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Philippine Cities Competitiveness Ranking Project 2003: Survey and Validation of Selected Indicators November 2004 Prepared/ Written By: Prof

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Philippine Cities Competitiveness Ranking Project 2003: Survey and Validation of Selected Indicators November 2004 Prepared/ Written By: Prof Project No. 01.2467.7-001.00 Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) COOPERATION Republic of the Philippines Federal Republic of Germany Philippine Cities Competitiveness Ranking Project 2003: Survey and Validation of Selected Indicators November 2004 Prepared/ Written by: Prof. Alvin Diaz, AIM Policy Center Consultant [email protected] Published by: The Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) A DTI-TESDA-GTZ Program 10th Floor, German Development Center, PDCP Bank Centre Building, V.A. Rufino cor. L.P. Leviste Streets, Salcedo Village, Makati City www.smedsep.ph | [email protected] Ms. Martina Vahlhaus, Program Manager Printed on: February 2005 - Makati City, Philippines Philippine Cities Competitiveness Ranking Project 2003: Survey and Validation of Selected Indicators November 2004 FOREWORD The Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) a joint undertaking of the German Government thru the German Technical Cooperation (GTZ) and the Philippine Government thru the Department of Trade and Industry (DTI) and the Technical Education and Skills Development Authority (TESDA) supported the Cities Competitiveness Ranking Project in 2003. Conducted by the Asian Institute of Management (AIM), the PCCRP aims to eventually help Philippine urban centers cultivate competitive industries, promote healthy communities, and maximize the competitiveness potential of Philippine cities. Because it is at the level of local government units (LGUs) where the most basic business environment and regulatory framework is shaped, the SMEDSEP and the AIM jointly conducted a series of Focus Group Discussion (FGD) among eight cities in the program’s pilot provinces in the Visayas focusing on two main drivers of city competitiveness: Cost of Doing Business and Responsiveness of LGUs. The FGD was aimed to validate the results of the 2003 PCCRP among the owners and managers of business establishments of the eight cities, identify the key issues and concerns that affect the growth and dynamism of business in their respective localities, recommend solutions and present the outputs to the mayors for appropriate action. This paper is a compilation of main points which emerged during the FGD in each city located in SMEDSEP’s pilot provinces in the Visayas. The cities covered in this paper are: Bacolod, Cadiz and San Carlos in Negros Occidental, Cebu, Mandaue and Lapu- Lapu in Cebu, and Ormoc and Tacloban in Leyte. It is hoped that this paper will serve as a guide for local executives, the members of the local council, and the private sector to determine which are the concerns that affect businesses in their respective localities the most, and what can be done – from the point of view of the business entrepreneurs - to address such in order to enhance the attractiveness of their cities to spur investments and economic growth. True enough, we are quite happy to report that there have been responsive mayors who readily responded to the concerns and issues brought forth by members of their business community right after the FGDs we conducted between August to November 2004. We, therefore, encourage the local executives of these eight (8) cities to continue working towards more economically progressive LGUs. SMEDSEP & AIM TABLE OF CONTENTS Foreword I. Introduction II. Objectives III. Framework and Methodology Summary of Recommendation and LGU Response FGD Discussion in 8 Visayan Cities Bacolod Cadiz Cebu Lapu-Lapu San Carlos Mandaue Tacloban Ormoc I. INTRODUCTION (See Annex 1: PCCRP Presentation): The Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) is a joint program of the German Technical Cooperation or the Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ), the Philippine Department of Trade and Industry (DTI) and the Technical Education and skills Development Authority (TESD). The program’s goal is to establish favourable business conditions in the Philippines (particularly in the Visayas), thereby harnessing entrepreneurial potential and encouraging competition of SMEs. The program will be measured by the following indicators: • Improved competitiveness of selected cities • increase in SME financing, use of commercial Business Development Services (BDS) as well as trained workforce, • services of associations improved, • regional and local authorities have improved their functions as facilitators. In order to address the above indicators, SMEDSEP’s measures are grouped in four components, namely, 1) Enabling Business Environment/SME Policies and Regulations, 2) Business Development Services, 3) Financial Services, and 4) Demand-Driven Training. This study is in line with the objective of Component 1: Enabling Business Environment which reads “to develop and implement policy proposals for the improvement of the business climate at national, regional and local level (in the Visayas) in cooperation with the private sector”. The achievement of this goal is to be measured by the following indicators: • regular and effective integration of SMEs into decision-making processes by relevant promotion institutions • shorter, simpler and better published approval and licensing procedures for SMEs • better framework conditions from the SME point of view Taking-off from an existing survey instrument to measure the competitiveness of selected cities in the Philippines, the program – in cooperation with the Asian Institute of Management (AIM) - embarked on a series of Focus Group Discussion with entrepreneurs or private sector representatives in eight (8) cities in the Visayas. The Philippine Cities Competitiveness Ranking Project is a “pioneering effort of the City Competitiveness Program of the AIM Policy Center”. Together with other partner institutions, the project aims to “study the capacity and capability of Philippine cities in effective governance, human development and business growth” through scientific methodologies requiring quantitative data from national and local government agencies and qualitative data from survey respondents coming from Small and Medium Enterprises (SMEs). It also analyzes the good practices of other cities in the overall economic management of LGUs. The policy objective of the PCCRP is to encourage local government leaders to understand that their roles must shift from being mere providers of public goods and services to becoming economic and development managers. The study hopes to encourage local government executives, businessmen and other stakeholders to consider the PCCRP results in their policy-making, capacity-building and urban development planning. The 2003 PCCRP study covered 50 cities nationwide which included 23 cities in Luzon, 11 cities in the Visayas and 16 cities in Mindanao. The cities were categorized into metro, mid-sized and small cities. II. OBJECTIVES The AIM Policy Center-GTZ project endeavors to foster competitiveness through the establishment of priority action agenda for the LGU’s consideration and implementation. The set of recommendations aims to improve the business environment for SMEs in the eight (8) pilot cities of GTZ (Region VI: Bacolod, Cadiz, San Carlos; Region VII: Cebu, Lapu-Lapu, Mandaue; Region VIII: Tacloban and Ormoc) III. FRAMEWORK and METHODOLOGY (See Annex 2: SMEDSEP Presentation): The objectives of the AIM Policy Center-GTZ project would be achieved through further validation of the selected drivers. Validation would be done through: Development of a tool guide with guide questions revolving around the selected drivers and indicators. (See Annex 3: Tool Guide). Focus Group Discussion (FGD) divided into two parts: in-depth (Responsiveness of LGU, dynamism of local economy, and cost of doing business) and information gathering (Linkages and accessibility, human resources and training) – all within the competitiveness and SMEDSEP framework. Meeting with the LGU representatives Visit to City Hall to gather other pertinent documents e.g., Application for Business Permit and license The FGD would have three main components, namely: 1. Discussion of selected indicators from the 2003 PCCRP with SMEs 2. Prioritization of recommendations to improve business environment 3. Presentation/discussion of recommendations with the LGU. The criteria for the prioritization of recommended actions include: 1. Overall impact and benefit – this would cover outreach, resource savings, better participation, among others. 2. Feasibility/Doability – this would include cost, time, commitment, clear responsibility, etc). After the presentation and discussion of measures with LGU, the LGU may give its reactions/replies. SUMMARY OF RECOMMENDATION AND LGU RESPONSE CITY PROPOSED ACTION IMPACT RESPONSE OF LGU BACOLOD CITY Establishment of Bacolod City Sustainable Employment Program, Would need resources to set up the Development and Investment and revenue generation for SMEs Center. Local Investment Board to Promotion Center with focus on and LGU, streamlined bureaucratic partner with the Provincial tourism sector process. government re tourism. Enforcement of existing ordinances Improved quality of life for the Need to do baseline study re: ideal such as clearing of sidewalks, residents, orderly conduct of length of time for an investor to set management of traffic, provision of business, increased attractiveness of up business in the city (best practice avenues for livelihood for vendors (e.g. local business environment, or standards). night
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