Computerization alone will not do the trick

Various agencies of the Executive branch are rushing to streamline local government units’ capabilities to shorten the time needed to issue business permits and licenses, obviously in a bid to fulfill one of the many promises of President Rody Duterte during his inaugural State of the Nation Address.

The big focus, it seems, is to come up with a standard form that can be inputted into a data bank, preferably computer-based, initially for the barangay and the city or municipal government, and eventually linked to national agencies like the Bureau of Internal Revenue, Social Security System, and specialized arms like the Department of Environment and Natural Resources.

The problem with renewing a business permit in the Philippines, more so with enrolling a new business, is so much more complex that computerization alone cannot fix it. And it is not just banning fixers at the LGU offices or having civil servants at their desks during office hours.

Hopefully, the team the president formed realizes this.

Swamped with requirements

Just looking at the list of requirements needed to get a local business permit (or more properly called a Mayor’s Permit) is enough to make a less resolute business entity give up.

The list of requirements starts with getting a barangay clearance, followed by a building permit from the engineering office (if a facility or building is to be constructed), a contract of lease (if business place is rented) or proof of ownership if owned, occupational permit of employees, locational clearance, certificate of electrical employment, safety inspection certificate, fire safety inspection certificate, health certificate for all employees, and a sanitary permit.

If a business will put up its own building (or even renovate one that it is renting), there’s another set of permits needed, such as electrical, plumbing or sanitary, excavation and mechanical based on the building plan.

Of course, there are other requirements that need to be complied with before getting your Mayor’s Permit, and these involve their own level of challenges starting at the Department of Trade and Industry, the Securities and Exchange Commission, and the Bureau of Internal Revenue.

No wonder that the Philippines is ranked among the cellar dwellers in the world businesses’ competitiveness list.

Conflicting requirements and duplication processes

On top of the dizzying list of to-dos, there are apparent conflicts between the objectives of the national laws versus the implementing rules and regulations issued by the national and local agencies and local government units. Talk about too many cooks spoiling the broth.

Case in point here is the Barangay Micro Business Enterprise (BMBE) Law. While the Department of Finance has apparent conflicting issuances with regards the law, LGUs and other government agencies are lukewarm to providing the mandated incentives of small entrepreneurs because it means lower revenue collections.

There are also several duplications that could be eliminated, specifically (as in the list above) when it comes to matters concerning employees, health and sanitation, and safety – even within the LGU itself. A case in point involves fire and safety, which need two certificates (and separate fees).

National agencies like the BIR, Social Security System (SSS), PhilHealth, etc. also have their own regulatory requirements that not just increase the number of steps involved, but also add on to the amount of fees, again, to be paid at the local level.

In other instances, national agencies are using the LGUs to implement their requirements, thus adding more items to a businesses’ renewal or registration list. Case in point is when the Local Government Code (LGC) made it illegal for LGUs to issue business permits unless there is an SSS clearance.

Standardization and inflexibilities

There is a need for standards or minimum requirements in securing business licenses in different LGUs, especially in reconciling the many unique and conflicting local government requirements for getting business permits.

The thrust for standardization will need a strong hand since many national rules and regulations, as well as local ordinances need to be removed to be able to come up with a standard list.

The LGC has also contributed its own impediments to standardization and streamlining, and the biggest hurdle has been in the imposed period for renewal, which is in January of every year. This has translated to long queues, especially going towards the end of the month.

Streamlining first and foremost

Obviously, even before there can be a desired full computerization of government services with regards the issuance of business permits and licenses, Duterte’s bright boys must look at removing the duplications and unnecessary requirements.

The concept of a one stop shop had been recommended years back, but these has not been maximized in many LGUs despite many successful models in cities like Muntinlupa, Marikina, Cebu, and Iligan.

Needless to say, many LGUs still operate business permit issuances manually, mostly because of the lack of political will to modernize and computerize even their local databases. There is no excuse now not to upgrade their IT capabilities, what with the many successful programs funded by international agencies, and at affordable costs of just about P200,000.

Definitely, the LGC must be amended so that business renewals may be done year round, much like what the Land Transportation Commission imposes for the registration of vehicles according to the end plate number and the renewal of driver’s licenses based on the birth month.

Strong will

Most importantly, there must be political will to bring together all concerned national and local agencies, and the many LGUs in the country to sort out the requirements that are really needed for businesses to operate, not just for first-timers, but more so for those simply renewing.

A review of the Business One Stop Shop (BOSS) would also be timely to ensure that small businesses would really get the support needed for them to get stronger in the midst of more mature competitors, even if just for the first five years.

Coming up with standard e-forms for business registration may seem novel, but without the needed structural reforms mentioned above, this manifestation of computerization will certainly not do the trick.

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