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REGULATORY IMPACT ASSESSMENT (RIA) GUIDELINES 

PHILIPPINES RIA PILOT PROGRAM 

Trialled by the 

Department of Finance, Department of Labor and Employment and Department of Tourism 

APPROVAL 

These Regulatory Impact Assessment (RIA) Guidelines have been approved for implementation as part of the Philippines RIA 

Pilot Program by the: 

• Department of Finance 

• Department of Labour and Employment 

• Department of Tourism 

Secretary Secretary Secretary 

Date / / Date / / Date / /

PHILIPPINES - REGULATORY IMPACT ASSESSMENT (RIA) GUIDELINES 

DRAFT – FOR DISCUSSION AND FINALISATION 

TABLE OF CONTENTS 

1. Purpose and Objectives 

2. Context for RIA Adoption 

2.1 Reasons for RIA Regime in Philippines 

2.2 Regulatory ‘Best Practice’ Principles, Process and Elements 

2.3 Philippines Law Making Authorities and Approval Process 

3. Overview of RIA Regime in Philippines 

3.1 Scope of RIA Application 

3.2 Key Documents in RIA Process 

3.3 Key Steps in RIA Process 

3.4 RIA Leadership and Governance (RIA Roles and Responsibilities) 

4. Steps in the RIA Process 

4.1 Step 1: Determining that the Regulation is Required 

4.2 Step 2: Confirming that the Regulatory Proposal is Within Scope 

4.3 Step 3: Preparing a Preliminary Impact Statement (PIA) 

4.4 Step 4: Determining the ‘Significance’ of the Regulatory Impact 

4.5 Step 5: Preparing a Regulatory Impact Statement (RIS) 

4.6 Step 6: Preparing the Regulatory Assessment Summary (RAS) 

4.7 Review 

5. Key Assessment Issues 

5.1 Assessment of Impacts 

5.2 Impact on Competition 

5.3 Compatibility with Other Regulations 

5.4 Stakeholder Consultation 

Version 4.0 23 July 2012 DRAFT Page 2/24



5.5 Compliance Awareness 

Attachments 

A. Philippines RIA Quick Reference Guide 

B. Preliminary Impact Assessment (PIA) Template 

C. Regulatory Impact Statement (RIS) Template 

D. Regulatory Assessment Summary (RAS) Template 

Acknowledgements 

These Guidelines including templates have been prepared with reference to the law making and approval processes in the Philippines, and have 

been principally informed by the regulatory impact assessment regimes, and drawn from the regulatory development guidelines of the following 

jurisdictions: 

1. Queensland Government (Australia) 

2. Australian Government 

3. British Columbia Government (Canada) 




1. PURPOSE AND OBJECTIVES 

The Regulatory Impact Assessment (RIA) Guidelines assist the Department of Finance (DOF), Department of Labour and Employment (DOLE) 

and Department of Tourism (DOT) staff responsible for developing, reviewing and improving regulation to produce better regulation in 

accordance with regulatory best practice principles. 

RIA is a process that is part of the broader regulation making and review processes of the departments. The RIA process promotes assessment 

of the impacts of a regulation with proper methodology, including cost-benefit analysis and stakeholder consultation to ensure that the regulation 

is effective and efficient in achieving policy objectives while minimising negative effects on stakeholders affected. 

See attachment A for Philippines RIA Quick Reference Guide for overview of the RIA system being piloted at DOF, DOLE and DOT. 

2. CONTEXT FOR RIA ADOPTION 

2.1 Reasons for RIA Regime in Philippines 

Good regulation is fundamental to a well functioning economy and society. It protects the community, business and the environment. 

Conversely, regulation that is unnecessary or poorly designed can impose significant cost on business, community and government through 

inefficiencies due to the time taken to understand, comply with and enforce these regulations. This has the perverse result of lower efficiency 

and profits for business, higher prices for consumers, and greater administration costs for government. 

The 2012 World Bank’s Doing Business report ranks the Philippines 136 out of 182 countries in terms of the ease of doing business, a drop of 2 

places from a ranking of 134 in 2011. In 7 out of 10 topics, the Philippines’ rankings dropped up to 10 places compared with performance in 

2011. The report provides some comparative examples of the difficulties with doing business in the Philippines. For example, the World Bank 

estimates 15 procedures are required to start a business in the Philippines (compared with 5 procedures in OECD countries), taking an estimated 

35 days (compared with 12 days in OECD countries). The cost of starting a business (as a % of the economy’s income per capita) is also very 

high (19.1% in the Philippines compared with 4.7% in OECD countries). As the Micro, Small and Medium Enterprises sector (MSMEs) 

accounts for over 99% of enterprises in the Philippines, the burden of these costs falls disproportionately on MSMEs. 




The RIA system targets the development of regulations in accordance with regulatory best practice principles, and therefore improvement in the 

quality of new regulations. The RIA system aims to deliver an improved regulatory environment for business that is characterised by: 

1. more transparency, rigour, accountability and consistency in the development and application of regulations; and 

2. a focus on minimising unnecessary and excessive regulation that diverts time and money away from more productive pursuits. 

An improved regulatory environment will lower regulatory compliance costs (red tape) and foster more robust competition in the Philippines 

economy, and provide confidence to the international community (eg., aid organisations and corporate investors) and the Philippines community 

(eg., local businesses and investors) to participate and invest in the necessary economic and social reform of Philippines. This will benefit the 

welfare of the Philippines people. 

The establishment of a RIA Regime in the Philippines is being piloted by the Department of Finance, Department of Labour and Employment, 

and Department of Tourism through support and funding by the Asian Development Bank under the Strengthening Institutions for an Improved 

Investment Climate program. 

2.2 Regulatory ‘Best Practice’ Principles, Process and Elements 

Principles 

Widely recognised ‘best practice’ principles in making good regulation are: 

1. Establish clear reasons why Government needs to take action to address the problem 

2. Examine the benefits and costs of a range of different policy options to address the problem including regulatory and non-regulatory 

approaches 

3. Adopt the policy option that provides the greatest net benefit to the community 

4. Ensure that the regulation does not restrict competition unless the benefits from the restriction outweigh the costs or there is no other way 

to achieve the policy objectives 

5. Provide support and guidance to both regulators and parties required to comply with the regulation to ensure the policy objectives and 

regulatory requirements are clearly understood and met 

6. Review the regulation regularly to ensure it remains relevant and effective over time 

7. Consult in a meaningful and effective way with key stakeholders at all stages during the development and review of the regulation 

8. Ensure that the regulatory action by the Government is proportionate and effective to the significance of the problem being addressed. 




Process 

RIA can be applied to new regulations, ensuring that only regulations that benefit the economy become effective, as well as to existing 

regulations, by modifying or removing regulations already in place. 

Generally, when implementing a RIA Regime, the focus is first on the flow of new regulations. Once good practice has been established, the 

focus then extends to reforming the stock of existing regulations. 

In developing a regulatory proposal, a regulator (eg., department) would: 

1. Prepare a Preliminary Impact Assessment (PIA) to establish whether the regulatory proposal is likely to involve impacts on business, 

community (individuals) or the government. 

2. If the PIA shows the impact could be significant compliance impacts on business, community or the government, then the cost of those 

impacts are estimated using a standard costing methodology and a Regulatory Impact Statement (RIS) is completed. 

The PIA/RIS is both a process whereby each regulation is assessed and a document recording how the regulation was made and assessed. 

Elements 

Key elements of a ‘best practice’ RIA Regime are: 

1. Institutional Arrangement is established that - 

i. Embeds the RIA Regime in the law/regulation making process and systems 

ii. Establishes a central RIA body to support regulators with RIA 

iii. Establishes RIA Champions/Units in regulators (eg., departments) to be the contact point with the central RIA body. 

2. RIA Support Materials and Tools are developed that - 

i. Promote ‘best practice’ principles in regulation making and review 

ii. Support both regulators and regulated parties to participate efficiently and effectively in the RIA system. 

2.3 Philippines Law Making Authorities and Approval Process 

The 1987 Constitution of the Republic of the Philippines governs the making of laws in Philippines. 

Key authorities in the Philippines law making system include: 




• President 

• Congress 

• Secretaries of Departments 

• Independent authorities 

• City Municipal Provincial Council 

• Local Government authorities 

The Philippines system of legal acts is comprised of: 

1. Constitution 

2. Republic Acts of Congress 

3. Executive Orders and Issuances of the President 

4. Regulatory Guidelines of independent Authorities 

5. Administrative Orders, Implementing Rules and Regulations, and Memorandum Circulars of Department Secretaries 

6. Resolutions and Ordinances of Local Governments. 

2 primary forms of regulation in the Philippines system are Acts and Orders. These are usually prepared by the relevant Department, initiated by 

the Secretary or at the request of either the Congress or the President. 

For the purposes of the Philippines Pilot RIA Guidelines, the term ‘regulations’ is used to refer to regulatory proposals approved and issued by 

Congress, the President, and the departments involved in the RIA Pilot Program, ie. DOF, DOLE and DOT. 

The process and approvals required for making regulations in the Philippines varies depending on the type of regulation proposed. 

An overview of how RIA fits into the law making approval process for regulations is set out below. 




Administrative Orders, Implementing Rules and Regulations, and Memorandum Circulars of the Secretary 

These regulatory proposals relate to sector-specific matters and are approved/issued by the Secretary of the Department. An overview of the law 

making approval process for Administrative Orders, Implementing Rules and Regulations, and Memorandum Circulars subjected to RIA is set 

out below. 

TO BE FINALISED 

Executive Orders and Issuances of the President 

Under the Administrative Code of 1987, the President can issue executive orders and other ordinances. These regulatory proposals are usually 

used to enable the implementation or execution of constitutional or statutory powers. An overview of the law making approval process for 

Executive Orders and Issuances subjected to RIA is set out below. 


Republic Acts of Congress 

Under the Constitution, Congress is vested with the highest law-making powers and is responsible for the development of Republic Acts.he 





OVERVIEW OF RIA REGIME IN PHILIPPINES 

3.1 Scope of RIA Application 

Initially, the RIA system will apply, at a minimum, to proposed nominated Acts and Orders that impact business, community or government. Other proposed 

regulations (including via other instruments such as regulatory guidelines and resolutions) may be subject to the RIA system at the discretion of the relevant 

decision-maker and may be required more generally at a later date. 

In the initial stage of the pilot, RIA will be applied to only a select number of regulatory proposals to test the appropriateness of the structure and design of the 

RIA regime for the Philippines unique circumstances. 

3.2 Key Documents in RIA Process 

Regulatory 

Proposal 

(acts/IRRs/orders/ 

memorandums) 

PIA (Preliminary 

Impact Assessment) 

Not Significant 

Impact 

RIA Guidelines 

Significant Impact 

RAS (Regulatory 

Assessment Summary) 

+ 

Regulatory 

Proposal 

Decision 

Maker 

RIS (Regulatory 

Impact Statement) 

Significant Impact 




RIA Guidelines 

Preliminary Impact 

Assessment (PIA) 

Regulatory Impact Statement 

(RIS) 

Regulatory Assessment 

Summary (RAS) 

Provides context and perspective for good regulation making, and explains the elements and application of the RIA 

system. 

PIA is completed for all regulatory proposals that the RIA system is to apply to and helps determine the significance of 

a proposal and whether a RIS is to be prepared. 

RIS is a public consultation document that is completed for all regulatory proposals considered to potentially have a 

significant impact on stakeholders (that is, on business stakeholders in the initial stage of implementation of the RIA 

system). 

RAS is prepared and attached to each regulatory proposal for review by Secretaries of the pilot departments and other 

relevant decision-makers (eg., Congress, President, or Office of the President) when seeking approval of the regulation. 

It summarises the regulatory development process and outcomes including compliance with regulatory ‘best practice’ 

principles. 




3.3 Key Steps in RIA Process 

Establish Need for Government 

Action 

Step 3 

Prepare Preliminary Impact 

Assessment (PIA) 

Develop Policy Options 

Step 4 

Is there a Potential 

Significant Impact? 

Is Regulation Required? 

No 

Step 1 

No further RIA system 

requirement 

No 

Yes 

Step 2 

Is the Regulatory 

Proposal within Scope 

of the RIA system? 

Yes 

Step 5 

Prepare Regulatory Impact 

Statement (RIS) 

2 steps: 

1. Prepare initial RIS for public 

consultation 

2. Complete final RIS including 

consultation 

No further RIA system 

requirement 

Step 6 

Complete a Regulatory Assessment 

Summary (RAS) 




3.4 RIA Leadership and Governance (RIA Roles and Responsibilities) 

Development and implementation of the pilot RIA regime in the Philippines is led and championed by the Inter-Agency RIA Steering 

Committee which will oversight the development of a national RIA strategy for rollout across all Philippines departments and the 

implementation of the RIA pilot program by participating departments. Each participating department has established an internal RIA 

Committee to lead and champion the implementation of RIA within the department. 

Key stakeholders in the Philippines RIA leadership and governance are set out below. 

Proposal and final 

RIA documents 


RIA documents 

Other 

Government 

Departments or 

Agencies 

Philippines 

Businesses and 

Community 

Consultation 

Consultation 

RIA Pilot 

Department 

Develops 

Regulatory 

Proposal 

(acts/IRRs/orders/ 

memorandum 

circulars) 

d /i l 


RIA documents 

Proposal and draft 

RIA documents 

RIA advice, 

training and 

approval of RIA 

documents 

Department 

RIA Champion 

Department 

RIA Committee 

Department 

Secretary 

Other Relevant 

Decision-Maker, 

eg. Congress, 

President 

(to be confirmed) 




Key RIA roles and responsibilities of these key stakeholders are set out below. 

Secretary 

Under-Secretary 

Inter-Agency RIA Steering 

Committee 

RIA Committee in Pilot 

Departments 

Pilot Departments 

DOF 

Review Committee eg. Office of 

the President (to be confirmed) 

With support from the Under-Secretary and RIA Committee: 

• responsible for the department’s RIA Pilot including implementation and approving key RIA documents (eg., Regulatory Impact 

Statements (RIS) and Regulatory Assessment Summaries (RAS) 

• reviews regulatory proposals with attached Regulatory Assessment Summary (RAS) before approving for consideration by the 

Office of the President. 

Champion RIA (across government and with external stakeholders) and represent the department on the Inter-Agency Steering 

Committee 

Oversight the: 

• development of a national RIA strategy for rollout across all Philippines departments; and 

• implementation of the RIA pilot program across participating departments. 

• Leads the development and implementation of the RIS system across the department 

• Provides RIA training to the department and other relevant stakeholders (eg., President Management Office staff involved in 

review of regulatory proposals and Regulatory Assessment Summaries (RAS)). 

• Supports the department in developing regulatory proposals consistent with Government law making and RIA system 

requirements and completing RIA documents. 

• Implements the RIA system including appropriate internal control systems to support compliance with the RIA system 

• Develops regulatory proposals in accordance with Government law making and RIA system ‘best practice’ requirements 

• Liaises with DOF on regulatory proposals subject to RIA 

• For each regulatory proposal, completes the PIA and RAS and, where significant impact a RIS. 

• Lead, advocate and advice on RIA across government and with external stakeholders 

• Support the work of the Inter-Agency RIA Steering Committee 

• Report on best practice regulation activities in the Philippines Government 

Reviews RIA regulatory proposals with attached Regulatory Assessment Summary (RAS) before approving for Congress or 

President’s consideration. 




Other Philippines Government 

Departments/agencies 

Philippines Businesses and 

Community 

Supports RIA pilot departments in development of RIA documents for regulatory proposals, including advice on 

compliance/administrative impacts, cost-benefit analysis and consistency/inconsistency with existing regulations. 

Supports RIA pilot departments in development of RIA documents for regulatory proposals, including advice on compliance 

impacts, cost-benefit analysis and consistency/inconsistency with existing regulations. 




3. STEPS IN THE RIA PROCESS 

4.1 Step 1: Determining that the Regulation is Required 

It is critical to establish what is the problem/s, and the significance and risks that arise from the problem. For example, the problem/s may be 

related to: 

• Public health and safety 

• Environmental protection and conservation 

• Free market competition and equitable allocation of resources 

• Reliable information and statistics for policy and strategic development 

• International agreements (eg., ASEAN and WTO) 

In defining the problem, identify the issues that need addressing, causes, current effects, who is affected and the risks and outcomes likely to 

result if no action is taken. 

Also identify any existing regulations related to the problem/s and why they are not addressing the problem/s. 

In defining the objective in taking government action, it is important that the objective/s is expressed in terms of what is to be achieved 

(outcomes and outputs) rather than how the objective is to be achieved. Any constraints on the objectives should be identified. 

In identifying possible options to address the problem, both non-regulatory and regulatory approaches should be considered. Non-regulatory 

options include approaches such as simply providing information, public awareness campaigns and self-regulation (eg., by industry groups). 

Regulatory options include revising or removing existing regulation that may be causing the problem. Options to consider in addressing the 

problem include the current level of regulation including no regulation. The appropriate form of regulation to apply will vary depending upon 

the problem being addressed. 

In assessing the different options, it is useful to consider any budget or time constraints in addressing the problem, consistency with other 

regulations, and feedback and comments from relevant stakeholders. 

If regulation is not required, then there is no further RIA system requirement. 




4.2 Step 2: Confirming that the Regulatory Proposal is Within Scope 

Initially, the RIA system will apply to nominated proposed Acts or Orders prepared or being implemented by pilot departments that impact 

business, community or government. Other proposed regulations (including via other instruments such as regulatory guidelines or resolutions) 

may be subject to the RIA system at the discretion of the relevant decision-maker and may be required more generally at a later date. 

If the regulatory proposal is not within this scope of application, then there is no further system requirement. 

4.3 Step 3: Preparing a Preliminary Impact Statement (PIA) 

A PIA is the first stage in assessing the potential impacts of a regulatory proposal on business, government and community and helps in 

identifying whether a Regulatory Impact Statement (RIS) is required. 

A PIA is completed for all regulatory proposals within scope of the RIA system. Under this scope, the PIA is the initial level of assessment to 

assist in determining whether the proposal is likely to have a significant impact on business, community or government and therefore, that a RIS 

is required to be prepared. 

See attachment B for the Preliminary Impact Assessment (PIA) Template. 

For regulatory proposals assessed as likely not imposing significant impacts on business, the PIA provides the information to complete the 

Regulatory Assessment Summary (RAS) which accompanies the proposal to decision-makers for approval. 

The PIA requires a brief assessment of the potential economic (including competition), international agreement, social, environmental and 

compliance/administrative impacts on business, community and government. These impacts should be quantified where possible. 

Consultation is critical to the completion of the PIA. Consultation for a PIA may not be as substantial as that required for a RIS – for example, 

key stakeholders may be targeted rather than conducting a full public consultation. 

4.4 Step 4: Determining the ‘Significance’ of the Regulatory Impact 

Both direct and indirect impacts are to be considered in the PIA. Direct impacts are those immediate impacts on the stakeholder. Indirect 

impacts affect others through the impact of the proposal on stakeholders or other changes as a result of the proposal. 




Where appropriate, the cumulative burden from existing regulations and requirements should be considered when determining the significance 

of impacts on business, community and government. 

Careful assessment and judgement is required to assess whether a regulation is significant. For example: 

1. the higher the number of stakeholders affected, the more significant the impact 

2. the higher the level of impact (eg., number of regulatory requirements that need to be complied with, number of years that the regulation 

is in effect, and the cost and time in meeting requirements), the more significant the impact. 

Possible issues to consider in identifying impacts and examples of significant impacts on business, community and government are set out 

below. 

Economic impacts 

Possible impacts could include on processes, wages, profits, employment, skill levels, production costs, and productivity. 

Examples of significant impacts: 

• Effects on cash flow, profitability or prices (for example, greater than 5%) 

• Requires a high level of initial and ongoing investment to comply by business - see also compliance and administrative costs below 

• Effects on resource allocation and investment 

Competition impacts 

Possible impacts could include on the number of firms in a market, intensity of competition, restriction on choice of products or inputs for 

buyers and sellers, and entry and exit barriers to an industry. 


• Prevents entry or seriously restricts the conduct of business 

• Reduces the ability of, or incentives for the business to compete 

• Reduces consumer choice or access to goods and services 




International Agreement impacts 

Possible impacts could include on Philippines meeting its commitments and objectives under international agreements such as with the 

Association of South East Asian Nations and World Trade Organisation. 


• Prevents commitments being met under the agreement 

• Impacts objectives and outcomes being delivered as required under the agreement 

Social impacts 

Possible impacts could include on public health and safety, access to social services, quality of life and housing affordability. 


• Displaces the community or part of a community 

• Effects on skills development and levels 

Environmental impacts 

Possible impacts could include on pollution levels, biodiversity, soil erosion, habitat or species loss, and climate change. 


• Substantial environmental damage 

The PIA must include an estimate of compliance/administrative costs on each stakeholder group (business, community and government) unless 

they are considered to be negligible or trivial. For example, 

Compliance costs for business include additional resources required to comply with the regulation (eg., time, staff, training expenses, travel, 

expert advice, license fees, technical equipment). 




Administrative costs for government include additional resources required to administer and enforce the regulation (eg., time, staff, training 

expenses, administrative costs, new equipment and new technologies). 

Compliance/administrative costs are usually associated with activities such as notification, education, permission, purchasing, record 

keeping, enforcement, publication and documentation, procedural and other activities required by the regulation. 

If the potential impacts are not significant, assessment of the regulatory proposal ends with the PIA. If the potential impacts are considered to be 

significant, then a Regulatory Impact Statement (RIS) is prepared. 

4.5 Step 5: Preparing a Regulatory Impact Statement (RIS) 

A RIS is the second stage of impact assessment in the regulatory development and review process. Under the initial scope of the RIA system, a 

RIS only needs to be prepared where the PIA finds that the regulatory proposal is likely to impose a significant impact on business. 

A RIS is conducted in 2 parts: 

(i) 

The consultation RIS is used to engage with the public and seek the feedback of stakeholders on the analysis of impacts and options. It 

should be written so that it is easily understood by people who have no prior knowledge of the topic; and 

(ii) The final RIS is prepared after the stakeholder feedback is compiled and should include a summary of the results of the public 

consultation and consideration of the feedback received. 

The RIS is based on information in the PIA, but generally is more comprehensive with detailed analysis including a full cost-benefit analysis of 

the impacts of each policy option and the results of public consultation. 

See attachment C for the Regulatory Impact Statement (RIS) Template. 

The initial RIS is prepared and submitted to the Secretary or delegate for approval to release the RIS for public consultation. The initial RIS 

must be sufficiently detailed for informed consideration by and consultation with all relevant stakeholders. 

The final RIS, together with the RAS are submitted to the Secretary for approval of the regulatory proposal before sending to the President’s 

Office/other nominated office (to be confirmed) for review, comment and final approval, if required. 




4.6 Step 6: Preparing the Regulatory Assessment Summary (RAS) 

A RAS is prepared and attached to each regulatory proposal for review by the pilot department and other relevant authorities (eg., the President’s 

Office) when seeking approval of the regulation. It summarises the regulatory development process and outcomes with the regulation, and 

provides evidence to authorities as to whether the regulation was developed in accordance with regulatory ‘best practice’ principles. 

Under the initial agreed scope of the Regulatory Impact Assessment (RIA) system, where a proposed law or decree is assessed as likely to: 

(i) not impose significant impacts on business, the RAS is a summary of the completed Preliminary Impact Assessment (PIA); or 

(ii) impose significant impacts on business, the RAS is a summary of the final Regulatory Impact Statement (RIS). 

See attachment D for the Regulatory Assessment Summary (RAS) Template. 

All sections of the RAS must be completed and explanations provided for areas of non-compliance. 

The RAS endorsed by the Secretary is to be attached to the final regulatory proposal for subsequent review by the President’s Office/other 

nominated office (to be confirmed), if required. 

4.7 Review 

Regulation should be reviewed regularly to ensure it remains relevant and effective over time. 

Two key considerations are: 

1. Whether there needs to be a post implementation review conducted to ensure that the regulation delivers the polis objective in accordance 

with regulatory best practice principles? For example, a post implementation review could be very useful where a regulation was 

implemented urgently and did not have time to complete the full RIA process, or there is a high level of uncertainty with the impact 

assessment conducted); and 

2. When should the regular review of the regulation be conducted? For example, a regulation should be reviewed on a regular basis to ensure it 

is still relevant and effective (other jurisdictions typically review their regulation on the 10 th anniversary of a regulation) 




KEY ASSESSMENT ISSUES 

5.1 Assessment of Impacts 

Often a wide variety of impacts result from regulation. Impacts include economic, competition, international agreements, compliance and 

administrative, social and environmental impacts on all stakeholder groups affected (business, community and government) by the regulation. 

Both the PIA and RIS require an assessment of impacts of regulatory options. Generally, a cost benefit analysis (CBA) is used to quantify and 

assess impacts. While a detailed CBA is not required in a PIA, it can be useful to assess the significance of impacts. A detailed CBA is required 

in a RIS. 

The CBA is a tool that measures that quantifies the value in today’s dollars of benefits and costs associated with the impacts of each regulatory 

option identified. These values are examined against a base case, which is the value determined for the current regulatory position. 

However, not all impacts may be able to be quantified (eg., the level of effort to quantify may not be able to be justified because of the 

insignificance of the impact, or the required information is not available). In this case, the benefits and costs of impacts should be described in a 

qualitative way so that regulatory options can still be compared. 

Accordingly, impact assessment generally follows a 3-step process: 

1. Establish a base case for the current regulatory position – conduct an impact assessment for the current regulatory position (even if there 

is no regulation) and determine the net benefit (cost) position 

2. Establish an impact assessment for each regulatory option - conduct an impact assessment for each regulatory and determine the net 

benefit (cost) position of each option 

3. Compare the results of the impact assessment for each regulatory option against the base case and determine which provides the greatest 

net benefit to the Philippines. 

The regulatory burden (that is, red tape arising from unnecessary or excessive regulatory requirements) on business, community and government 

should be minimised. The greater the regulatory burden, the higher the compliance costs, and the more significant the impact on business 

efficiency and performance. The compliance and administrative burdens imposed by a regulation should be proportionate to the objectives of the 

regulation. 




A useful starting point to identify and assess impacts is to identify the number and types of regulatory requirements proposed. A search for 

words such as ‘must’ or ‘shall’ or ‘return’ may help identify regulatory requirements. For example (bold indicates requirements): 

A business owner is required to register his business and must: 

i. Submit a request for registration in the prescribed form setting out: 

a. name of the business 

b. business address 

c. type of business 

ii. Pay an annual fee 

iii. Place a copy of the registration notice up his business premises that can be easily seen by customers 

= 6 regulatory requirements 

Having identified the regulatory requirements, the impact of the requirements can then be assessed – quantitatively and/or qualitatively. 

5.2 Impact on Competition 

A regulation should not restrict competition unless it can be demonstrated that: 

1. The benefits of the restriction to the Philippines as a whole outweigh the costs; or 

2. The objectives of the regulation can only be achieved by restricting competition. 

Regulation is likely to restrict competition if: 

• It affects the structure of the industry/market (eg., limits the number of firms in the industry, or creates barriers to firms entering or 

exiting the market) 

• Businesses are restricted in their ability to choose the price, quality, range or location of their products 

• Compared to existing players, new entrants will have higher ongoing costs to participate in the industry/market 

• Innovation or the development of new products or services is negatively impacted. 




5.3 Compatibility with Other Regulations 

All new regulation should be compatible and consistent, to the extent possible, with existing regulations. 

Assessing compatibility with existing regulations provides an opportunity to consider whether the existing regulation can be simplified, repealed 

or consolidated. 

5.4 Stakeholder Consultation 

Consultation with affected stakeholders is critical at all stages of the regulatory development and review process. Affected stakeholders can be 

in business, community and government. 

Comments and feedback from affected stakeholders are critical to the regulatory development and review process because it assists with: 

• Understanding of the problem, its significance and possible risks 

• Providing perspectives and suggestions on alternate options to address the problem 

• Identifying and assessing competing interests 

• Providing a check on the regulator’s assessment of costs (including compliance/administrative costs) and benefits and whether/how the 

proposed option will work in practice 

• Identifying interactions between different types of regulations. 

Stakeholder consultation can reduce the risk of the regulation not achieving its policy objective and unintended consequences, and can help 

greater understanding with those impacted and their subsequent compliance with the regulation. 

Under the Philippines Pilot RIA system, regulating departments should ensure: 

• There has been adequate consultation with affected stakeholders to support the informed completion of the PIA 

• Affected stakeholders, where possible, are provided advance notice of upcoming consultation activities via the pilot department’s website 

• A minimum period (eg., 30 days) is allowed for all public consultation on RIS documents 

• Where approved for release, all final RIS documents are published on the pilot department’s website 

• The online register on the pilot department’s website lists all approved regulations for public access and availability. 




5.5 Compliance Awareness 

Compliance with regulations can be supported by avoiding poorly drafted or complex regulations and inconsistent interpretation of regulations 

by regulators and providing access to those affected by regulations (business, community and government) to supporting documentation and 

tools that provide clear guidance on interpreting and complying with regulatory requirements. 

Compliance is supported where: 

• Regulations are written in a clear way easily understood by people not familiar with the area of regulation 

• Information, and education and training related to the regulation is targeted at those required to comply and enforce the regulation 

• Regulators provide tools that make it easier to comply (eg., we based tools, electronic forms) 

• Regulators establish appropriate service standards and benchmarks (eg., response time) related to regulatory requirements 

• Those required to comply should be allowed sufficient time to prepare for the new regulatory requirements prior to commencement. 

The objective in designing a compliance awareness and support strategy is to achieve the greatest degree of compliance at the lowest possible 

cost to the regulator and regulated parties.

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