for a while.

    But damn, once you have them trained and doing something right they never get bored. The major fight is keeping them wearing the required shoes and not flip flops.

  3. Profile gravatar of Captain PFB
    Captain PFB

    And they just cannot, or refuse to follow rules. I swear to fuck they all believe individually that they are exempt from any rules or laws, yet watch how they point their finger at the other guy breaking the rule they just broke. And they are clueless to their hypocrisy. It’s so mind-boggling that my brain wants to vapor lock. In observing them going about their daily lives, they are completely ignorant of any common rules of courtesy, consideration, and order. Yes, they are THAT narcissistic.

  4. Profile gravatar of Captain PFB
    Captain PFB

    A couple weeks ago, I had the taxi driver from hell. This utterly out-of-control, complete fucking idiot was driving so insanely, driving like everyone on the road should not fucking be there because he owns it, and can do whatever the fuck he pleases. He broke every fucking safety and traffic rule imaginable in minutes. Then when some motorcyclists merely looked at him when we were stopped at a red light, he rolls down his window and starts yelling at them. ALL THEY DID WAS LOOK AT HIM!!! He’s yelling at them as if they have violated his supreme right to be a complete dumbfuck.

    And it didn’t matter one bit that he had a member of the public who has hired him in his taxi. Not one single shred of professionalism did he display. And he didn’t give a fuck either. It was like that is how it’s supposed to be.

  5. Profile gravatar of loco_loco

    Oh man you ve said it….we have a business too here and i can tell you the same nuts stories with their customs and fuckin permits…i dont want to say that they wantto grab more money from their never ending asking of permits….no this not all want…they are simply fucking stupid..example..need a building permit to built products…

  6. Profile gravatar of Johnny

    The insane thing is you’re in the peza. I thought that’s supposed to be the most business friendly environment in the Philippines with shipments.
    I had my business hidden for a few years. My partner took over now, but we finally got to a point we can’t hide anymore. The paperwork gets filed next month and we go “official”. I have my fingers crossed things will go well.
    The Chinese business owners know who and when to pay. They seem to have the system down and maybe that’s why flip officials always have their hands out.

    1. Profile gravatar of Idiotocracy
      Idiotocracy Post author

      Nope, PEZA makes everything far more complex. The people running them have good intentions but their much vaunted one stop office is a joke, nothing can be done without going outside and dealing with the regional offices. BIR, SEC, SSS, Philhealth, Pag iBig, none of it gets done inside the zone.
      An example, two years ago we did the Philexport export registration. Fairly quick, Philexport workers very capable and helpful. Might have taken a few months once we started. Inside the PEZA zone it took from August till December. DOLE never messed with us outside the zone but inside they will “help” you and waste several days of your time creating employee handbooks, setting up safety committees, filing stupid and useless reports. We are still under ten employees so they aren’t even supposed to mess with us. Then once you are over ten they can harass the crap out of you until you hit two hundred workers and then magically you become “self reporting” and DOLE leaves you pretty much alone I am told.

      Your costs for government regulation will increase by about ten times once you go into a PEZA zone so make sure you actually need to import products or supplies, no other reason past that as far as I am concerned. A bit safer from the low level thugs and scamming neighbors but the predators are the government officials at Customs and other agencies. Electric companies will rape you, we are paying about four times what we paid on the outside because of demand charges. I think we were less than a few hundred kilowatt hours last month, far less than someone using an aircon, but they hit us with a 5 K demand charge every month.

      All that said, once you get through all the crap and an import from China you can cut your cost of materials in half if you can afford to invest in container loads. Hopefully by the time we get all the import permitting done the economy will still be good and it will all be worth it.

      Yes, the Chinese have it down. Our first accountant gave us the option and approximate costs for going the legal way or paying bribes. Cheaper to pay bribes but the guy said the wild card was if one of the agency heads got greedy over time. But basically four to five hundred pesos per month would allow you to work labor at the local rates, 240 pesos for laborers, sales clerks, no worries about DOLE accepting a complaint for labor violations. I chose the legal way, sleep better at night and even with all the wasted dollars and wasted time having labor that is ten to fifteen times cheaper than here in the U.S. makes it possible to do well.

      1. Profile gravatar of Johnny

        Wow! I completely misunderstood the whole PEZA thing. It sounds easier to just deal with a cargo forwarder who can get these things done even though it may cost more. I would gladly spend 5K just to avoid dealing with those greedy morons. If there was actually zero government in the Philippines, I think things would move better. It seems like they exist only to make things more expensive and retarded. I mean, do they ever help?
        My friends (chinese guys) who own retail stores deal only with the distributors or the cargo forwarders from what I know. They wont deal with the customs dept at all. However, if you are importing raw materials, then its probably much more complicated. I do know if you’re importing raw materials, you are allowed some exemptions as an incentive for factory and production work.
        Also, the chinese pretty much have some DOLE reps on retainer to make any issues go away. That was always my worry if some agency got greedy. Seeing a foreigner and shaking him down for money is a filipinos wet-dream. I’m glad I didn’t have to deal with the same issues as you.

        1. Profile gravatar of Idiotocracy
          Idiotocracy Post author

          Oh yeah, it sounded so nice in the PEZA brochure. But here it is 11 months from when we started and we still don’t have our import permit completed. I would guess there are around 300 separate documents or requirements by the time you are registered with Customs, TFD of the PEZA zone, and through the BIR importer certification gauntlet. One of the final processes is to get the BIR departments to sign off on everything, seven or eight of them. A few years ago it was the BIR’s job to get those department sign offs but hey, better to face the bureaucrat so he can ask for a bribe I guess is their thinking. The new legislation mentioned that it was taking too long when the BIR was responsible for getting the department heads to sign off.

          I suspect your Chinese friends understand the system far better than I did when all this started.

  7. Profile gravatar of Warlord

    That sounds like a super bad system. Seems like super rush to me. And feels like the programmer(s) extorted money on the aholes by making deliberate errors on the system (We are actually being taught by our current teacher to do just that, so we gain profit, like hell I’ll do that) so I would say wait for a couple of months until the system reach the “peak” in which it is safe to use. All those errors and delay is a very bad thing, seriously, you might be accidentally charged of money or something.

    And I don’t know fully well how owning a business actually work, but aren’t asking too much permit actually seems like extorting money? Or is it just me?

    1. Profile gravatar of Idiotocracy
      Idiotocracy Post author

      That is the legal definition of extortion in many states, government officials demanding payment for services. In this case it appears to be just ineptitude and carelessness on the part of the TFD.

      I think the system is designed to allow companies to grow to a certain point and no larger as to make the jump from then workers to 200 so the DOLE isn’t screwing you over is a huge step. The big boys don’t want little companies getting large and bringing competition. Little competition keeps prices high and wages low for the big boys.

  8. Profile gravatar of loco_loco

    2RvE1, this is a super bad system… imagine all the guys who have a business not in Manila ?? then ur fucked…u can close the doors in the while the monkeys in Manila create you papers for nothing. Its a system where no logic is allowed !! like many *systems here..

  9. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    There is an article written in the 80’s I believe called Bootleggers and Baptists that explains why things are like this. One thinks that it is insane and completely screwed up but in fact it is a well oiled machine designed to keep wages down, the rich from facing new competition, and to maximize bribes or the hiring of lawyers, consultants, and accountants.