How to ease doing business with local governments

For the first three weeks of the year, the municipal hall in Virac is crowded with people clutching folders or brown envelopes filled with documents.

Most of them are either small business owners or representatives of commercial establishments, construction firms and other business entities, all trying to beat the usual deadline of Jan. 20 for the renewal of their Mayor’s Permit to Operate.

Some, like the contractors and suppliers of government agencies, are doing their best to have their 2021 permits renewed as early as possible, in case any of their usual clients schedule a bidding this early in the year.

In this situation some worried bidders of the Department of Public Works and Highways (DPWH) found themselves last week: they were poised to be disqualified by the Bids and Awards Committee (BAC) for submitting expired Mayor’s permits as their renewals were still pending at similarly crowded municipal halls.

A circular issued late last month by the Department of the Interior and Local Government (DILG) enjoins local government units to streamline their systems and procedures on business and non-business-related services.

Crafted in compliance to the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 or Republic Act 11032 and its Implementing Rules and Regulations, the circular urges all local chief executives to adopt prescribed categorization and processing time for said services and transactions.

Under the new processing times, the application for a new business permit, categorized as a simple transaction, should have a maximum processing time of two (2) days, provided all requirements are submitted.

The Business Permit and Licensing Office (BPLO) of each LGU is allowed only one day to process the renewal of a business permit, along with other similarly simple transactions.

LGUs must review their current processes, undertake cost compliance analysis, conduct time and motion studies, and ensure that the flow is compliant with the documentary requirements, prescribed steps, and adoption of the Zero Contact policy, the circular states.

“Pursuant to Sec. 9(b) of RA 11032, an application or request for issuance of license, clearance, permit, certification or authorization or other documents shall be deemed approved if the LGU fails to approve or disapprove said application or request within the prescribed processing time, provided that all requirements have been submitted and all fees and charges have been paid,” Sec. Año reminded.

Whether the circular’s categorization and processing times has already been implemented by the municipalities in Catanduanes is still to be determined. But judging from the predicament of the local contractors, the old, tedious and slow process of approving business permit renewals is still being followed at the island’s center of trade and commerce.

Surely, any municipality has the capability to adjust to the demands of RA 11032, provided the local chief executive does not hold hostage or withhold his signature on the permit of a business owner who is in the opposite political camp.

But the LGU, Virac more especially, should beef up its BPLO staff to handle the increased pace of processing. In the capital town, that office is manned by only three personnel, which is too few considering that there are now more than 2,000 business owners all desirous to get their permits before the deadline.

A time and motion study, as the DILG suggests the local governments undertake, would undoubtedly show that for the BPLO to be able to renew 2,000 business permits in the 13 working days this January, its personnel would have to process and approve an average of 154 per day.

Quite an impossibility, one could say, given the demands such a backbreaking work would exact on the undermanned staff.

The national government, through the DILG, should instead consider allowing some leeway to LGUs, many of which are disallowed from creating new positions in the BPLO owing to their having reached their budgetary ceiling for personnel expenses.

As one Metro Manila LGU has done a few years back, inspection of business premises by the BPLO, zoning and building officials, and the Bureau of Fire Protection (BFP) was scheduled on the monthly basis depending on the last digit of their mayor’s permit number.

Thus, any inconsistency with data submitted by the business owner during the renewal process would be considered in computing any additional liability to the government.

Perhaps, even Congress would consider amending the Local Government Code provision on the mandatory renewal of business permits during the first 20 days of the year and instead spread it out in the 12 months, just like how vehicle registrations are renewed.

Anything to lighten the burden of business owners is welcome.

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