More Fun With Government Offices

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… 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 Bureaucracy


  1. Profile gravatar of Fr. Bong Bong Jolog Jun III
    Fr. Bong Bong Jolog Jun III

    The complete mindlessness of these fucking idiots knows no boundaries. I’ve long ago ceased asking what “such and such” are required for. I know that there is just no logical explanation going to be put forward – primarily because there just is no actual reason for it. It’s completely mindless. Bureaucracy for the sake of bureaucracy.

  2. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    Agreed, however there is one important element that is also a reason, the inherent inclination and indefatigable efforts of the Filipinos to get around the rules and laws and scam the system, the government, or an individual. I liken it to a good zombie movie. World War Z was a good one. Remember when the dude had flown into Israel? Some of the refugees were so happy to be behind that huge wall that they started singing and the zombies started throwing themselves at the wall till the built up a big enough pile to get over the top? Brainless, driven by instinct, they the defeated the wall, just one of the reasons for the insane system they have built up.

    You aren’t in Kansas any more, Toto.

  3. Profile gravatar of Don Quixote
    Don Quixote

    Did you see Steve Forbes on TV recently in the Philippines for some bullshit conference.
    He talked about the bullshit to establish a business and quoted NZ, Ten Minutes work, last time I set a business up in Australia, I did it myself in 30 min.
    Ok Not a corporation, but I didnt need that at the time. I just registered my business name and went off and got my premises, in a business zoned area.
    No fixers in sight and trading within the hour, longest time was getting the land line from fucking telco.connected.

  4. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    So true, mostly the same in the U.S. unless you are building something contrary to the existing zoning laws.

    But NZ, Australia, and the U.S. have educated and intelligent individuals that won’t try such a stupid scam that anyone above the age of six wouldn’t wise up to. Here they are so stupid that they think they can get away with it.

    1. Profile gravatar of
      David Harden

      I have been asking for years when they say It’s more fun in the Philippines. What is? I ask them to name 1 thing that wouldnt be more fun somewhere else. That ends the conversation pretty quick. LOL

  5. Profile gravatar of BLX2

    Don’t know why you guys do it… Would never set up a business here. Will never buy property here… Now I’ll never buy another vehicle here or pay another peso to LTO… Life’s just too short…

    1. Profile gravatar of
      David Harden

      Love the new LTO law saying no plate no travel. Over a year and a half to get the motorcycle plate, Truck plate was 14 mths and has a different region on it, car plate is still unavailable after 6 mths but told by dealer, just pay xtra and have 1 made till real ones come. What a fucking country. 5 motorcycles and only one that actually had a plate that arrived within 6 mths was a Ninja I got before Yolonda in Tacloban. Then all paper work was destroyed in typhoon and took a year to get the stupid shit and so much time, energy and Peso, I have sold all motorcycles but my wifes, which she is afraid to drive because of all the idiots here on the road. I switched to a kickass bicycle to avoid having more frigging paperwork, and actually can travel around at a faster rate than I can in a car or truck, but cant ride the family with me. And a quiet bicycle has allmost gotton me killed every ride because cabs, multicabs and jeepneys dont look when they pull out. I hate it here.

        1. Profile gravatar of
          David Harden

          stubborn as a rock and every complaint I have her comments seem to me, to justify the stupid on the pinoy side. My wife is also from Tacloban, worked as VP of college de la salle or something like that.Not the huge real one, but a knock off one with the same name. after 10+ yrs or should I say after Yolonda, after she was gone from there because I made her stay home and raise the child like a mother, (fuck yayas,) they had to reapply for a new name to have the school rebuilt from damage,cuz the real college sued.
          Very hard headed wari wari.I sleep with one eye open. lol

        1. Profile gravatar of
          David Harden

          If I didnt hate the stupid public transpo drivers for lack of common sense, lack of maintenance, 10 people with wet hair sitting on my lap, my head didnt bang the top of the ride, I might not drive. But if I die from it, I at least want to go knowing I had some say so in the death. In terms of controlling the vehicle. There is no rational thought to what they do Ion the road. I wonder if esp would help, they dont even know what the hell they are doing how could I?

  6. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    Fair enough question, not sure why others take the plunge but an my facility in the U.S. it costs me $40.00 per man hour. That is a loaded man hour, with overhead included. So if you produce a widget that takes an hour to make and package you add $40 to the materials to get your cost of production. You might be able to add a 10% profit on top if you have a niche product, lots of stuff gets manufactured at less net profit than that. Same widget produced in the RP is going to cost me around $2.75 to $3.00 per loaded man hour. Add $7.00 to ship it to the U.S. and you have a $30.00 savings. I can take raw materials, process it into components, crate it, ship it every few months to the U.S. and have less money in the components than the cost of raw materials here in the U.S.. Of course you tie up lots of money in inventory so the cash flow sucks till things are flowing well and the cash catches up with you.

    So far there haven’t been any labor problems but we are working mostly family members of my GF. Camera system records continuously during business hours so they keep moving and productive, records on alert24/7 to the cloud, so haven’t lost anything so far. Just treat them well and they are usually content to do their part. If not, there are many ready to step into their place if needed.

    The paperwork is insane but yesterday I paid the accountant to head down and file an income tax return for closing out an entitiy. Price for spending the better part of a day filing that ITR and some other odds and end, $12.00 for the accountants time. Dongs work cheap, they will have connections that usually work. Count on the government workers to try to shake you down but they aren’t as aggressive as the crooked cops or Customs agents. Just say no and call someone higher up if the problem persists. The reason I decided to post on operating a business here in the RP is that it is a lot like the dudes selling E books enticing other dudes to retire to the RP, what information out there is scant on actual processes and headaches. If you have a fairly good profit margin or cost advantage, if your product is labor intensive, and you can obtain good quality materials locally or are able to import what you need you can make some money making stuff for export. Just figure on spending more on the permits, licenses, and government B.S. than any other item in your budget.

    And never forget that anything you invest might be gone next year. The legislators talk about taking down Subic, Clark, and some of the other zones just about every year. Lots of cronies wanting to get their hands on that land and nationalize he billions of pesos invested in those zones. So far wiser heads (or more patient) have prevailed but you could wake up tomorrow and find all the incentives gone and be paying a 30% tax rate on what you produce.

    And once you have a business going all your travel back and forth plus your accommodations is now tax deductible, offsetting some of your U.S. income.

    1. Profile gravatar of TightWired

      So I’m guessing that if the profit margin is still there, then at the end of the day all the b/s is worth it.
      I was talking to a Norweigan guy a while back. He contracts/makes/buys commercial fishing nets. A few times a year he loads up the shipping containers full of nets and ships them back to Europe to sell. After all the bullshit, bribes, BIR, Customs, shipping…he still apparently makes enough profit.
      And like you pointed out…he also makes his monthly Business trips (work one day, 10 days holiday) and writes these off.

  7. Profile gravatar of Idiotocracy
    Idiotocracy Post author

    Interesting business he has. Perfect for the Philippines. You can ship stuff to most anywhere in the U.S., and I would imagine Europe as well, for around $3.00 per cubic foot, lots less if you live near the West Coast. Reasonable shipping from China, air freight runs about a buck fifty per pound, pallets of stuff can be brought to a RP port in for less than it would cost you to ship a pallet of materials around the U.S.. And dirt cheap to bring a Chinese tech over to service something if you use Chinese machines.

    What is needed is for a bunch of expats to get together, business types, each one producing something or wholesaling something, and get a container going back to their home country once a month or once a quarter. Hard to finance filling a full container for a small business but if you could find ten expats that were trustworthy (LOL, and Santa Clause is real, Virginia This country would be booming if they lifted the restrictions on investment by expats and simplified the B.S. government processes. I was looking at a scan of a simple bring in permit needed to bring locally bought materials into the zone, six flip signatures needed on that one page form that they charge 200 pesos to process.

  8. Profile gravatar of FHPS

    if you get rid of staff you gotta close them off properly
    they come back months later (asked me for a loan) when i didnt give
    said some bullshit about unpaid wages. Filipinos inherently by nature want to rip people off even if they dont know it.
    i had some come back and say your a week overdue in wages – penalty 80%! interest. wtf?
    where was that written on an agreement?
    go fuck yourselves to your pinoy boss who
    1. pays monthly (arrears of course)
    2. you supply everything even buying a gate pass for 300p in one case (days wage lol)
    3. treated like shit
    FILIPINO LOVE THAT ..they gravitate to shit, wanna have jobs treat them badly
    so they can crowd around and give each other sob stories
    titled under the heading “I HAVE A PROBLEM”

    Fuck me
    1. the ports are shit
    2 the ports are a mess
    3. getting goods exported is HIGH making most things uneconomical
    even if its costing 1/10th factor into the cost of shipping

    1. Profile gravatar of Idiotocracy
      Idiotocracy Post author

      Yeah, when they want to borrow money, look out! I had an accountant that asked to borrow 20K to fix his nipa hut before it collapsed and killed him I was told. Stupid bugger. I refused and the dude started stealing the tax payment and pocketing money advanced to pay for fees on a couple of projects he was doing for me. I saw what was coming, a sudden inability to turn in the ORs for the taxes and fees and made him account for everything. By then he had embezzled about 12K. We were in the middle of two major undertakings that I needed the bloody thief for so I read him the riot act and he promised to straighten up if I gave him another chance. I no longer allowed him to handle money so the little thief tried jacking up notary fees and local government fees. I of course knew what notaries charged and the government fees could be found online. When he realized he couldn’t steal anything he quit working on everything and I finally replaced him with another dong accountant.

      Paying wages and not getting ripped off means keeping regular hours, a camera system that starts recording a half hour before and a half hour after you shut down, always have the workers sign a receipt for their pay, and follow the labor laws to the letter.

      Yeah, they like the shit that their native employers heap on them. If they are poor no one asks them for money and they don’t have to wait for that other shoe to drop. Nothing to lose= happy dong.

      The exporting is actually one thing they don’t screw up. Not that difficult to get a Philexport license. I can get a container delivered and have it on a ship in a week or so. Zero problems so far. Incoming is a bit different though, major hassle quailfying, the only time you get treated like a citizen is when you apply for an import permit and then they think you are as shiftless and dishonest as a native born dong. Get on a PEZA zone where you have some protection from the crocodiles in Customs and local government and you can make some money if you can market the product back home.

  9. Profile gravatar of 30-30

    Well, I dont have a problem getting rid of my maids, I pay for them to come to manila,, then they disappear!!!!!!!!
    However none of them have stole from me. They just use me for a bus ticket.
    Fuck em,, next time ,, noooooooooo maids…I got a front loader washing machine and It just drives me nuts to see them work soooooooooo slowly,,.

    1. Profile gravatar of Phil Doh
      Phil Doh

      We had a maid who refused to use the washing machine, preferred to sit there spending hours hand washing everything. I think this new technology scared her.