A GOOD friend of mine wished to start his own business, and he complained that local officials required him to pay the fees in person or through a representative. Digital payments, such as online banking or GCash, were not allowed in his locality. Another friend wanted to renew his car registration, but the Land Transportation Office (LTO) required him to bring his vehicle to its premises for inspection after the emission testing. The vehicle was the latest-model Toyota Fortuner with roughly 13,289 kilometers on the odometer.
These are the day-to-day struggles that middle-income families deal with when transacting in our bureaucracy. It could be much worse for the poor. Red tape, long lines and corruption are regular experiences that make every citizen shudder at the thought of personally processing transactions in government. Many are forced to hire “fixers” or pay grease money to speed up the process. The transaction costs of doing business here are astronomical, discouraging both investors and even foreign tourists.
The core problem is the absence of business sense among bureaucrats. They are often mere regulatory tyrants and rigid enforcers, whose obsessions with rules severely damage economic growth and erode public trust. Ordinary citizens detest the runaround they receive when dealing with the bureaucracy, whether paying taxes, requesting certificates, or availing themselves of basic services. There seems to be no urgency among frontline bureaucrats, who instruct petitioners to come back another day — a practice that has evolved into institutionalized corruption.
If only bureaucrats could appreciate the economic losses their constituents endure when transacting with public offices riddled with red tape. These include transportation and food expenses, lost wages, and even the toll on their health and mental well-being. During the pandemic, online transactions became more widely accepted, but after it subsided, many offices reverted to their bad, old ways.
And why do most bureaucrats refuse to develop a business sense?
For one, many do not see the economic burden they impose on people transacting with their offices, as well as the adverse effects on the economy. Second, bureaucrats are arrogant and callous toward citizen complaints because they enjoy security of tenure or are protected by political patrons. Third, there is no effective performance evaluation system that genuinely assesses the performance of public servants. Finally, these bureaucratic pathologies remain entrenched across government due to nepotism, patronage and partisan politics.
Worse, the absence of business sense persists despite legislative attempts to address it through the Ease of Doing Business Act and the Anti-Red Tape Act. Amid the advent of communication technologies and digital platforms, the bureaucracy continues to cling to manual processes and documentation, often citing the regulatory policies or directives of the Commission on Audit (COA). In truth, some bureaucrats reinforce their hyperbolic significance by creating more regulations at the expense of public service.
Truth be told again, these processes could be faster and cheaper if the government shifted its focus from hiring more people or creating new rules to adopting digital technologies. Many functions are irrelevant and redundant, and could perhaps be better performed through cutting-edge technologies. A younger generation of public servants could be hired to replace oldtimers who no longer add value to their agencies. But the bureaucratic system often frustrates their entry by making the recruitment and selection process rigged in favor of their political surrogates.
The bureaucracy may never perform as seamlessly, competently and efficiently as the private sector because bureaucrats are not economically incentivized, except for the abstract reward of public service. There are functions that the government is good at, such as policy design, program inception and oversight, but actual delivery and implementation could benefit if done by the private sector due to its efficiencies, continuity and track record.
The way to go is to privatize the bureaucracy. This includes real performance appraisals, reviewing security of tenure, retiring inept employees, and digitizing processes from applications and approvals to online payments. Likewise, outsourcing appropriate functions to the private sector rather than rely on bureaucratic deadweights is more economically rational.
This absence of business sense has now damaged the current administration. I commiserate with President Ferdinand Marcos Jr., whose public trust ratings have declined amid record-high red tape, difficulties in doing business, and unbridled graft and corruption. Heads should have rolled earlier in his administration, but that seems to be water under the bridge now.
This absence of business sense in the bureaucracy will continue to torment Filipinos unless we root out and overhaul this dysfunctional system. A bureaucracy that burdens its citizens who pay their salaries and discourages investments ultimately destroys the social contract between the State and the people it serves.