Now don’t get me wrong, you can make good money in the Philippines exporting manufactured goods because the labor is dirt cheap here and while the payroll taxes are about the same percentage as in the U.S. you are paying those taxes on a buck an hour. But the cost of labor is going to be one lf the smaller budget items, the cost of bureaucracy is going to be your second largest budget item behind building rent.
The paperwork is endless and maddening. To get anything done takes four or five trips to the fiefdom of the little lord that controls access to what you need. And they are going to try to shake you down along the way. Here is one example.
So you are smart after a couple of years experience doing business here; let the dongs do it. Hire you a college grad for a buck an hour or a part time accountant for about $4.00 per hour and let them file the applications and permits. After all, they know the drill and have contacts to smooth the way. BIR, Pag iBig, Philhealth, and SSS are the payroll accounts you need set up. Mr. Dong contracts for a couple hundred bucks to do all four, takes a couple of days to do three of them with a day or to preparation. Ahh, but that forth one, the SSS completely blows up even on Mr. Dong of long experience and contacts.
End of the week, three accounts are set up but the SSS starts throwing road blocks up. Well siiiiirrrrrr, your certified true copy of your SEC registration has some smudges on it, might have been altered. And you are thinking: “This smuck thinks someone is going to set up a tax liability account and pay taxes under a fraudulent name!” Why would anyone do that?
Okay, Mr. Dong reports back and is told to go back and make sure all the other paperwork is in order before taking the two hour bus trip to the nearest SEC regional office. Yep, all in order, off he goes to get the magic paper without smudges. Of course the new set, duly stamped with colored ink from the SEC has the same smudges, it is freaking Xerox of the original that has smudges from when they used a typewriter at the SEC to fill it out. Matter of fact it is identical to the original that was also duly stamped along with the OR, Original Receipt, where you paid for the copy.
Got the retard corralled now! Magic paper in tow Mr. Dong heads back down to the SSS and comes back…empty handed. Now the articles of incorporation have smudges and ANOTHER certified true copy with colored stamps on all pages is needed from the SEC two hours away.
Four trips, four freaking trips later and Mr. Dong is told that now the PEZA registration, duly certified original with more colorful stamps is defective and that the choice of registered agent is unacceptable. Uh, this is the SEC, not the PEZA office. What the hell does the SSS have to do with the validity of anything the PEZA folks do? Back to get a letter from PEZA saying the PEZA registration meets PEZA standards and the registered agent is just fine thank you for your concern.
At this point Mr. Dong has long since earned his money for the contract but it still isn’t complete so he isn’t making much money on the deal but he bravely keeps going back. Kano boss is visiting so before the fifth trip a visit is paid to the PEZA marketing office to discuss the matter. Eyebrows furrow, noses are rubbed, no one can find anything wrong with the paperwork that was submitted, the same paper work that passed the SEC, BIR, Philhealth, Pag iBig, PEZA, and nearly 28 sub departments at PEZA is has been rejected four times over three weeks. Big PEZA Boss makes a phone call to the SSS, why you messing with our locators? Cabinet level bigger boss can be brought in if needed. No? The papers actually fine? And the locator can come by this afternoon and complete the registration? Okay Ms. Regional Head, they will be down to see you at 2 pm.
And they are and Ms. Regional Head saved face by leaving early for the day, forcing Mr. Dong to come back the next day to complete the task. A matter of face you know. No bribes obtained, but face was saved.
Next great example. The trade facilitation department needs their application completed but you need two other documents that can’t be obtained without the trade facilitation department certificate of registration. Yeah, completely circular, no chicken without first having an egg but the chicken is needed to lay the egg. Dong Congressmen wrote legislation that can’t be complied with. Solution? Sign an affidavit and an agreement of undertaking that differ from each other only in form, same info, both stating that you can’t provide the two requirements until you complete the application and obtain the registration of the permit that you need the two requirements for. Pay 300 pesos to notarize each one, and Bob’s your uncle, you have a waiver for both requirements and can provide them in three months.
Next down to the BIR to go through accreditation for importing. First thing you need is your certificate of registration with the BIR that you got months ago. Yes, you are at the BIR. Yes they can look on their screen and see your account info. Yes, you need certified true copies with the pretty stamps so off you go to a different BIR office. Now you almost have all the requirements, authenticated copy of your last tax return with attachments, no a photo copy of what you filed isn’t good enough, pretty stamps…. Always pretty stamps…., then a certified true copy of the last Mayor’s permit even though you don’t have to have one because of the PEZA zone so another affidavit to do and notarize, copy of building lease, map of the area, site map of the development, and photographs of the business, check. Photocopy of latest utility bills, undertaking to preserve and maintain records for ten years, certified true copy of the last General Information Sheet from the SEC, certified true copy of the PEZA zone’s articles of incorporation and certificate of registration (you are renting one of their buildings, why the hell is this needed?), profile of the business, profile of each member of the board of directors, profile of any employees, representatives, or agents dealing with this matter (including Mr. Dong), original compy of the secretary’s certificate of the minutes of the board meeting where the designated representative was appointed to handle this matter, original copy of the board resolution that authorized the designated representative to handle this matter.
And you are done with the requirements…..for the application, not the actual permit. Once all this is in order, no smudges please, you are allowed to pay 2000 pesos to submit the two inch thick stack of documents then ten days later you go back to pick up the application….not the permit, the application. Next you have six documents to obtain from the BIR itself, A,B, C, D, E, and F. Each document certifies that each of the six departments says you have a clear record. Now last year the BIR did this internally but it was changed to SPEED UP the process, with the idea that an individual could obtain the six signed documents quicker than the Regional Head could have his own employees gather the documents. The boss can’t force them to do the work in a timely manner but a customer can. Right….
Okey Dokie, got all that done? Now you have to drive to Manila to actually file the application and requirementsthat you have worked on for three weeks. You live in Cebu? Sucks to be you…..off you go to Manila.
Take a break from the paperwork while doing all of this for one permit out of dozens that you need to operate and read the stories in the newspapers on how the PEZA, Subic, and Clark locators are refusing to complete their permits after they move in. Imagine that.
Now this permit lasts three years you lucky dog. Others are renewed annually. The deadling for re applying is exactly three months before the old one expires. Don’t be late, you will have to re apply and go through all of this again if you are a few days late.
And welcome to the Philippines Sirrrrrr. We are trying to create jobs for our people and we are Asia’s premier place to do business.Published in