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DAVAO
CITY—Property developers crafting new blueprints or
setting sites on new areas on which to carve out
commercial or housing enclaves would do well to check
out the recent study of the International Finance Corp.
(IFC), a member of the World Bank Group. The study found
several Philippine cities loaded with their own local
requirements to lengthen the process, and making it
costly, to do business in any of the metropolitan
cities. At least, cities like Manila, Marikina and
Taguig, all contained in the Metro Manila area, have
only four requirements atop the 11 items required by
national government agencies, making them competitive
with many national capital cities in 178 countries under
the IFC study.
But
others have more requirements, with Davao City adding 12
more to the national requirements, putting it in the
last spot among the 21 metropolitan cities that the IFC
studied under the “Doing Business Philippines 2008.”
The
study was actually an extension of the global study of
178 countries to look at how the country’s metropolises
fared with the performance of the national capitals of
these countries.
Many of
the local requirements include the locational
clearances, which figured out in both the national and
local levels, with the city and the barangay also
imposing their separate licenses. Also, procedures may
be found in some, like securing a fire clearance
certificate, which the other cities did not require.
Davao
City, the most competitive city in a separate 2007
Philippine Cities Competitive Ranking Project of the
Asian Institute of Management (AIM), however, was the
city with the most number of procedures, at 23,
including the 11 national requirements, to start a
business.
Closely
trailing Davao with their 22 procedures were Pasig,
Tanauan and Valenzuela, and San Juan with 21.
Eleven
cities—Tanauan, Mandaluyong, Malabon, Caloocan,
Muntinlupa, San Juan, Parañaque, Cebu, Lapu-Lapu, Pasig
and Mandaue—also have between 29 and 33 procedures to
deal with business licenses. But even the more efficient
upper half have also as many as 23 to 28 procedures to
comply.
These
licenses include those required before constructing a
warehouse, for instance, which often comprised slightly
more than one-third to more than 40 percent of the
entire process, including the licenses during and after
the construction phase.
Though
Davao City has the most number of procedures to start a
business, it posted the second shortest period to beat
the grind at getting the licenses, at 60 days, behind
only Tanauan of Batangas.
Only
three other cities—Mandaue, Cebu and Lapu-Lapu—take less
than 100 days to acquire the licenses. The rest, all of
Metro Manila, would need at least 121 days to Manila’s
203, the longest, to get them.
The
country’s capital also would take longest to start a
business, at 52 days, compared with Taguig’s 27 days.
Only Marikina, Caloocan and Mandaluyong were the other
cities that would take less than a month to start a new
business after complying with the requirements.
The
rest, all 17 cities, would take between 31 and 52 days
to start a new business. This is compared with only five
days to the global leader, Singapore. But even the
sluggard, Manila would fare better than the average
performance of Asean capitals, which would take 69 days
to start a new business.
And
while the Philippines was often criticized for its cost
of doing business, only one city, Las Piñas, turned out
to be actually higher than the average Asean cost of
doing business, measured through percentage of the
income per capita.
A new
business applicant would have to spend 45 percent of a
per capita income in Las Piñas, compared with the Asean
average of 40.9 percent. The cheapest was in Lapu-Lapu
City, at only 17 percent, Tanauan at 18 percent and
Davao City at 21 percent, to as high as 35 percent in
Pasay, 36 percent in Caloocan and 37 percent in Makati.
The
cheapest in Asia is in Singapore, where a new business
owner would only spend 0.8 percent of the per capita
income to comply with business requirements.
Sixteen
cities, all in Metro Manila, were within the competitive
average of Asean capitals in terms of shelling out money
to deal with licenses, also measured in terms of
percentage of income per capita.
The
Asean average was pegged at 118 percent, and Manila was
the cheapest at only 102 percent, to Malabon’s 146
percent.
Davao, Cebu,
Mandaue and Lapu-Lapu were several notches higher, at
between 465 percent and 558 percent, to defray the
expenses. Tanauan was highest at 1,072 percent.
New
talks, reoiling branches
The IFC
said that government agencies have opened themselves up
to new discussion to collapse more procedural
requirements and to retool their branches to further
reduce the number of procedures and cut time and costs
to do business.
The
Philippine Business Registry, an online one-stop shop to
start doing business that was supposedly launched last
week, would promise to do just that, to compress the 11
requirements to only four.
In the
level of the cities, at least the Department of the
Interior and Local Government (DILG), which handles the
various local leagues of local governments, and the
Department of Trade and Industry (DTI) have begun
meeting to discuss ways of harmonizing some national
requirements in starting a business with those also
required at the local government units.
Gerlin
May Catangui, IFC associate operations officer, who gave
the briefing here to media and selected government and
private-sector representatives, said that the DILG and
the DTI would like to find some ways to harmonize or
reconcile some of the requirements that appear to be
similar but were being imposed both by the national
government agency and the city government, or including
the barangay.
In the
case of locational clearance for instance, it was being
required by the City Planning and Development Office in
Davao City; but the barangay would also demand such
clearance from locators, too.
Catangui
said the DILG may also consult with the different
leagues, including the League of Cities or the League of
Municipalities, regarding the long transaction period at
the Office of the Building Officer. In the case of Davao
City, it would take about 18 days to wait before the
building permit would be issued, and another one day
would be devoted for inspection.
She
said, though, that Davao City was not alone in this
dilemma, which is shared by all the cities nationwide.
“This would be one of the areas of concern that the DILG
and the DTI will discuss. The DILG would also take this
up with the leagues,” she said.
Last
week also, Catangui said the operations chief of the
Social Security System (SSS) promised to look again into
the operation of its branches after finding out why
some localities have complained that the supposed
one-day transaction in its office has stretched to
between two and seven days.
She said
the IFC met with the SSS directors in a national
gathering to get the briefing of the IFC study and
reacted at the report of why it took that long to move
the transaction at the SSS. “They thought that it was
clear that the requirement among businesses to register
themselves with the agency would only take one day.”
“The SSS
management has promised that it would now require its
offices in the regions not to ask the applicants to
return the following day, and instead to finish the
transaction in one day,” Catangui said.
Good
practices outside the capital
Catangui
said the results of the study, made public in May,
“should provide a very good diagnostic tool for local
governments and their planners to create their baseline
data, allow them to compare with global performance and
to determine what reforms they have taken over time.”
She
stressed, “It’s not about rankings; it’s about the
reforms that we are taking that would matter most.”
Some
cities have surprised even the IFC for their
innovations, and positioning themselves in even some
areas like easing the process for the business
applicants. “In Marikina and Taguig, they would only
require four local requirements to let the application
be approved immediately.”
This
placed the two cities on the list of top six spots in
global competitiveness.
Taguig,
as another instance, would only allow the business
applicant to have a single interface in the entire
application. “The applicant would only face one person,
a city official, who would be the one to go around and
complete the requirements while the applicant just
waits.”
Catangui
said Taguig has assigned a liaison officer to do that.
Although
the city government has protested the methods in the
conduct of the study, Roberto Teo, chief of the City
Investment and Promotion Office, said, “we will take off
from some of the findings” in the study.
“We
already plan to implement what Taguig did; it’s only now
that we know it’s being implemented,” Teo said. “We
don’t have to hire more personnel; we’ll just ask all
the personnel of the business bureau to assume that
role.”
Taking
off from the IFC study, he said he has already
recommended to the city mayor “to revisit the local tax
code and to determine whether we can reduce them, or if
the local government really needed the money.”
They
also recommended “that we look into how we can reduce
further the number of steps; the less and fewer steps,
the better to reduce corruption.” |
