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Follow-Up Activities on the Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc Version for DTI SME Week | July 2006

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Follow-Up Activities on the Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc Version for DTI SME Week | July 2006 Follow-up Activities on the Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc Version for DTI SME Week | July 2006 Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) Prepared/written by: Deanna R. Lijauco and Aurma M. Manlangit [email protected], [email protected] Consultants Published by: The Small and Medium Enterprise Development for Sustainable Employment Program (www.smedsep.ph) 10th Floor, German Development Center PDCP Bank Center Building, V.A. Rufino cor. L.P. Leviste Streets Salcedo Village, Makati City, Philippines Ms. Martina Vahlhaus, Program Manager [email protected] Printed on: July 2006 Follow-up Activities on the Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc Pre-Final Version for DTI SME Week | July 2006 Table of Contents Foreword ....................................................................................................................................... 5 List of Acronyms............................................................................................................................ 6 Executive Summary ...................................................................................................................... 7 Background and Rationale of the Study ................................................................................... 8 Summary of Interventions ......................................................................................................... 9 Technical Assistance............................................................................................................ 9 Monitoring of Plans............................................................................................................. 10 Evaluation of BPLS 2006 ........................................................................................................ 11 Presentation of Results....................................................................................................... 12 Synthesis of Findings.......................................................................................................... 15 Conclusion and Recommendations ........................................................................................ 19 Procedural Recommendations ........................................................................................... 20 Policy Reform Recommendations ...................................................................................... 21 Organizational Reform Recommendations......................................................................... 22 Continuous Service Quality Improvement .......................................................................... 22 Annexes....................................................................................................................................... 23 Annex 1 - Bacolod Action Plan ............................................................................................... 24 Annex 2 - Ormoc City Action Plan .......................................................................................... 27 Annex 3 - Ormoc Business Forum & Customer Training Program......................................... 30 Annex 4 - Time and Motion Instrument................................................................................... 32 Annex 5 - Customer Satisfaction Survey ................................................................................ 34 Annex 6 - Bacolod City’s Business Licensing Procedures ..................................................... 35 Background......................................................................................................................... 35 Methodology ....................................................................................................................... 35 Findings .............................................................................................................................. 37 Discussion and Analysis of Findings .................................................................................. 54 Conclusion and Recommendations.................................................................................... 58 Pictures............................................................................................................................... 65 Annex 7 - Ormoc City’s Business Licensing Procedures........................................................ 80 Background......................................................................................................................... 80 Methodology ....................................................................................................................... 80 Findings .............................................................................................................................. 83 Discussion and Analysis of Findings .................................................................................. 97 Conclusion and Recommendations.................................................................................. 100 Pictures............................................................................................................................. 102 Annex 8 - LGU Quality Service Improvement Tool............................................................... 106 LGU Quality Service Improvement Tool........................................................................... 109 Annex 9 - Toward Financial Stability: The Quezon City Experience .................................... 112 4 Foreword Several studies from multilateral organizations (like World Bank and Asian Development Bank) and academic institutions (like Asian Institute of Management) have indicated that complicated and time-consuming business registration is an inhibiting factor in shaping an enabling environment for business and investments. The burden falls in particular on Small and Medium Enterprises (SMEs) because of their limited resources. Recognizing that the simplification of rules, regulations and registration requirements is one of the key areas for reform, the national government has issued directives along this line. The Office of the President signed Memorandum Order No. 117 on September 15, 2003 and Executive Order 423 on May 18, 2005. On the other hand, a bill has been filed at the House of Representatives titled “Anti-Red Tape Act of 2006”. In line with the above, a simplified business permit and licensing system (BPLS) was designed and pilot-tested in two cities in the Visayas. The local governments of Bacolod City and Ormoc City now wish to share their success stories with the other LGUs so that the replication of simplified BPLS will create a multiplier effect, will be up-scaled and mainstreamed at the national level. This will ultimately redound to the benefit of the SMEs which account for more than 95% of all enterprises in the country. We thank all organizations and individuals who in one way or another have helped in completing this study. May this study inspire other LGUs and the entire government bureaucracy that reforming the service delivery is not too difficult to achieve! USec. Zorayda Amelia Alonzo USec. Carissa Cruz DTI DTI Hon. Mayor Evelio Leonardia Hon. Mayor Eric Codilla Bacolod City Ormoc City Ms. Martina Vahlhaus GTZ - Manager SMEDSEP Program 5 List of Acronyms BIR Bureau of Internal Revenues BOSS Business One-Stop Shop BPLO Business Permits and Licensing Office BPLS Business Permits and Licensing System CHO City Health Office CMD -Permits City Mayor’s Department- Permits CPDO City Planning and Development Office CTC Community Tax Certificate CTO City Treasurer’s Office CVO City Veterinarian’s Office DILG Department of Interior and Local Government DTI Department of Trade and Industry GTZ Deutsche Gesellschaft für Technische Zusammenarbeit IRA Internal Revenue Allotment Information Technology LCE Local Chief Executive LGUs Local Government Units MOA Memorandum of Agreement NEDA National Economic Development Authority NGAs National Government Agencies OBO Occupation Building Office Pag-Ibig Fund National Home Mortgage Corporation PhilHeath Philippine Health Insurance PLD Permits and Licensing Division RDC/TWG Regional Development Council/Technical Working Group SP Sangguniang Panlalawigan SEA South East Asian SME small and medium scale enterprises SMEDSEP Small and Medium Enterprise Development for Sustainable Employment Program SMED Council Small and Medium Enterprise Development Council SSS Social Security System TESDA Technical Education and Skills Development Authority TIN Tax Identification Number 6 Executive Summary In August 2005, the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH commissioned the study entitled: “Follow-Up Activities on the Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc. ”This report is the result of the study undertaken by the group of consultants commissioned by the GTZ from 1 September 2005 to 30 May 2006. The study was the result of both the technical assistance and research efforts of the consultants commissioned to assist the local government units (LGUs) of the two cities. In January 2005, the consultants had conducted a time and motion study analyzing the two cities’ business permits and licensing (BPL) procedures. The study revealed that in both cities the processing and issuances of
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