LGUs Contribution

in Advancing Ease of Doing Business in

the Philippines

Dir. Anna Liza F. BonaguaBureau of Local Government Development

Department of the Interior and Local Government

NABLO 3rd National Convention:

Connect: Enabling Growth

Towards a Digital Economy

GOOD NEWS!

124th

95th

Philippines

From RA 9485: Anti-Red Tape Act of 2007, the new law is RA 11032: Act Promoting Ease of Doing Business and Efficient Government Service Delivery (EODB EGSD) Amending for the Purpose RA 9485 otherwise known as the Anti-Red Tape Act of 2007, and for other Purposes

EODB EGSD

Short Title is Ease of Doing Business and Efficient Government Service Delivery (EODB EGSD) Act of 2018 Act of 2018

Coverage

business and non-business

transactions

National Government Agencies

(NGAs)

Local Government Units

(LGUs)

Government Owned &

Controlled Corporations

(GOCCs)

Other Government Instrumentalities

(whether located in the Philippines

or abroad)

Reduce Processing Time

Simple

transactions

Complex

transactions

Highly

Technical

Application

45working days

another

twenty (20)

working days

extension

For those

requiring

Sanggunian

Actions

Minimum Requisites

Zero-contact Policy

• Limit interaction with an applicant or requesting party to processes that are strictly necessary

• Filing and Payment

• For complex and/or highly technical transactions

• Encourage electronic submission of applications, and use of emails, and courier services

Minimum Requisites

Citizen’s Charter• Citizen’s Charter is an official document that

communicates, in simple terms, the service standards of the frontline services being provided to its citizens

• Dual purpose: 1) basis for establishing accountability and 2) for recognizing good performance to grant rewards and incentives

• Content of the Citizen’s Charter• Comprehensive and uniform checklist of requirements

• Procedure to obtain a particular service

• Person/s responsible for each step

• Maximum time to conclude the process

• Documents to be presented by the applicant

• Amount of fees and where payment shall be given

• Procedure of filing complaints

Minimum Requisites

Reengineering of system and procedures

• review for each of government services/processes through any or all of the following:

• Reduction in number of signatures to > 3 • Simplification of application forms and

documentary requirements• Automation or computerization of

processes/services• Reduction in processing time• Reduction in cost

Minimum Requisites

Accountability of Heads of Offices and Agencies

• Head of office or agency shall be primarily responsible to render fast, efficient, convenient and reliable service

• All transactions and processes are deemed to have been made with the permission or clearance from higher authority

• Failure to comply with the provisions shall render them liable

Minimum Requisites

DILG Interventions in Support of EODB Act (RA 11032)

Streamlining

Business Permits and

Licensing System

BPLS Standards

New Application

One (1) day, or two (2) days

At most

Renewal

Less than one (1) day, or one

(1) full day at most

No. of Steps

At most three (3) steps for both new and renewal of

business registration

Use of Unified Form

Unified Form (Print document and Electronic document)

No. of Signatories

at most two (2) signatories – the Mayor and Treasurer/BPLO

with alternative approving signatories

DILG-DTI-DICTJMC No.01 series of 2016

Streamlining

Construction Permit and

Certificate of Occupancy

Complementary Reforms

Setting-up of a Business One-Stop-Shop (BOSS) and integration of ancillary permits

Conducting joint Inspections for licenses and permits

Computerizing and automating business permit application processes

Online means/ Courier Service for transmitting business permit and other corresponding clearances and permits or via courier services

END TO END

ON LINE PROCESSING

Online applications

Electronic means (e.g. electronic mail) of providing businesses with tax order of

payments

Online-payments

Reengineering of Systems and Procedures

DILG MC 2018-214: Reengineering of LGUs Systems and Procedures in Compliance to EODB-EGSD Act of 2018

1. Review existing laws, executive issuance and local ordinances and recommend repeal

2. Undergo regulatory impact assessment to the proposed regulations

3. Formulation of service standards for LGU services per category of transactions and in accordance with prescribed processing timelines

Integrating Barangay Clearance in City/Municipality Permitting Processes

EODB/EGDS Act (RA 11032), Sec.

11(f)

“Barangay Clearances and Permit related to

doing business shall be applied, issued and

collected at the city/ municipality in

accordance with the processing time of said

Act. Provided that the share in the

collections shall be remitted to the

respective barangays”.

The pertinent provisions of RA 7160, specifically

Article IV, Section 152(c) is hereby amended.

LEGAL

FRAMEWO

RK

DILG-DTI-DICT JMC No. 01 s. of 2016: Revised Standards in Processing Business Permit and Licenses in all Cities and Municipalities

Sec 6.8.1 Integration of Barangay Clearance in the business permit process. Barangay clearance that are related in doing business maybe applied, issued and collected at the City or municipality provided that all collections on the week shall be remitted to the concerned barangays.

DILG-DPWH-DICT-DTI JMC No. 2018-01: Guidelines in Streamlining the Processes for the Issuance of Building Permits and Certificates of Occupancy.”

Sec.6.1.9 In processing the locational clearance, the LCE and the barangays under his/her jurisdiction shall work out an arrangement whereby the city hall officials shall be allowed to collect barangay fees related to building permit and locational clearance applications, which shall be remitted to the concerned barangays at an agreed timetable.

Requirement for Barangay Clearance

1. Locational Clearance (Zoning

Officer)2. New Business Permit

Application (by BPLO)

• New business without

Certificate of Occupancy

• Business with Certificate

of Occupancy for new

structure (no need)

3. Renewal of Business Permit

(by BPLO)

Notify barangay of application and barangay shall provide feedbackOr Require as post requirement

BPLO to provide Barangays with list of business establishment for inspection year round

Barangay to provide the negative or positive list to BPLO before renewal period

Operationalization of Integration

Barangays

• Submit to city/municipality the Barangay Ordinance consolidating all fees and charges related to business and building permits as basis for collection, and allowing city/ municipality to collect

• For new business application• Upon notification by city/municipality, inspect new business,

and approve clearance through the city/municipality in accordance with the processing time set under RA 11032

• For renewal of business application• Conduct year-round inspection and provide negative/positive list

to cities and municipalities before renewal period.• Provide the necessary space and equipment for the representative

of the Barangays in the One-Stop Shop to facilitate the issuance of Barangay clearance (co-location)

Operationalization of IntegrationCity/Municipality

• For new application, notify the barangay for inspection. Barangay approval maybe a pre or post requirement. For renewal, validate with the negative/positive list issued by the barangay

• Include Barangay Clearance Fees accordance with the submitted Barangay Ordinance in the One-time Assessment of fees for Business and Building Permits

• Collect Barangay Clearance fees in the One-time Payment of fees and charges for business/building permits

• Remit the collected Barangay fees on the 7th day of the following month (or agreed timelines) with the list of issued Business and Building Permits

• Provide the necessary space and equipment for the representative of the Barangays in the One-Stop Shop to facilitate the issuance of Barangay clearance (co-location)

Rationalization of Fees and

Charges

Rationale for fees and charges

Regulation of business and activities as well as delivery of

services to the people through local government entail cost to the

government

Equity requires that person/s benefitting from the service to share the cost of providing such services.

If the primary purpose of imposition is generation of revenue and that regulation

is merely incidental

If primary purpose is regulationand the imposition is just to cover the cost of regulation

VS“TAX” ”FEE”

Purpose of Rationalization of Fees and Charges

• Ensure uniform procedure in setting reasonable fees and charges as provided under LGC (RA 7160)

• Set a balance between recovering cost of services and ease of doing business in compliance with EODB Act (RA 11032)

Legal Framework• Philippine Constitution

• grants LGUs with the power to create its own sources of revenues and levy taxes, fees and charges which shall accrue for its sole benefit.

• Local Government Code, RA 7160

Sections 134, 142, 151 & 152

Provinces, cities, municipalities and barangays to impose and collect taxes, fees and charges on business and occupation and on the practice of any profession and calling.

Section 147 Fees and charges imposed by the provinces, cities, municipalities and barangays should be reasonable and commensurate with the cost regulation, inspection, and licensing before any person may engage in such business or occupation, or practice of such profession or calling.

Section 132 Power to impose a tax, fee to charge to generate revenue shall be exercised by the LGU through an appropriate ordinance.

Sections 56 & 57 Local ordinance shall be reviewed by higher local government authoritieswithin 30 days, otherwise such ordinance shall be presumed consistent with law and therefore valid.

Legal Framework

• Ease of Doing Business and Effective Government Service Delivery Act (RA 11032)

Section 5 All proposed legislation of government agencies shall undergo regulatory impact assessment to establish if proposed regulation does not add undue regulatory burden and cost to these agencies and applicants or requesting parties.

Section 21 Imposition of cost not reflected in the Citizen’s Charter constitute a violation and holds persons responsible liable

LGU On-line compliance reporting/monitoring system

thru a google drive

DILG Compliance Audit

on-site review and assessment of process vs standards

Client Satisfaction Survey

Annual Client Satisfaction Survey of DTI and PCCI

Client On-line Feedback after every transaction thru an online App “Rate my LGU Service”

Compliance Monitoring Mechanisms(3 levels)

Rate My Service

• a citizen feedback mechanism is being institutionalized to

provide feedback on

compliance and performance

of LGUs.

• result of the survey shall also

become basis for the grant of awards, recognition and/or incentives.

Can be access 24/7 at url:

Ratemyservice/dilg.gov.ph

Out of 1,516 Cities/Municipalities (except ARMM),

1,484(97.89%) responded in our Online Monitoring

Survey.

Responded, 97.89% Remaining,

2.11%, 2%

On-line Survey on LGU Compliance

Responded Remaining

Monitoring of LGU Compliance

Source:

https://docs.google.com/spreadsheets/d/1rK3209I0rh4ab3OGPCQIMzK4ifczKUPhr0mE9HCzDdA/edit?usp=drive_web

“Compliance with the EODB Act – VARIES for every LGU”

=COMPLIANCELGU

Income Budget Capacity

LGU Compliance to BPLS Standards

96.37%84.96% 87.99% 90.04%

3.63%

15.04% 12.01% 9.96%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Use ofUnifiedForm

No. ofSteps

No. ofSignature

ProcessingTime

New Business Application

Compliant Non-compliant

95.58%86.02% 87.99% 89.45%

4.42%

13.98% 12.01% 10.55%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Use ofUnifiedForm

No. of Steps No. ofSignature

ProcessingTime

Renewal ofBusiness Permit

Compliant Non-compliant

0

20

40

60

80

100

120

140

160

17

77

125

93

130

140

70

107

133 132

143

72

90

49 50

73

16

74

125

86

109 111

60

45

131

85

140

41

80

48

35

65

16

73

125

85

113 112

61

51

131

86

142

43

80

4640

63

Number of LGUs Compliant to All Revised Standardsby Region, CY 2019

Respondent New Renewal

Business Registration and Collection

By Region, CY 2019

Region Business Registration Business Registration Collection

NCR 317,269 ₱ 26,374,843,975.90 CAR 55,485 ₱ 766,355,445.18 REGION I 123,539 ₱ 1,532,459,664.32 REGION II 66,044 ₱ 1,832,306,627.82 REGION III 137,863 ₱ 3,198,788,030.18 REGION IV-A 214,095 ₱ 7,773,513,090.96 MIMAROPA 48,531 ₱ 770,771,081.46 REGION V 35,035 ₱ 603,955,436.84 REGION VI 62,838 ₱ 925,292,900.81 REGION VII 104,237 ₱ 3,049,023,727.81 REGION VIII 47,105 ₱ 662,387,835.06 REGION IX 37,187 ₱ 628,178,119.67 REGION X 86,903 ₱ 2,342,243,897.07 REGION XI 76,507 ₱ 627,541,870.90 REGION XII 87,492 ₱ 1,864,509,844.82 REGION XIII 27,492 ₱ 696,799,523.74

₱ 53,648,971,072.53

Distribution of Business Registration, 2018

317,269

55,485

123,539

66,044

137,863

214,095

48,531

35,035

62,838

104,237

47,105

37,187

86,903

76,507

87,492

27,492

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000

NCR

CAR

REGION I

REGION II

REGION III

REGION IV-A

MIMAROPA

REGION V

REGION VI

REGION VII

REGION VIII

REGION IX

REGION X

REGION XI

REGION XII

REGION XIII

Number of Business Establishment RegisteredBy Region, Cy 2019

Distribution of Business Registration Collection

2018

₱26,374,843,975.90

₱766,355,445.18

₱1,532,459,664.32

₱1,832,306,627.82

₱3,198,788,030.18

₱7,773,513,090.96

₱770,771,081.46

₱603,955,436.84

₱925,292,900.81

₱3,049,023,727.81

₱662,387,835.06

₱628,178,119.67

₱2,342,243,897.07

₱627,541,870.90

₱1,864,509,844.82

₱696,799,523.74

₱- ₱5,000,000,000.00 ₱10,000,000,000.00 ₱15,000,000,000.00 ₱20,000,000,000.00 ₱25,000,000,000.00 ₱30,000,000,000.00

NCR

CAR

REGION I

REGION II

REGION III

REGION IV-A

MIMAROPA

REGION V

REGION VI

REGION VII

REGION VIII

REGION IX

REGION X

REGION XI

REGION XII

REGION XIII

Amount of Collection from Business Taxes, Fees and other chargesBy Region, CY 2019

Other Provisions that need to be addressed

Business permit shall be valid for a period of 1 year.

The city/municipality may have the option to renew

business permits within the 1st month of the year OR on the anniversary date of the issuance of the business

permit. (Sec 11)

Automatic Approval or Automatic Extensions (Sec. 10)If a government office or agency fails to approve or

disapprove an original application or renewal or request

within the prescribed processing time, said application

or request shall be deemed approved/renewed:

Necessary Immediate Actions by LGUs

• Initiate review of existing policies and operations and commence with the reengineering of LGU systems and procedures

• regulatory impact assessment of LGU services and procedures

• evaluation and improvement in LGU transactions, systems and procedures

• Categorize DILG services, and transactions into simple, complex, and highly technical and adjust timelines in the citizen charter accordingly

• Integrate associated permits/clearance of various departments with the Business permits and licenses, and Building Permits and Certificate of Occupancy

• Automation and coordination among the different departments within the LGUs (zoning to building permit, building permit to business permit, all department with collection with Treasurer)

EODB

DILG will continue to guide and aid LGUs to comply with the EODB directives

EODB

Private

SectorLGU