improvement and documentation of business licensing ... phils business... · improvement and...

Project No. 01.2467.7-001.00

Small and Medium Enterprise Development for

Sustainable Employment Program

(SMEDSEP)

Improvement and Documentation of

Business Licensing Procedures in the

Cities of Bacolod and Ormoc

April 2005

COOPERATION

Federal Republicof

Germany

Republic of the Philippines

Prepared Written by:

Consultants

Published by:

A DTI-TESDA-GTZ Program10th Floor, German Development Center,PDCP Bank Centre Building, V.A. Rufino cor. L.P. Leviste Streets,Salcedo Village, Makati City

|Ms. Martina Vahlhaus, Program Manager

Printed on:

/Deanna R. Lijauco and Aurma M. Manlangit

The Small and Medium Enterprise Development forSustainable Employment Program (SMEDSEP)

April 2005 - Makati City, Philippines

|[email protected] [email protected]

[email protected]

Small and Medium Enterprise Development for Sustainable

Employment Program (SMEDSEP)

Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc

April 14, 2005 Final Report

SMEDSEP Time and Motion Study

TABLE OF CONTENTS

List of Acronyms

I. Synthesis Report

1. Executive Summary………………………………………………… 1 2. Background…………………………………………………………… 2 3. Objectives……………………………………………………………... 3 4. Methodology………………………………………………………….. 4 5. Synthesis of Findings - Bacolod and Ormoc Cities………….. 8 6. Conclusion and Recommendations……………………………… 12

II. City Reports

A. Bacolod Business Licensing Findings and Recommendations

List of Acronyms

1. Background 2. Methodology and Narrative of Field Research Activities 3. Economic Profile of Bacolod City 4. Business Licensing Standard Operating Procedures 5. Observed and Documented Business Licensing in Bacolod City 6. Assessment of Overall Management 7. Recommendations

Attachments Appendices

B. Ormoc Business Licensing Findings and Recommendations List of Acronyms

1. Background 2. Methodology and Narrative of Field Research Activities 3. Economic Profile of Ormoc City 4. Business Licensing Standard Operating Procedures 5. Observed and Documented Business Licensing in Ormoc City 6. Assessment of Overall Management 7. Recommendations

Attachments Appendices

I. Synthesis Report

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Executive Summary In January 17, 2005, the Deutsche Gesellshaft Fur Technische Zusammenarbeit (GTZ) commissioned this study entitled: Improvement and Documentation of Business Licensing Procedures in the Cities of Bacolod and Ormoc as part of its Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP). This report is the result of the study undertaken by the group of consultants commissioned by the GTZ from January 17- March 1, 2005. The improvement and documentation of business licensing procedures in the two selected cities primarily used the time and motion study as the major approach in data gathering. The time and motion study was conducted from January 19-29, 2005 for Bacolod City and January 20- February 21, 2005 for Ormoc City. To supplement the information gathered from this approach, individual as well as group interviews were conducted to get qualitative information on customer satisfaction and feedback. These were conducted in between the time and motion study period for Ormoc and Baclod cities. Validation workshops with selected small and medium scale enterprises in Ormoc and Bacolod cities were also conducted after the preliminary gathering of information to determine the accuracy of the information gathered and the validity of the initial findings. These were conducted together with a GTZ representative and the Department of Trade and Industry (DTI) key officers in Bacolod and Ormoc Cities on February 14 and 15, 2005, respectively. For Bacolod City, a total of 14 applications were tracked and observed during the study period. Around 20 people composed of the Bacolod City business licensing one stop shop frontliners and officials and around 14 clients were interviewed. Twenty representatives of small and medium scale enterprises participated in the validation workshop held in February 15, 2005. For Ormoc City, a total of 19 applications were tracked during the study period. Around 15 people composed of Ormoc City employees and officials and clients were interviewed. Fifteen representatives of small and medium scale enterprises participated in the validation workshop held in February 14, 2005. A major limitation of the study was the exactness of the time and motion observations in Ormoc City. The study was conducted after the registration period and thus the actual time and motion study on the business one stop shop (BOSS) initiated in Ormoc was not observed. The data that were generated was limited to the actual time and motion after the registration that is without the BOSS facility. Based on the data obtained from the time and motion study done in Bacolod City, there are 21 steps needed to complete a cycle of business licensing, which is inconsistent with Bacolod’s nine (9) step BOSS standard. The applicants used around 19 forms and at least 25 signatures are required for clearance. It takes 9-15.8 working days to acquire a business license in Bacolod City. Based on the data obtained from the time and motion study done in Ormoc City, there are at least 14 steps renewing business registrants and 17 steps for new business applicants


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needed to complete a cycle of business licensing, which is inconsistent with Ormoc’s five (5) linear step BOSS standard for both applicants. It takes 2-17 working days to acquire a business license in Ormoc City. The city reports present in detail the findings and initial process recommendations. This synthesis report presents the initial policy and procedural recommendations for both cities.


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1. Background The Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) of the GTZ, in partnership with the Department of Trade and Industry (DTI) and the Technical Education and Skills Development Authority (TESDA), aims to establish favorable business condition in the Philippines. A major component of the program, Enabling Business Environment, intends to develop and implement policy proposals for the improvement of the business climate at the national, regional and local levels in cooperation with the private sector.

Toward this end, the SMEDSEP conducted series of focused group discussions to have an initial assessment of the needs of the intended partners. A crucial area identified by the business community is in the business licensing procedures of the local government units (LGUs). The private sector aired the need for LGUs to improve their business registration and licensing procedures in order to promote a much better business environment. Initial discussions with the Department of Interior and Local Government (DILG) and the League of Cities of the Philippines (LCP) confirm the need for improvements along this area. One of the measures to enable the LGUs to improve their business registration and licensing procedures is to help the LGUs to streamline the processes and procedures to make these more efficient and customer friendly. While some LGUs have started to do so through the establishment of business one stop shops, many LGUs see the need but are unable to do so because of lack of capacity and experience along this area. Some of those who already initiated business one stop shops, however failed to take a look at the effect of the improvement to their intended clients, particularly the customers’ satisfaction. This study intends to assist LGUs in the improvement of their business licensing and procedures by (1) conducting an assessment of two selected cities’ business licensing procedures through a time and motion study that will also reflect customers satisfaction; (2) recommending ways of improving the current licensing procedures to achieve client satisfaction; and (3) present the lessons learned to selected LGUs to encourage similar streamlining and systems improvement efforts.

II. Objectives To describe how key administrative simplification and burden reduction policies at the LGU level have been developed, implemented and performed and how these improvements have achieved the outcome with the end view of disseminating these information with other LGUs. The study seeks to answer the question: what is the most efficient and effective business licensing procedure at the LGU level needed for businesses to renew or acquire new business permits and licenses. The study will identify the steps required to complete the


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process through time and motion study and from the recorded information recommend ways of improvement. The study also intends to determine the clients’ feedback to the actual procedures and their perception on the LGU’s service performance on this area. III. Methodology The study primarily used time and motion approach, which involves the recording of actual time and motion of respondents during the business-licensing period to collect quantitative data. This also involves in-depth interview, both individual and group interviews, to get quantitative and qualitative data from respondents that have applied for new or renewal of permits prior to the date of research. Information on clients’ feedback and opinions on the business licensing process and procedures were also noted through validation workshops and focused group discussions (FGDs). Activities . Pre-fieldwork activities: On January 11, 2005, the two consultants met with the two senior field researchers to orient them about the project. The consultants provided the senior researchers with initial information on the project terms of reference and the scope of their work was also presented and agreed upon. This preparatory meeting was conducted while the group is still waiting for the final approval of GTZ to commission the study to the consulting group. On January17, two days after the approval of the project proposal and signing of the contract, the group conducted a detailed planning, focusing on fieldwork preparations and conduct, based on a draft research design (see Annexes 1-4 for detailed research design instruments). Selection criteria and draft guides/tools (as contained in the research design submitted to GTZ) were presented to the SRs for their use in the actual field work. The SRs were advised to get in touch with the contacts referred to by the GTZ prior to their visit, which was scheduled on January 19, 2005. Actual Fieldwork:

a. Selection of Respondents The selection criteria focused mainly on new business applying for business licenses and old businesses renewing their licenses. However, the following criteria indicated in the research design were kept in mind in selecting the respondents to be studied and used as benchmarks.1

By type of application (Primary)

1 LCP, LMP, DILG. Kaakbay Framework for Identifying Exemplary LGU Practices for Replication


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The time and motion study recorded the procedures undertaken by both new and old (for renewal) applicants. The study determined whether there is variation in the steps and requirements between the old and the new applicants, the reasons for such variation and the effect and feedback of clients on such variations.

By business size

The study attempted to determine time and motion variations according to business size. This was further disaggregated by nature of businesses of both the new and old (for renewal) applicants.

By kind of applicant

The study determined variations in time and motion of both owner of businesses and their substitutes/agents. This attempted to show if preferential treatment is applied.

By service provider

The study determined variation patterns in time and motion per service provider. It looked into differences in individual service providers’ efficiency or effectiveness and the effects of his/her actions in the business licensing process.

b. Time and Motion Study The senior researchers were fielded in the area from January 19-February 21, 2005 to conduct the actual time and motion study using participant observation and process documentation. The senior researcher fielded to Bacolod arrived at a time when the business licensing period has ended but was extended until January 31, 2005. Thus the senior researcher, with the help of field data gatherer, was able to get actual time and motion observations and documentation of the existing BOSS of Bacolod City. The senior researcher in Ormoc City also arrived a time when the business licensing period has ended but unfortunately no extension was granted. Thus, the researcher failed to get actual observation and documentation of the BOSS set up by the Ormoc City. The senior researcher obtained information of the BOSS time and motion through secondary data (from city record) and from validation workshop and focused group discussions. He continued to observe and document the time and motion after the business-licensing period, when the BOSS was already dismantled. This period, the business licensing with penalties period, is set to end on March 20, 2005.


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The senior researchers hired field data researchers within the locality to help them track the clients. The time and motion study was not limited to the “standard” procedures as applied in the cities but also looked at those that are non-procedural actions that affect the provision of timely services to the clients. Annex 1 shows the instrument used in recording the time and motion of the applicants.

c. Interviews Interviews, whether focused or individual, were also used to determine client feedback and satisfaction of the service provided by the LGU in the area of business licensing. In Bacolod, key informants include 11 City officials (4 PLD officials, 1 CTO officer, 1 CPDO officer, 1 BTA officer, 1Bacolod Police officer, 1 City Health official, 1 PIA official and an official from CMO), 14 business enterprises (these were the 14 sample applicants) and 3 accounting offices. The key questions asked were on preparations for the BOSS, challenges and problems in business licensing, Standard Operation Procedures (SOPs) and guidelines pertaining to business licensing observed at their respective offices and their willingness and capacity to improve/ streamline the business licensing process were answered by the City officials. Comments and suggestions were also solicited based on their assessment on the current business licensing process. In Ormoc City, focused group discussions using the guide shown in Annex 2 were conducted among business entrepreneurs and their representative besides the individual interviews conducted during the observation period. Annex 3 shows the minutes of an FGD conducted in Ormoc City.

d. Gathering of Secondary Materials Annex 4 shows the list of secondary documents/data acquired to serve as additional source of information for the study. Specific lists of secondary data per city are presented in the city reports.

e. Data Analysis One week after the fieldwork, the senior researchers prepared their detailed fieldwork notes and presented them to the consultants for initial review and analysis. The analytical framework and tools used was the Total Quality Management framework specifically continuous work improvement and streamlining and the Pareto Analysis. (See Sample Analysis Table in Annex 5.)

e. Validation of Results On February 14 and 15 the group conducted the validation workshops in Ormoc and Bacolod cities respectively. The initial findings of the studies were presented


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in transparencies using overhead projector to selected business clients for validation. (Although powerpoint presentations were prepared for the purpose, these were not used because there is no available LCD in the area). The purpose of this validation is to check the validity of data and findings, get additional inputs to improve the findings and recommendations, and to obtain the permission of the respondents to present the findings to the LGU officials.

In Bacolod City, around 20 SME representatives responded to the invitation of DTI to participate in the workshop. The validation workshop started with DTI’s welcome remarks and a short round of introductions of the participants. Ms. Jean Roxas presented the SMEDSEP project and why the improvement and documentation of business licensing of Bacolod City is important. Ms. Joy Aceron then presented the findings of the research. An open forum followed asking the participants whether the findings were accurate. The participants were then divided into three groups. The first group, composed of people who were actually involved in business licensing during the business license renewal period was provided with a two paged list of BOSS steps, with the time and motion indicated per step. The group was asked to review the chronology of the steps as presented, the time and motion per step and to circle which of the information listed differ from their own experience. They were then asked to list down the exact time and motion per step based on their experience. The other two groups were composed of SME owners or representatives who were not actually involved in the actual business licensing renewal/application but had second hand knowledge on the business licensing process and procedures as foretold by their employees/bookkeepers. The discussion focused on identification of procedural problems and recommendations to improve the process. For Ormoc, about 15 participants responded to the invitation made by the DTI and followed up by the Senior Researcher at Roy’s Place, Ormoc. The validation activity started with the opening remarks of the DTI Regional Director, then a brief orientation of the project by Ms. Jean Roxas of the SMEDSEP project and the link with the time and motion study being conducted by the contracted investigators. The team leader was around to facilitate the process and provide some orientation to the activity. The initial findings of the study being undertaken was presented by the Senior Researcher and showed the actual process flows that was observed during the actual field-data gathering and observation. The participants were asked to validate the data. The participants were divided into two groups, those representing the new applicants and the renewing applicants. They were instructed to work in groups and agree among themselves as to their perceived experience and time the processes that took them in securing their business permits. They were shown a diagram on the actual observed


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processing. The participants were asked to validate whether the process is accurate. Inasmuch as there was not enough people that were tracked from beginning of the transaction to its completion since the business registration period has already lapsed, the participants were then asked to recollect the approximate time they have experienced in securing their business licenses and permits. They were given small colored stickers to stick on the diagram the time that took them in accomplishing specific steps in the business licensing steps. After this, they were again instructed to look into the diagram and indicate the troublesome process and give reasons for such. The two major groups of participants worked separately and in the process indicated qualitative reasons for the bothersome process and their dissatisfaction on the experience they had in securing the license and permit for their business.

IV. Synthesis of Findings

a. Documentation of business licensing procedures for new and old applicants Presented in the Table below is a summary of the time and motion study findings in the two cities as they are compared with Muntinlupa and Iligan Cities, the benchmarks in BOSS for this study:

Benchmarks Under Study Muntinlupa

(2003) Iligan (2004) Bacolod (2005) Ormoc (2005)

Number of BPs approved during the period

8, 908 814 13,245 2,013

Number of Steps

12 steps DTI On Line

LGU- 12 NGA-5 Total=17

19 steps 17 steps

Business Licensing Tracking time

15 minutes

1 hour and 34 minutes

128 hours or 16 working days

7 hours- 16 hours, 20 minutes

Number of days to complete BPR Cycle

1 day 2 days 9-16 days 2-17 days

No. of Documents and forms Required

New- 12 Renewal- 7

19 forms None for renewing businesses

No. of Offices 1 17


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Involved No. of clearances and signatures

New- 12 Renewal- 7

21 25 Renewal-14 New-17

No. of personnel involved

LGU-27 LGU- 92 NGA-14

Frequency of backtracking

3 75 Not observed*

Accessibility of Required Forms

Downloadable in Website

Yes Not accessible Not accessible

Transparency in computing fees

Yes Yes No No

Process flowcharts and schedule of fees posted

Available even at the barangay level

Available Not available Not available

The efforts of Bacolod and Ormoc Cities to put up their own versions of BOSS this year was positively regarded by their constituents. In Bacolod City, interviews with the business clients reveal that the business permits and licensing process and procedures this year was better than the previous year. Efforts to be more customer friendly include the pooling of various city offices together in one area, an improved process lay-out, presence of visitors’ chairs and air-conditioned waiting areas for clients. Although limited, there was an effort to disseminate BOSS information to the public and also institutionalize the change through city executive orders and memoranda. In Ormoc City, the clients also appreciated the efforts of the city government in putting three NGA offices (SSS, PhilHealth and Pag-Ibig) and three LGU offices (Fire, Engineering and Zoning) involved in business licensing in the Ormoc Superdome. Furthermore, this year the LGU decided to have all assessment fees and taxes be done by the permit office and be reflected in one receipt to promote transparency. This is an improvement to last year’s practice of paying assessment fees separately. Furthermore, there is no need for application forms for renewing business permits in Ormoc City. Despite these efforts, however, the comparative table below shows that the business permits and licensing processes and procedures in the two study areas, Bacolod and Ormoc Cities, need further improvements. As compared to Iligan and Muntinlupa cities, which are benchmarks of BOSS in the country, further improvements are in needed in the areas of having shorter processing time and completion of business permits and licensing cycle, lesser backtracking, lesser number of steps, signatories and forms to be filled up, clearly articulated and presented process flowcharts and schedule of fees. In addition, there is a need for a more customer friendly physical layout and personnel services from the LGUs.


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Specifically, the following weaknesses were observed in the study and even raised by the clients: In Bacolod City: • Cramped PLD Office • Complaints about SSS as an additional requirement and also blocking the PLD door,

causing heavy traffic • Discrepancy between the standard process and the actual process • Hardly accessible application forms • Too many signatories and clearances required • Queues and forms not segmented according to business types • No information dissemination at the barangay level • No process flowchart and schedule of fees posted • Documentary stamp and notary public services turned into money-generating

activities. • City frontliners unaccommodating and unfriendly In Ormoc City: • Processing done in different offices after the end of business licensing period • Cramped Superdome during the business licensing period • No observed posters nor information on process flowcharts and schedule of fees • Complaints in the compliance of SSS, PhilHealth and Pag-Ibig requirements • Problems in availability of signatories in different offices • Some requirements are not necessary (TIN, birth certificates and marriage contracts

for SSS) • Some steps should not be included in the business permits and licensing layout, i.e.,

water bill and land bill. • Delays due to limited number and difficulty in the use of computers • Delays due to limited number of personnel in the treasurer’s office • Delays due to long length of time in scheduling fire inspection and issuance of

certificate • No information on the non-extension of the business permit and licensing period • Preferential treatment of LGU frontliners to “people they know”

V. Conclusion Generally, the two cities experience inefficiency in processing business licenses and permits. Current procedures involved too many unnecessary steps and despite the establishment of BOSS, the location of the offices for processing these permits and licenses were still segmented and far apart, making it harder for clients to go from one place to another. Inadequate guidelines made handling of transactions difficult as well, for both the city personnel and their clients. Further, the city personnel were not


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“customer-friendly,” and behaved inappropriately toward their clients. The study shows that the inefficiency, lack of transparency, a poor system for check and balance, and the absence of accountability result to the poor cooperation of the private sector and serve as deterrents to attracting new business. This “unfriendly” environment to businesses resulted to poor economic development and limited city resources for social development projects. For the cities to be a leading investment and business center in the country, they should focus on providing quality services to their intended clients. There are ten determinants of service quality2:

1. Reliability involves the consistency of performance and dependability. It means that the LGU should perform the right service at the right time. It also means that the LGU should honor its promises. Specifically, it involves accuracy in billing, keeping record correctly, performing the service at the designated time.

2. Responsiveness. This concerns the willingness or readiness of employees to provide service. It involves timeliness of service: doing the transaction immediately, calling the customer back quickly, giving prompt service.

3. Competence means possession of the required skills and knowledge to perform the service. It involves knowledge and skill to perform the service by the contact personnel (frontliners) and operational support personnel.

4. Access involves approachability and ease of contact. It means the service is easily accessible by phone or internet, waiting time to receive service is not excessive, hours of operation are convenient, location of service facility is convenient.

5. Courtesy involves politeness, respect, consideration and friendliness of contact personnel. It includes consideration of consumers’ property, clean and neat appearance of frontliners.

6. Communication means keeping customers informed in language they can understand. It also means listening to customers. It involves explaining the service itself, how much services will cost and assuring the customer that problems will be handled.

7. Credibility involves trustworthiness, honesty and having the customers’ interests at heart. Contributing to this are LGU reputation, personal characteristics of frontliners, degree of hard sell involved in interactions with the customer.

8. Security is the freedom from danger, risk or doubt. It involves physical safety, financial security and confidentiality.

9. Understanding the customer involves making the effort to understand the customers’ needs. It involves learning the customers’ specific requirements, providing individualized attention and recognizing customers.

10. Tangibles include the physical evidence of the service such as physical

2 Quality Counts in Services, Berry Leonard L., Zeithaml, Valarie A, Parasuraman A., Managing Services, Lovelock, Christopher H. 1988.


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facilities, appearance of personnel, tools and equipment used to provide the service, physical representation of the service.

Towards this end, the following strategies are recommended to the two LGUs to have better quality local governance:

1. Business permits and licensing process review and streamlining 2. Business One Stop Shop establishment 3. System-wide computerization for efficiency and transparency 4. Confidence-building initiatives in the business sector

VI. Recommendations These strategies will enable the cities to become “customer-focused,” with “customer satisfaction” as its main goal: Procedural Streamlining and Workflow Simplification The city reports contained recommendations to improve the business permit and licensing process. These include:

1. Improvement of Physical Set-up and Provision of Amenities for more Convenience

Customer satisfaction can be achieved by the provision of better physical facilities. This may include the following:

• Chronological arrangement of the tables of the different local and national

government agencies involved in the processing based on process flowchart.

• A waiting area where a television set is made available to entertain clients while waiting for the release of papers. Free drinks and candies may be served while waiting.

• Frontliners wear their ID at all times for their proper identification, and the identification of fixers, if any.

• Provision of a client/customer feedback system (verbal and written) where clients’ comments, suggestions and/or complaints could be acted on promptly by the personnel.

• Trained receptionists can be fielded in the vicinity to assist the taxpayers in filling up application forms to minimize the number of erroneous entries.


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For Bacolod:

• All concerned offices (LGU and National) should have a table at the BAY center or wherever the OSS will be placed in the future.

• The tables/ sections at the OSS must be arranged according to the process. • There should be an information desk beside the entrance and

accommodating receptionists should man this desk. • Schedule of taxes and fees should be posted at conspicuous areas for

transparency. BIR clearance should be a pre-requisite of assessment and payment of taxes to ensure that the declared gross income is correct.

• Customer service amenities could be provided. For instance, there should be a waiting area where clients wait for their turn. Coffee, reading materials and other amenities should be provided. There should be more cubicles in the comfort rooms for women so as to avoid long queues.

For Ormoc:

• Information should be disclosed as to the design of the system, essentially how the automated system computes the taxes being levied.

• The local government unit can take a pro-active stance by putting up posters, and/or provide flyers (preferably written in Cebuano), giving information as to what documents are needed to get the different clearances from the different agencies and local government departments.

• The venue chosen should provide favorable environment for the clients processing their papers like seats in an enclosed and well ventilated space. The space should be large enough to accommodate a large number of clients, even if only for a limited time.

2. Streamlining the process flow

This can be done by removing unnecessary steps or clustering related and similar steps and functions. The streamlining should result in less number of steps, less number of signatories and clearances and shorter processing time and completion of business permit renewal cycle.

For Bacolod:

• There should be a simple, clear and detailed business licensing process

flowchart that indicates steps, the office/ division responsible, requirements and expected processing time for the step.

• Notary public and documentary stamps should be centralized and payment for it must be accounted for by providing receipts; although it should be maintained that the clients can avail services outside.


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• If possible, inspections by Fire, Building and Health offices of old establishments are done before the licensing period in January to avoid backlogs.

• PIN and zoning steps should be merged since the concerns of these two are more or less the same.

• Centralized automated numbering system can be used for a more organized and convenient way of determining which client should be entertained by what table or office.

• See Annex 6 for Bacolod Recommended Flowchart For Ormoc:

• The whole procedure can further be simplified by removing the land tax and water works clearances. Most applicants for business permits are lessees and it would be unfair practice on the part of the local government to business owners who rents their business spaces to involve them in a collection problem between the local government and building/land owners.

3. Improvement in Accessibility of Forms and Other Materials

Accessibility of forms may be done by making these forms downloadable in the cities’ official web page. Use color coded forms may also be considered to differentiate forms needed per type on applicant (e.g. different colored forms for new or for renewal, transportation, etc.)

For Bacolod:

• Each client must be given a copy of the flowchart upon arrival and brief orientation thereof. The same flowcharts must also be posted at conspicuous areas around the OSS venue.

• At the information desk, a feedback box must be provided for comments and suggestions of the clients. The receptionists should also be prepared to immediately address the concerns of the clients.

• Forms should be readily available at the information desk and this should be for free.

For Ormoc:

• A better filing system is also recommended at the Permits Office since there were complaints from clients of misplaced assessments forms.


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4. Customer Focused Personnel

Customers may be categorized into two: the frontliners providing direct business licensing services to the clients and the operational support personnel. One of the tasks of the latter includes an information campaign both to LGU people (internal customers) and to the business clients (external customers) on the new procedures in processing permits and licenses. This may involve:

• The conduct of human relations training and seminars for city hall personnel

involved in processing permits and licenses. • Use of radio and TV broadcasts • Conduct of the orientation/for a with Chamber of Commerce, DTI and other

stakeholders. • Barangay level announcements, including visits to malls, markets or

establishments were most people are visiting.

For Bacolod:

• Manning by the competent and friendly employees from 8:00 a.m. to 5:00 p.m., with no noon break whatsoever during business licensing period.

• Service providers should all be advised to smile and greet the clients. Also, unnecessary activities that delay service delivery should be prohibited.

• To have wider and more extensive information dissemination, the City Government can mobilize the barangays and can fully tap the tri-media.

• The two signatories of the permit, the Head of the PLD and the City Mayor may delegate an authorized representative who can stay at the OSS center during the whole period of licensing to hasten the issuance of permits.

For Ormoc:

• Increasing the capacity at the Permits Office also entails increasing the resources at the City Treasurer’s Office, particularly at the cashier. The number of cashiers should be increased so that those being processed by the Permits Office can be accommodated at the cashier section.

• The increase in the capacity to process in the Permits Office and the Licensing

Cashier section need not be done on a permanent basis. This can be applied only during the peak season, only during the month of January to accommodate all applications.

• As to the availability of the signatories of the different offices, the mayor

should instruct the heads of offices to make sure that if the signatories are out of the office, an officer in charge who could sign on behalf of these


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signatories be given responsibility so as to make sure that clients would not be going back and forth these offices to get these signatures.

Setting up of Business One Stop Shop (BOSS) The BOSS is a mechanism whereby all the agencies related to securing business licenses and mayor’s permits were housed in one area for the convenience of the taxpayers. The above procedural recommendations may be applied in a BOSS set up. Most BOSS was restricted to the first 20 days of January. The cities may consider to institutionalize the BOSS and to offer it year-round. To ensure the efficient administration of the BOSS, an LGU unit may be set up to supervise or manage the examination of applications for business licenses and mayor’s permits issuance. It will be responsible for the maintenance of all data/information on all taxpayers. It may also be responsible for the inspection of all business establishments operating within the cities. To further hasten the processing of business permits, the BOSS unit may consider bringing key agencies from the public and the private sectors together, namely: local government, private organizations and national government agencies—for them to communicate and act on business permits processing more efficiently. Policy formulation and strategies in improving business licensing may be conducted in consultation with these three sectors. An innovation of Muntinlupa City, the on-line connection for business registration with the Department of Trade and Industry (DTI) as well as the Social Security System (SSS), may be considered. The On-Line Business Name Registration hastened business permit processing of Muntinlupa City to 15 minutes. Information Technology IT may be promoted through city-wide computerization. The cities should develop various computer systems for more transparent and red-tape free transactions in the local government. For Bacolod City, the LGU should again consider pursuing the TRACS that it initiated, specifically fully computerized processing of business permit applications through the following: automated tax computations (to ensure transparency of transactions); automated printing of tax assessment records (a time-saving feature) and automated printing of Mayor’s permit (a time-saving and foolproof feature considering the fact that the Mayor’s permit forms could not be printed unless payments had been made and posted in digitized ledger cards). For Ormoc, the Permits Office can be made more efficient by removing the encoder altogether and allow the assessor to encode directly into the computer and print, then sign the computer printed assessment form. A software should be developed where all the taxes and fee schedules are programmed, which should include the fire department


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assessment, so that the clients would only have to go at the permits office to have all the assessments be computed. But this entails increasing the resources of the Permits Office, adding computers and printers to increase its capacity to process assessments. Policy Recommendations The creation of the BOSS LGU unit and the procedural changes require the issuance of Executive Order and Memo from the city mayors. The legal support will specifically state the purpose and objectives of the procedural reforms, the design of streamlining procedures, the BOSS as a means to bring together all local and national government agencies/offices involved in the processing of business permits in one venue. The EO should specifically state the composition, organizational structure, tasks, functions and responsibilities of BOSS unit staff. Sanctions should also be stated for the non-compliance of policies stated in EO by responsible people. Participatory Action Planning To facilitate the implementation of the recommended improvements, it is essential for the LGU to conduct a participatory review of the business permit and licensing practice and a participatory action planning. This should involve both the internal customers (the LGU people) and the external customers (the various stakeholders outside the LGU) for them to buy in and have ownership of the plan.

Annex 1: Time and Motion Instrument Observation and Process Documentation

Observation/Process Guide: Date/Time of Observation:___________ Conducted by: ______________ Type of customer: __ new applicant ___ old applicant/renewal __ processed by liaison __ processed by owner ___ others (indicate) Type of business: __ micro __ cottage ___small __ medium __ large Nature of business: ________________ Time and Motion Documentation: BPR Steps/Processes (* -major; ** sub-step)

Specific Activity/Action/Motion

People Involved

Time Spent (processing/waiting/idle)

Physical layout info

Other observations

Materials

BEG END Step 1: Go to info booth

Inquire about...

Applicant Booth __m away fr. __

Respond by...

Frontliner’s designation

Greeted the applicant w a smile

Handed form 101

i

ii SMEDSEP Time and Motion Study

Annex 2: Interview and Validation Guide A.

1. What business are you registering? 2. What are the uses of the registration documents, permits or licenses? 3. What must be registered and when? 4. What are the requirements for registration? 5. What is the process of registration? (Note: Use flipcharts for FGDs or separate

paper for KI to map out detailed steps of the procedure or process; use separate sheets for new and for renewal of business permits)

6. Who are involved per step? Describe briefly their involvement. 7. What is the estimated time to complete each step? 8. What are the usual actions and gestures of service providers and clients per step? 9. What forms, documents, signatures are needed per step? 10. Aside from time and effort, what are the costs involved per step?

B.

1. Based on your experience, are you satisfied with the current business licensing procedures and services of the LGU? Why?

2. What in the overall process do you find exemplary? Below standard or needs improvement?

3. Which of these steps do you consider as bottlenecks? Why? 4. Which do you find essential? Which do you find unnecessary? 5. What are your suggestions for improvement along these areas:

physical lay out including paraphernalia process lay out supporting documents and paraphernalia service providers costs others

6. How do you see the improvements being realized?

Note: Registration forms containing pertinent info will be required per FGD

iii SMEDSEP Time and Motion Study

Annex 3: Checklist of Secondary Materials 1. City profile esp. Local economic development profile, VMG, plans and programs 2. City organizational structure 3. Historical income from major sources 2000- present 4. Master list of businesses, categorized according to nature and classification 5. Number of business permits renewals 2000-present 6. Laws, policies, local ordinances, revenue code, memo etc. on local

economic/business development 7. Past studies on past/current business permit system and improvement/innovations

(past/current) 8. Copies of Licensing Plan Procedures and steps and standards including process

layout, physical lay out map , assigned personnel, etc. 9. Copies of forms, process charts, applications, paraphernalia, pictures etc. used in

business licensing (past/current) 10. Background info (names, position, year of service, office) of personnel and units

within the LGU and outside LGU involved in business licensing Annex 4: Process Control Table (For Cause and Effect Analysis) Effect Categories of

Cause(s) Specific Description of Cause(s)

Actions Taken by Frontliner

Actions Taken by Applicants

Delayed processing of form 101

Material Personnel Procedure Equipment Others

II. City Reports

A.Bacolod Business

Licensing Findings and Recommendations

34

Bacolod Business Licensing Findings and Recommendations

List of Acronyms

1. Background 2. Methodology and Narrative of Field Research Activities 3. Economic Profile of Bacolod City 4. Business Licensing Standard Operating Procedures 5. Observed and Documented Business Licensing in Bacolod City 6. Assessment of Overall Management 7. Recommendations Attachments Appendices

Appendix 1 Breif History and VMG of Bacolod City Appendix 2 Researcher’s Daily Field Account

SMEDSEP-Business Licensing Procedures Time and Motion Study

35

BACOLBACOBAC List of Acronyms

Bacolod Study ABC Association of Barangay Captains BTA Bacolod Traffic Authority BIR Bureau of Internal Revenue BNR Business Name Registration BTPC Business Tax Payment Certificate BTRCP Bureau of Trade Regulation and Consumer Protection CA City Administrator CFD City Fire Department CHD City Health Department CHO City Health Officer CLUP Comprehensive Land Use Plan CMO City Mayor’s Office CPDO City Planning and Development Office CT City Treasurer CTO City Treasurer’s Office CZDB City Zone Development Board DOLE Department of Labor and Employment DTI Department of Trade and Industry EO Executive Order IRA Internal Revenue Allotment IRR Implementing Rules and Regulations LGU Local Government Unit LO Licensing Officer NGAs National Government Agencies OBO Office of the Building Official OR Official Receipts OSS One-Stop Shop PLD Permits and Licenses Division SEC Securities Exchange Commission SP Sangguniang Panglunsod SSS Social Security System TP Taxpayer (or business establishment/enterprise seeking to register) TRACS Tax Revenue Assessment Collection System VMG Vision, Mission, Goals

BACOLOD CITY’S BUSINESS LICENSING PROCEDURES

1. Background One of the crucial components in any effort to improve tax collection and enable business environment is the streamlining of government processes and procedures, thus promoting transparency and accountability thereafter. The Bacolod City government, as it embarked in the effort to improve its business environment, created an Anti-Red Tape Task Force through an Executive Order (EO) with the goal to “review and streamline the present systems and procedures for taxation and regulation, as well as for the procurement and payment of supplies and services.” One of the immediate functions of the Task Force is to review the Internal Administrative Systems for Business Permits and Licenses. In response to this policy, the Task Force planned to put up a One-Stop-Shop (OSS) for the application and renewal of business permits during the mandated period for the year 2005. On January 3, 2005, the City Mayor issued a memorandum directing the Association of Barangay Captains (ABC) President, all Barangay Captains, the City Health Officer (CHO), the City Treasurer (CT), the City Fire Marshall (CFM), the City Planning and Development Coordinator (CPDC), the City Veterinarian (CV), the City Tourism Officer (CTO), the Bacolod Traffic Authority (BTA), Permits and Licensing Division (PLD) – City Mayor’s Office (CMO), and the City Building Official (CBO) “to set up respective sections/ divisions handling the processing of Permits…and to deploy necessary manpower...” 2. Methodology and Narrative of Field Research Activities There were four major activities undertaken during the field research, namely: selection of respondents, actual tracking of applicants (respondents), key-informant interviews with LGU officials involved in business licensing, the applicants and accounting offices and gathering of secondary data. Field research took place from January 19-29,2005. See Annex 2: Table 1: Researcher’s Daily Field Account. Selection of Sample Applicants Applicants taken as study samples were randomly selected, although good representation based on the following criteria were taken into account:

• nature of business • size of business (micro, cottage, small, medium, large)


36

• type of applicant (new or old) • kind of applicant (owner, liaison, relative, others)

There were two venues where the researcher waited for possible sample applicants, namely: BTA–reception desk and CTO–payment for application form. The researcher introduced herself and gave a brief overview of the study and asked permission from the prospective applicant. Oftentimes, City officials helped in introducing the researcher. The table below presents the sampling of the study:

Table 2.1: Sampling Design

Liaison Owner 1 1 11 4

Community/ Social/ Personal Services

Others 11 2 Liaison 1 1 2 Owner 1 1 2

Transportation & Communications

Others 1 1 Liaison Owner

Electricity, Gas & Water

Others Liaison 1 1 Owner

Financing, Insurance, Real Estate & Business Services

Others Liaison Owner

Construction Industries

Others Liaison Owner 1 1

Manufacturing Industries

Others TOTAL

1 1 3 2 1 1 4 1 14

Industry Class Nature of Business

Micro Cottage Small Medium Large TOTAL

NEW OLD NEW OLD NEW OLD NEW OLD NEW OLD Liaison 1 1 Owner

Retail/ Wholesale Trade

Others

A total of 14 applicants were observed during the duration of the field research. All but one (1) finished the entire business licensing process. Of the 13 that were able to complete the process, only one (1) was able to claim his/her permit during the research period. Four (4) of the samples were new applicants, while the rest (10) were old applicants. The distribution based on size of business was as follows: 2 micro, 3 cottage, 3 small, 5 medium and 1 large enterprise/ business. The distribution according to nature of business: 1 in retail/ wholesale trade, 2 in community/ person/ social services, 5 in transportation and communication, 1 in financing/ banking and 1 in manufacturing. Four (4) applications were processed by liaison, 7 processed by owners, and 3 applications were processed by relative, friend and others. Actual Tracking of Applicants The researcher, upon getting the consent of the applicant, followed the latter throughout the entire processing of permits. As much as possible, the researcher avoided interacting with the applicant so as not to affect the result of the time tracking. Also, the


37


38

researcher avoided helping the applicant even if the latter was about to take a wrong step or was already committing a mistake. Using a stop-clock, the researcher timed the following: 1) walking time, which was the time spent going from one step to another; 2) waiting time, the time when the applicant waited for his/her turn; and 3) processing time, which start from the time the applicant was entertained by the service provider up to the point when the applicant left for the next step. Specific actions per step, forms and signatures required and fees were documented. Also, the unnecessary actions of the service provider were noted, along with the manner service was provided. The qualitative questions such as the level of satisfaction and recommendations to improve the business licensing process were asked after the applicant finished the processing of his/her application. In cases when the applicant decided to continue the next day, the researcher asked for the contact number of the applicant or set an appointment with him/her. Interviews Qualitative data used in the study were gathered through key-informant interviews. Informants include 11 City officials (4 PLD officials, 1 CTO officer, 1 CPDO officer, 1 BTA officer, 1Bacolod Police officer, 1 City Health official, 1 PIA official and an official from CMO), 14 business enterprises (these were the 14 sample applicants) and 3 accounting offices. Queries delving on preparations for the OSS, challenges and problems in business licensing, Standard Operation Procedures (SOPs) and guidelines pertaining to business licensing observed at their respective offices and willingness and capacity to improve/ streamline the business licensing process were answered by the City officials. On the other hand, the business enterprises and the accounting offices were asked to give their assessment on the business licensing process—whether they were satisfied or not, their recommendations to improve the process and system and other general observations. Gathering of Secondary Materials The following documents/data were acquired to serve as additional source of information for the study:

• City profile especially the local economic development profile, VMG, plans and programs

• City organizational structure • Historical income from major sources, 2000- present • Number of businesses, categorized according to nature and classification • Number of business permits renewals, 2000-present • Laws, policies, local ordinances, revenue code, memo etc. on local

economic/business development • Business Licensing Flowchart


39

• Copies of forms, process charts, applications, paraphernalia, pictures, etc. used in business licensing (past/current)

• Background information (names, position, year of service, office) of personnel and units within the LGU and outside LGU involved in business licensing

These documents/ data were acquired from the PLD office, CPDO, and the Sangguniang Panglunsod office. 3. Findings a. Economic Profile of Bacolod City Bacolod’s economy depends primarily on commerce, transportation, communication and service. Trading accounts for half of gross sales for 2000 and more than a third of business permits issued, capital invested, and manpower employed in 2001. The major goal of Bacolod’s economic sector, as articulated in the Comprehensive Land Use Plan (CLUP) of Bacolod City for 2001-2010, is: “Increased investment to bring about economic growth thereby providing employment opportunities and improve the quality of life of the people.”

Summary of Business and Trade by Special Classification As shown in the table below, business and trade investments in Bacolod City is diverse with almost all kinds of business ventures present. The biggest in terms of capital invested and the most numerous as well are the contractors/ services, with capital investment amounting to P163,295,011.51. This is closely followed by the Wholesalers/Retailers/Distributors/Dealers, which has the highest number of employees at 46,480. On the other hand, investment on private hospitals, privately-owned cemeteries and memorial parks, institution of learning and printing press/ publishing houses need a big boost.

Table 3.1: Business and Trade Investments in Bacolod City

Business Nature Business Count

Employees Count Capital Invested

Amusement Places/ Devices 388 3011 17,163,050.00 Banks and other Financial Institutions 459 3140 20,892,500.00 Contractors/Services 6985 2421 163,295,011.51 Hotels/Motels/Pensions/ Lodging/ Boarding Houses 144 1615 6,107,360.00 Institution of Learning 70 101 1,205,000.00 Manufacturers/Producers/Assemblers 693 10667 30,120,008.06 Others Service Establishments 166 1009 4,830,178.00 Printing Press/ Publishing Houses 63 390 1,212,500.00 Privately-Owned Cemeteries & Memorial Parks 3 81 0 Public Eating Places 955 10395 20,826,484.00 Public Market 1149 23927 365,000.00 Real Estate Operators 446 4387 23,322,195.37 Wholesaler/Retailer/Distributors/Dealers 5806 46480 107,074,382.50 Private Hospital 2 544 0 TOTAL 17329 108168 396,413,669.44

CMO-PLD, Bacolod City – 2003

Number of Business Permits Issued from 1997-2004

Table 3.2: Business Permits Issued from 1997-2004

1997 1998 1999 2000 2001 2002 2003 2004 2005* 11,223 10,481 9,394 11,128 11,954 11,319 15,616 13,248 13,245

CMO-PLD, Bacolod City – 1997 - 2005

There is no clear trend in number of business permits issued from 1997-2004. If there is, it appears erratic, decreasing from 1997 to 1999, then increasing from 2000 to 2001, only to fall once again from 2001 to 2002, increase in the following year, then decrease once more in 2004. *Assuming all those who acquired application forms would renew or apply for permit, there will be no significant change in the number of permits issued in 2004 and this year. This indicates a need to assess the business environment of Bacolod City and make necessary adjustments to ascertain consistent growth and development. Below is the graphical presentation of trend in business permits issued from 1997-2005:

Diagram 3.1: Trend of Business Permit Issued (1997-2005)

Trend of Business Permits Issued for FY 1997-2005

11,22310,481

9,394

11,12811,954

11,319

15,616

13,248 13,245

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1997 1998 1999 2000 2001 2002 2003 2004 2005*

Year

Income Attributable to Business Permits From 2002 to 2003, there is a 257% increase in the estimated yearly tax due as a result of the increase in business count by 5,193. This is remarkable for the increases in the past years since 1995 were below 100%. The manpower also increased as a result of the sudden boom in number of businesses.


40


41

Table 3.3: Income Attributable to Business Permits

Year Manpower Permit Count

Business Count Gross Sales P Estimated Yearly

Tax Due P

1995 39,779 10,170 12,244 9,876,065,804.60 38,174,690.55 1996 41,984 10,512 12,654 12,138,742,157.69 47,213,223.55 1997 44,383 11,223 13,346 15,176,576,481.36 58,732,662.42 1998 41,324 10,481 12,781 16,264,325,745.39 55,542,399.63 1999 42,636 9,394 11,517 15,708,155,293.95 61,734,481.66 2000 40,879 11,128 13,352 15,423,513,055.22 64,905,889.46 2001 48,636 11,954 14,739 20,223,336,337.94 90,868,244.78 2002 53,489 11,319 14,428 16,987,747,259.28 97,818,697.21 2003 123,291 15,616 19,621 52,297,480,719.00 251,027,907.45

CTO, Bacolod City – 1998 - 2003

Historical Income from Major Sources Table 3.4 shows that Bacolod City’s major source of income remains the Internal Revenue Allotment (IRA), constituting more than 50% of the total City income from 1999-2003. Meanwhile, Table 2.5 shows the percentage of contribution of business tax to the City’s total income. Consistently, income from business tax constituted only 15-17% of the total City income even if this has been increasing from 1999 to 2003. This means that there’s a need for efforts to improve tax collection.

Table 3.4: Income from Major Sources

1999 2000 2001 2002 2003 TAX REVENUE Real Property Taxes 61,817,814.42 41,358,669.09 55,391,429.52 66,756,223.96 63,630,040.48 Taxes on Business 79,817,406.51 82,899,233.87 91,716,575.87 96,396,989.87 101,862,820.38 Other Taxes 7,954,662.86 9,310,335.87 10,185,291.76 10,868,588.35 10,893,018.13 NON-TAX REVENUE Regulatory Fees 8,969,351.82 9,020,003.09 9,015,947.21 8,787,567.20 10,903,129.36 Service/User Charges 14,249,658.34 15,133,518.06 15,621,471.05 19,272,224.56 19,983,339.00 Receipt from Econ. Enterprises 6,752,550.42 8,291,429.22 8,928,759.10 9,561,184.12 8,762,378.26 Other Receipt 24,299,946.11 17,900,893.84 14,731,107.76 14,761,614.38 9,006,233.20 City Share from Take Out FTHP 0.00 92,623.48 0.00 0.00 0.00 Internal Revenue Allotment 297,938,090.00 356,718,524.00 347,362,642.00 351,253,800.00 370,304,516.00

GRAND TOTAL 501,799,480.48 540,725,230.52 552,953,224.27 577,658,192.44 595,345,474.81 CTO, Bacolod City – 1999- 2003


42

Table 3.5: % of Business Tax to Total Income

Year Business Tax Percentage of Contribution 1999 79,817,406.51 16% 2000 82,899,233.87 15% 2001 91,716,575.87 17% 2002 96,396,989.87 17% 2003 101,862,820.38 17%

Prospects and Challenges The Comprehensive Land Use Planning (CLUP) consultations identified the following as the major projects and programs that must be undertaken to ensure growth in the City’s economy. These are:

o Review and amend the Local Investment Code o Infrastructure Development Program

* Construction and establishment of the One-Stop-Shop Investment Center which involves the identification of sites for office, provision of office facilities, equipment and logistics. * Upgrading of Public Markets. * Construction of a new public market or improvement of existing ones in the outskirts of Bacolod City like Sum-ag, Alijis or Circumferential Road in the north side of the City, that will also serve as “Bagsakan Center”.

o Economic Research and Study Program o Skills Development and Livelihood Program o Economic Development Assistance Program o Marketing and Investment Promotion Program o Alangilan Nature’s Park Development Project o Recreational Land and Park at Villa Esperanza o Construction/Improvement of Abattoir.

Agricultural Conservation/Protection Program * Planting of mangroves along the identified shorelines. B. Business Licensing Standard Operating Procedure It is crucial in determining the success or failure of a service delivery or a program implementation that the standards or guidelines against which assessment will be based are clear. In the memo issued by the City Mayor on 3 January 2005, the 9-step procedure for the business licensing referred to as the “the improved guideline/ procedures for renewal/ issuance of business permits” was discussed. Diagram 2 below shows this. This same 9-step procedure can be found in the official website of the Bacolod City Government: www.bacolodcity.gov.ph. This flowchart differs from the flowchart posted beside the door of the Permits and Divisions Office. The latter, labeled as Application of Business Permit TRACS Program Flow Chart, is far simpler, consisting only of 5 steps, namely: (1) CMO-Permits:

http://www.bacolodcity.gov.ph/


43

Interview, Fill-up Application Form, Clearances (Barangay, Health, Fire Safety, Zoning, etc.); (2) CMO-Permits: Data Entry (TRACS); (3) CTO: Assessment, Billing; (4) CTO: Payment Based on Assessment; (5) CMO-Permit: Issuance-Permit (Print-Out). Based on the TRACS standard, acquiring of permit would only take one (1) day. The 9-step flowchart, on the other hand, does not provide standard time for each step or for the entire process.


44

Diagram 3.1: Standard Operating Procedure

STEP 7

Preparation of Business/ Mayor’s Permit by Permit’s Staff

STEP 6 Approval for Assessment and Payment Evaluation Section

STEP 1 Secure Application Form

The documentation of the standard business licensing procedure was difficult due to several problems:

1. The process or procedure explained by the City officials interviewed differ from at least three references, namely: the flowchart (presented above), the procedure as articulated in the memo of the City Mayor and the instructions found in the application form for Mayor’s permit.

2. The concept of OSS is not clear to everyone. Some of the officials interviewed

understand OSS as putting all the clearances required in the BAY center, not necessarily including the PLD and the CTO. The other officials, as well as most of the applicants, think that OSS means placing all offices/ divisions concerned with business licensing in just one place (in the BAY center). For these people, the present set up was not a one-stop-shop, but “many-mini-shops.”

C. Observed and Documented Business Licensing in Bacolod City Diagram 3.1 presents as detailed as possible the observed and documented business licensing process in Bacolod City. To give a very clear picture of the process, steps (numbered and boxed) are arranged in column according to the centers/ sites where the steps take place. For instance, steps 1,5-7 and 14-16 are placed under the BAY center column since these steps take place at the BAY center.

STEP 5

Applicant goes to Treasurer’s Office for Assessment of

Business Tax and Regulatory Fees and then Payment to Teller

STEP 2

Preparation of Data on Application Forms

STEP 8

Recommendation for Approval by City Mayor

STEP 4 Present Duly Accomplished

Business Application form to Clerk II, Clerk III, BPLO for

Evaluation of Entries and Documentary

STEP 3

Clearances with Concerned Departments/ Offices. Barangay, City

Helath, CPDO, Breau of Fire, etc.

STEP 9

Claim Mayor’s Permit with Releasing Section


45

(2) -Applicant pays P5.00 to the cashier. - Cashier receives payment and issues an official receipt (OR)

(3) - Applicant secures application form - PLD officer records name of applicant and form number on a record book - Another PLD officer checks applicants CTC and interviews applicant for information to be supplied in the form

(5.c) - If applicant is new, CHO officer instructs them to secure health certificate and sanitary permit; gives list of requirements

(6) - PLD officer receives form and encodes basic info (name, application #, old

(8) - Applicant gets number from the guard and waits for his/her turn

(11.c) - Applicant pays P500.00 annual registration/ renewal fee - BIR officer issues OR and signs form * Except applicants from

(12)

- Applicants with no permit of the previous year, secures h i

(14) - Applicant submits forms with all ORs and required docs - PLD officer checks form (ensures all

(7) - Head or Assistant Head of PLD signs form: okay for assessment

(4) - Applicant may have his/her form notarized and stamped. - Notary public is worth P50.00; while documentary stamp P20.00. * Applicant may choose to have their forms

(13) - SSS official checks SSS membership form and payment of applicant and employees - If not a member yet, instructs applicant to secure requirements and fill-up application form

CMO-PLD

(10.a) - PLD officer checks TRACS database and issues permit number * Only for applicant from transportation business

(15) - PLD officer records the application form - Another officer re-checks requirements - Official Mayor’s Permit printed by another PLD officer - Applications notarized at PLD sent to City Legal Office for signature - Head of PLD signs permit - Application form re-checked again by a PLD officer

(9) - Applicant gets number again from the guard and wait - CTO Accounting officer receives billing - Applicant pays taxes and fees - CTO Accounting officer issues OR

(5.b) - Zoning officer signs and stamps form

(5.a) - Applicant proceeds to the table of his/her barangay - Barangay officer checks CTC. If none, issues CTC; collects payment

(11.a) - Building officer checks OR from CTO - If new applicant, schedules inspection. - If old applicant, evaluates if

(11. b) - Fire officer checks OR from CTO - If new applicant, conducts inspection accompanied by the applicant. - If old applicant evaluates if

(11.d) - Applicant get form from the guard and fills-up form (both new and old) - DTI officer checks

(10.b) - BTA officer checks requirements - Another BTA officer verifies franchise - Applicant brings vehicle to Bacolod Police HQ for

(1) briefing/

(2) paying

f

(3) filling-up of form; (4)

notary public and stamp

(5.a) barangay clearance;

(5.b) zoning clearance;

(6) encoding of application ;

(7) approval for

(10.b) BTA permit; (11.d) DTI reg.; (12) PIN# from

CPDO

(8) assess

t &

(11.a) building permit; (11.b) fire clearance; (11.c) BIR clearance

(10.a) issuance of

permit number

(13) SSS clearance; (14) checking of

forms and issuance of claim stub;

(15)

OBSERVED BUSINESS LICENSING FLOWCHART

(1) - Receptionists give instructions to the applicants - Receptionists explain why not all offices/ divisions are at the BAY center (if

CTO

Diagram 3.2

BAY CENTER OTHER OFFICES

The diagram also indicates the specific actions per step. For a clearer view of the specific steps, the table below shows this along with the required forms, signature and other requirements per step.

Table 3.6: Specific Actions and Requirements per Step

STEP

SPECIFIC ACTIONS

REQUIREMENTS

1 BRIEFING/

INFORMATION

- Receptionists give instructions to the applicants - Receptionists explain why not all offices/ divisions are at the BAY center (if applicants ask)

None

2 PAYING OF APPLICATION FORM

Applicant pays P5.00 to the cashier. - Cashier receives payment and issues an official receipt (OR)

- P5.00 Attachment 1: Sample OR from CTO

3 FILLING-UP OF FORM;

- Applicant secures application form - PLD officer records name of applicant and form number on a record book - Another PLD officer checks applicants CTC and interviews applicant for information to be supplied in the form

- Community Tax Certificate (CTC) - Info Required: Name of Applicant, Business Name (if applicable), Business Address, Gross Income for the past year (if old applicant), Civil Status of Applicant, No. of Employees, Capital Invested, Type of Business Attachment 2: Application form

4 NOTARY PUBLIC AND STAMP

- Applicant may have his/her form notarized and stamped. - Notary public cost is P50.00; while the documentary stamp costs P20.00. * Applicant may choose to have their forms notarized and stamped elsewhere.

- Application form - P70.00

5 BARANGAY CLEARANCE

- Applicant proceeds to the table of his/her barangay - Barangay officer checks CTC. If none, issues CTC; collects payment - Barangay officer collects barangay tax (varies per barangay), issues OR and signs and stamps form

- Application form - CTC - Payment for barangay tax Attachment 3: Sample OR from barangay

6 ZONING CLEARANCE

- Zoning officer signs and stamps form - Application form

7 HEALTH CLEARANCE

- If new applicant, CHO officer instructs them to secure health certificate and sanitary permit; gives list of requirements - If old applicant, CHO officer signs and stamps form Attachment 4: Sample health certificate Attachment 5: Sample Sanitary Permit Attachment 6: Sample Inspection Form

- Application form - If old, past sanitary permit or business permit - If new, get sanitary permit and each employee must get health certificate - Requirements for health certificate: health certificate fee, stool exam result, CTC, chest x-ray result, 1X1picture - Requirement for Sanitary permit: Sanitary Inspection for Public Places (signed by the Sanitary Inspector, Sanitary Inspector IV, CHO Officer II and Chief of Sanitation Division)

8 ENCODING OF APPLICATION

- PLD officer receives form and encodes basic info (name, application #, old or new applicant etc., nature of business, address) into the TRACS database

- Application form - Clearance (Application signed) from Barangay, Zoning and Health

9 APPROVAL FOR ASSESSMENT

- Head or Assistant Head of PLD signs form: okay for assessment

- Application form - Clearance (Application signed) from Barangay, Zoning and Health - Application must be encoded

10 ASSESSMENT & BILLING

- Applicant gets number from the guard and waits for his/her turn - CTO Assessment officer checks application form, confirms gross income of applicant, prepares billing

- Application form - Signature of PLD Head/ Assist. Head okay for assessment Attachment 7: Sample Billing


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11 PAYMENT - Applicant gets number again from the guard and wait - CTO Accounting officer receives billing - Applicant pays taxes and fees - CTO Accounting officer issues OR

- Application form - Billing - Payment

12 ISSUANCE OF PERMIT NUMBER

- PLD officer checks TRACS database and issues permit number (write on the application form) * Only for applicant from transportation business

- Application form - OR for the payment of taxes and fees

13 BTA PERMIT - BTA officer checks requirements - Another BTA officer verifies franchise - Applicant brings vehicle to Bacolod Police HQ for inspection - Applicant gets City sticker - BTA office signs form * Only for applicant from transportation business

- Application form - OR for the payment of taxes and fees - OR for the payment of barangay tax - Original Franchise - Certification from the Association (for tricycles) - 2pcs. 2X2 picture (for trisikad) - Inspection Slip from City Police Office (signed by the Inspector and Chief) Attachment 8: Inspection Slip

14 BUILDING PERMIT - Building officer checks OR from CTO - If new applicant, schedules inspection. - If old applicant, evaluates if inspection is necessary. If necessary, schedules inspection. If not, signs form * Except applicants from transportation business

- Application form - OR for the payment of taxes and fees - If old applicant, past permit - If inspection necessary, Annual Safety Inspection Fees (signed by 2 officials), Certificate of Completion-Plumbing (signed by of the Master Plumber), Certificate of Completion-Building, Certificate of Final Electrical Inspection/ Completion (signed by 3 Building officials) Attachment 9: building inspection forms (4 pages)

15 FIRE CLEARANCE - Fire officer checks OR from CTO - If new applicant, conducts inspection accompanied by the applicant. - If old applicant evaluates if inspection is necessary. If necessary, conducts inspection. If not, signs form * Except applicants from transportation business

- Application form - OR for the payment of taxes and fees - If old applicant, past permit - If inspection necessary, Mission Report (signed by 4 Fire Safety Inspector) and Fire Safety Inspection Certificate (signed by the Inspector, City Fire Marshall) Attachment 10: fire inspection forms (2 pages)

16 GET/ RENEW BIR CLEARANCE

- Applicant pays P500.00 annual registration/ renewal fee - BIR officer issues OR, checks requirements and signs form * Except applicants from transportation business

- Application form - P500.00 - Documentary stamp Attachment 11: BIR Application for Registration form

17 DTI REGISTRATION/ RENEWAL

- Applicant gets form from the guard and fills-up form (both new and old) - DTI officer checks requirements - Applicant pays P500 - DTI processes the paper

- P500.00 - Accomplished DTI business registration form Attachment 12: DTI Registration Form

18 PIN# FROM CPDO - Applicants with no permit of the previous year, secures their Property Identification Number (PIN) from the City Planning and Development Office (CPDO) -CPDO officer checks location of business vis-à-vis City zoning. - CPDO officer supplies PIN # in the form

- Application form - OR for the payment of taxes and fees - For old applicants, past permit

19 SSS CLEARANCE - SSS official checks SSS membership form and payment of applicant and employees - If not a member yet, instructs applicant to secure requirements and fill-up application form

- Application form - OR for the payment of taxes and fees - Accomplished form - SSS Payment Attachment 13: SSS forms

20 CHECKING OF FORMS AND

- Applicant submits forms with all ORs and required docs

- Application form with all the above-mentioned clearances, signatures and OR


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ISSUANCE OF CLAIM STUB

- PLD officer checks form (ensures all requirements are complied with) - PLD officer issues claim stub and keeps application form

21 PREPARATION AND ISSUANCE OF

PERMIT

- PLD officer records the application form - Another officer re-checks requirements - Official Mayor’s Permit printed by another PLD officer - Applications notarized at PLD sent to City Legal Office for signature - Head of PLD signs permit - Application form re-checked again by a PLD officer - Application form brought to CMO for signature - City Mayor or Executive Secretary signs permit - PLD Officer records permit for release - PLD Officer releases permit and records released permit

Attachment 14: Sample Mayor’s Permit

D. Assessment of Physical layout, procedures and processes Physical Lay-out There were three centers/ sites of the business licensing, namely: the BAY center, the PLD office and the CTO. Located at the BAY center were the different offices (both national and local) from which applicants get clearance or permit. Serving as the center for arts and youth activities of Bacolod, the big space of the BAY center was conducive for process-centered activities such as the business licensing. As shown in diagram 5.1, at least 7 steps were undertaken at the BAY center. The other offices found at the BAY center but were not included in the diagram were the following: City Tourism Office, City Veterinary, and Real Estate Office. These were not included in the diagram because no transaction with these offices were observed during the field research. The barangays of Bacolod City were also present at the BAY center; although out of the 61 barangays of the City, only 20 put up their tables. The Center had two separate comfort rooms for men and women. The Center was equipped with a sound system but music was only played before and after the licensing period (8am-5pm) so as not to disrupt communication. The PLD office, on the other hand, was the most cramped among the three offices. With a surface area of approximately 45-60 square meters, 15-20 tables can be found around the room leaving a very small space where people walk and transact their business. Carried out at the PLD office were 7-8 transactions/steps, including SSS clearance, which was a clear flaw in the physical lay-out. It was unclear why the SSS table was placed at a very small office such as the PLD office and not at the BAY center where the rest of the national government agencies were located. Worse, the SSS table was exactly located close to the door of the PLD office, causing heavy traffic at the entrance. Not to mention that there were a lot of applicants complaining about SSS as an additional requirement.


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According to the applicants interviewed, the arrangement at the CTO was much better this year. This year, applicants waited inside the air-conditioned office seated. While last year, applicants had to fall in line outside enduring the heat and long queues. However, there were still cases applicants had to stand up while waiting for their turn because of insufficient seats to accommodate all clients. Number of Steps Required There is a clear discrepancy between the SOP and the licensing process observed. Inconsistent with the 9-step procedure that serves as the City’s SOP, a total of 16 basic steps for transportation business and 21 steps for other businesses were recorded/ observed. The following were the deviations of the observed process from the SOP:

• Some clearances required payment of taxes and fees first, thus clearances from these offices were only acquired after payment at the CTO.

• Issuance of Property Index Number as an additional step. • Notary Public and Documentation Stamp as requirement.

Sixteen (16) of the steps were LGU-supervised, 3 were transactions involving NGAs, 1 (notary public and documentary stamp) can either be private or LGU-provided, 1 involved barangays. Twelve (12) offices were involved. From the LGU, these were PLD, CTO, Zoning, CHO, Building, Fire, BTA and CPDO. The NGAs were DTI, SSS and BIR. The different barangay offices complete the list of offices involved. Required Forms, Receipts and Certifications For transportation business, 7-10 forms, certifications and ORs were required. On the other hand, other businesses would require at least 16 of these. For all types of businesses, the requirements include:

1) Community Tax Certificate 2) Accomplished Application form 3) OR for payment of application form 4) OR for payment of barangay tax 5) health certificate 6) OR for the payment of taxes and fees 7) Accomplished SSS forms with payment

For transportation business, the requirements include the list above and: 8) Certificate of Original Franchise 9) Certification from the Trisikad/ Tricycle Association 10) Inspection Slip from the City Police Office

For all the other businesses, the following are the other set of requirements:

11) Sanitary permit 12) Form on Annual Safety Inspection Fees


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13) Certificate of Completion-Plumbing 14) Certificate of Completion-Building 15) Certificate of Final Electrical Inspection/ Completion 16) Mission Report 17) Fire Safety Inspection Certificate 18) BIR Application for Registration 19) DTI Registration Form

For old businesses and for some micro to small businesses, the last 9 requirements above may not be required. Required Signatures and Clearances To complete the entire process of the business licensing, 8 signatures/ clearances for transportation business and at least 25 signatures for other businesses must be acquired by an applicant. These signatures/ clearances include:

1) barangay clearance 2) zoning clearance 3) health clearance 4) Signature of the Inspector (for the Inspection Slip from City Police Office) 5) Signature of the Chief of Traffic Management Unit (for the Inspection Slip

from City Police Office) 6) Signature of Sanitary Inspector (for Sanitary Permit) 7) Signature of Sanitary Inspector IV (for Sanitary Permit) 8) Signature of CHO Officer II (for Sanitary Permit) 9) Signature of Chief of Sanitation Division (for Sanitary Permit) 10) Signature of PLD Head/ Asst. Head-approval for assessment 11) Signature of Industrial City Engineer IV (for the Annual Safety Inspection) 12) Signature of OIC, Building Official (for the Annual Safety Inspection) 13) Signature of the Master Plumber (for the Certificate of Completion-Plumbing) 14) Signature of the Electrical Inspector (for the Certificate of Final Electrical

Inspection/ Completion) 15) Signature of the Electrical Engineer of the Building Office (for the Certificate

of Final Electrical Inspection/ Completion) 16) Another Signature of the OIC, Building Official (for the Certificate of Final

Electrical Inspection/ Completion) 17-20) Signatures of 4 Fire Safety Inspector (for the Mission Report) 21) Signature of the Inspector (for the Fire Safety Inspection Certificate) 22) Signature of City Fire Marshall (for the Fire Safety Inspection Certificate) 23) BIR clearance 24) DTI registration 25) SSS clearance 26) Signature of PLD head (for the Mayor’s permit) 27) Signature of the City Mayor (for the Mayor’s permit)

For transportation business, signatures 4-5 are exclusive requirement, while signatures 6-24 are not requirements.


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For old businesses and for some micro to small businesses, signatures 6-24 may not be required. Accessibility of Required Forms Application forms were hardly accessible. These were with the PLD office and can only be acquired after paying P5.00 at the CTO. Those who proceeded to the BAY Center expecting an OSS scheme were instructed to go to the City Hall first for the application form and go back to the BAY center again for the clearances. This caused grumbling among applicants. Information Dissemination & Flow Charts • Information dissemination through media was tapped, but to a limited extent. There

was only one news release on the business licensing dated November 17, 2004. This News Release informed the public of the availability of application forms as early as November 22, 2004.

• There was also no information dissemination that took place in the barangays. Although the City Mayor released a memo on January 3, 2005 regarding: (1) the setting up of the one stop shop at the BAY center; and (2) the procedures in acquiring business permits/ license, this did not specifically instruct the barangays to disseminate information.

• No flowcharts were posted in conspicuous areas. There were also no fliers available to inform the applicants about the process.

• To entertain applicants’ inquiries, an information booth manned by six (6) receptionists was placed at the BAY center. Although no similar booth can be found at the City Hall where majority of the required steps take place.

• As a result of the absence of information booth at the City Hall and flowcharts or fliers, there were cases wherein the applicant took the wrong step.

Transparency in the Computation & Accountability in the Collection of Fees • No schedule of tax rates and fees were posted. There was no mechanism to ensure

transparency in the computation of taxes and fees. There were rumors that the tax levied depended upon the “good graces” of the assessor. There were also complaints that tax levied to two businesses with the same nature and almost similar capital outlay differed.

• Some officials of the City Hall and the Barangays turned the documentary stamp and the notary public requirement into a money-generating activity. Several officials offered these services to clients casually while the latter go through the business licensing procedures. According to some applicants interviewed, this made them uncomfortable because they feel “napagkakakitaan.” [being taken advantaged]

Quality of Service During the course of the research, the following observations, which define the quality of service, were noted:


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• CTO officials seemed unaccommodating and unfriendly because oftentimes they were frowning at the clients and would not automatically direct the client to the next step unlike the other offices. Also, there was a case when the applicant/ client had to go outside the CTO and have her money changed because the CTO teller did not have enough change for the client’s payment.

• One of the officials at the PLD office refused to entertain an applicant even when he was not doing anything. Although this was a rare case because throughout the period of the research, officials of PLD entertained applicants immediately.

• The BTA can be considered the worst provider of service. It was observed that an official of BTA was smoking while interacting with clients. The office did not devise a mechanism to orderly entertain clients as there was neither a line nor a numbering system. There was also a case when for more than 1 hour during office hours (11am-12nn) no official of the BTA would entertain applicants because “they were having a meeting.”

• CHO and Fire Office, on the other hand, can be considered the best service providers. Their officials prioritized clients and served them with a smile. Also, Fire officials were in uniform during the licensing period, which according to them shows their seriousness and dedication to the OSS. Both offices started and ended on time.

• The City Government did not provide a feedback mechanism to ensure that comments and issues of the clients were addressed.

Time Tracking Table 6.1 shows the average time spent per step. The accumulated value of all these average times is 7,678.1 minutes (128 hours or 16 working days), which is the general average time spent in business licensing. To get the exact average time spent by transportation business, average tracking times of steps 14-18 are deducted from 7,678 minutes since these steps are not required steps for transportation business. The difference is 7,589.4 (126.5 hours or 15.8 days). Therefore, transportation business spent an average of 15.8 days to finish the entire business licensing process. On the other hand, average tracking times of steps 12-13 are subtracted from 7,678 minutes (since these two steps are exclusive for transportation business) to get the average time spent by the other businesses. The result is 4,278 (71.3 hours or 9 working days). This means that the average time spent by all businesses, excluding transportation business, in acquiring a business permit is 9 working days.

Table 3.7: AVERAGE PROCESS TRACKING TIME (IN MINUTES)

Walking

Time Waiting

Time Processing

Time Total Tracking

Time

1 Information/ Briefing 7.5 0.6 1.3 9.5 2 Paying of application form 7.9 0.2 1.1 9.2 3 Filling-up of Form 3.1 1.0 4.1 8.2 4 Notary Public and Stamp 0.0 1.2 1.7 2.9 5 Barangay Clearance 11.4 1.0 3.8 16.2 6 Zoning Clearance 0.7 1.1 1.4 3.1 7 Health Clearance 6.3 5.2 6.7 18.2 8 Encoding of application 16.0 0.7 1.7 18.4 9 Approval for assessment 0.1 0.5 0.9 1.5


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10 Assessment & Billing 1.6 12.0 4.5 18.0 11 Payment 0.2 18.8 4.4 23.4 12 Issuance of Permit Number 1.1 0.9 1.8 3.8 13 Bacolod Traffic Authority permit 9.7 26.7 3360.0 3396.4 14 Building permit 2.3 5.6 6.8 14.7 15 Fire clearance 5.6 1.5 22.0 29.1 16 BIR clearance 0.3 5.4 5.4 11.2 17 DTI registration 16.6 2.7 4.8 24.1 18 Property Index Number 1.4 4.5 3.7 9.7 19 SSS clearance 8.0 8.2 2.8 18.9 20 Issuance of claim stub 0.8 4.9 2.3 8.0 21 Preparation & Issuance of Permit 0.2 9.0 4024.6 4033.8

TOTAL 100.8 111.4 7465.9 7678.1 in hours (minutes/60) 1.7 1.9 124.4 128.0 in working days (hours/8) 0.2 0.2 15.6 16.0

Businesses in transportation spent longer time than other businesses. This is because one of the two exclusive steps for transportation business (BTA clearance) ranks second among the top 5 steps that took the longest time in delivering services. See Table 3.8

Table 3.8: Top 5 Steps that Took the Longest Time

Waiting Processing Service Time Percentage Cumulative Percentage

1 Preparation & Issuance of Permit 9.0 4024.6 4033.6 53.2% 53.2% 2 Bacolod Traffic Authority permit 26.7 3360.0 3386.7 44.7% 97.9% 3 Fire clearance 1.5 22.0 23.5 0.3% 98.2% 4 Payment 18.8 4.4 23.2 0.3% 98.5% 5 Assessment & Billing 12.0 4.5 16.4 0.2% 98.7%

* Service time = Waiting time + Processing time (waiting time not included) * Total service time for all steps = 7580 minutes The table also shows that the preparation and issuance of permit constitutes more than 50% of the total service time and that the top 5 steps constitute 98.7% of the total service time. This means that only 1.3% of the total service time is spent for the other 16 steps. It is clear then where are the areas or sites of delay that require troubleshooting. Frequency of Backtrack Operationally defined as the act of going back to a site/ center already visited or accessed, backtracking may be cause by misdirection or could be a part of the design. For the 14 observed applicants, 75 backtracking were observed. Majority of the backtracking (95%) was mainly due to the inherent design of the process flow. The other backtrackings were due to misdirection (2.5%) and lack of requirements (2.5%). Attachment 16 shows the backtrackings per applicant along with the total number of steps per applicant and the total time spent by each of the applicants.


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Client Satisfaction The interview conducted with the sample applicants showed a common sentiment of slight dissatisfaction towards the existing processes and procedure. According to majority of those interviewed, the steps were complicated and confusing. It is not too client-friendly. They did appreciate the effort of the City Government to make life easier for them, but recognized rooms for improvement, especially in pooling together in one place the different centers and offices concerned with business licensing. One of the applicants succinctly articulated the sentiments of the applicants: “Kami na nga nagkukusang magbayad ng tax, kami pa ang napapahirapan.” [ It was our own volition to pay taxes, however, system is just burdensome.] This sentiment was aggravated by the rumors that a lot of businesses operating in the Bacolod City do not have permits. The sentiments of the accounting offices differ, on the other hand. They feel satisfied because they already know someone in the City Hall who helps them in the processing of documents. In the course of the interview, the respondents gave the impression that even the taxes levied could be lessened as long as one has contact inside CTO. 4. Assessment of Overall Management After presenting the findings of the study, which more or less depicts the City Government’s performance vis-à-vis business licensing, this part of the paper will attempt to explain why such was the kind or level of performance by looking closely at the different factors that affected (either hindering or facilitating) implementation or service-delivery. There will be eight factors or variables+ that are considered in this evaluation. In the course of the evaluation, we will also be able to identify Bacolod City’s strength as well as its weaknesses in the implementation of the OSS scheme. We will also touch on prospect for a successful implementation in the future. 1. Standards and Objectives

A successful policy implementation or service-delivery starts by having a self-evident and easily measurable standards and objectives. “Implementation cannot succeed or fail without a goal against which to judge it.” Obviously, there was a problem in the standards and objectives of the Bacolod’s licensing. There were ambiguities and contradictions in the statement of standards and the objectives were not clearly set. For instance, it was not clear which was the flowchart or instructions to be followed. It was noted that there were at least four (4) different sets of SOPs. Furthermore, the City Government was not clear on how exactly they would operationalize the One-Stop-Shop. There was no blue-print to guide actions and decisions. No concrete and quantifiable goals were set.

+ Factors used are from the following literature on implementation: Van Meter, Donald and Van Horn, Carl. “The Policy Implementation Process: A Conceptual Framework”; and Iglesias, Gabriel. “Implementation: The Problem of Achieving Results.”


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This can be attributed to the inadequate planning and strategizing that should have taken place before the licensing period. Although according to some officials they have started planning as early as November, still the planning was not comprehensive and even overlooked the basics such as logistical requirements, manpower and the like.

2. Resources

According to interviews, financial resources to support the OSS was not a problem. The City Government was willing to provide the necessary fund for the implementation of the program. However, since there was no comprehensive planning, the required funding for the project and which aspect of the project must be funded was not taken into account. But since the City Government was willing to provide funding for it, this factor can still be considered strength for future implementation.

3. Inter-organizational Communication and Enforcement Activities

To ensure effective implementation, it is crucial that standards and objectives are clearly communicated and are understood by those individuals or offices/ divisions involved. The memo issued by the Mayor on January 3, 2005 somehow helped in communicating what the Mayor wanted to be done. But orders are not self-executing; they require the presence of an action-enforcing mechanism. This was lacking. For instance, majority of the barangays did not put up their tables defeating the purpose of a one-stop-shop. There were also LGU offices not present at the BAY center. This could be explained by the absence of incentive in performing the task given or sanctions for non-compliance. Furthermore, there should be a more conscious effort to make the officials and offices involved appreciate the value of providing services that make taxpayers feel they are important. They should know and appreciate how a one-stop-shop scheme would yield positive result for the benefit of the whole City.

4. Disposition of the Implementors

As mentioned earlier, it is crucial to make the officials involved appreciate the goals and objectives of the OSS. This is because their disposition or attitude towards the program has a strong bearing on the success or failure of implementation. In this instance, some of the implementors gave no clear commitment to the OSS nor there was a mechanism to solicit or guarantee it. As a result, there were


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offices that did not even exert effort to put up a table at the BAY center. Also, it was obvious that some offices were not client-oriented and did not take into account the satisfaction of the business clients. Since disposition lies on one’s belief system, re-orienting the official’s attitude towards service would take a considerable amount of time and would require interventions through programs or trainings.

5. Political Condition

The political tide was not very much favorable at the moment when planning and implementation of OSS was taking place. According to interviews, as late as November 2004, the newly elected Mayor was still battling against a move to recall him. Also, some months before, the incumbent Mayor who was defeated in the 2004 elections filed an election protest, which she subsequently withdrew. Since the opposition held the leadership last term, there remain officials in the City Hall who are sympathetic to the incumbent Mayor and are therefore against the present administration. Furthermore, majority of the Sangguniang Panglunsod (SP) comes from the opposition. According to interviews, only 1 or 2 of the City Councilors is/are loyal to the Mayor. This has a direct impact on program and project implementation because the power of the purse lies with the SP.

As a result of such political configuration, the Mayor had to attend to projects and activities that yield immediate result and get approval of majority of his constituents. According to interviews, during the first few months of the Mayor in office, he focused on the garbage dumpsite, squatter relocation and payment for the casual employees. But there is a light at the end of the tunnel. The current Mayor already held the position in the past and was recognized to have performed very well. Commonly known recognition was that during his term, then Mayor of Marikina City, Bayani Fernando identified Bacolod as his model city. Because of a very good track record as Mayor from 1995 to 1998, Mayor Bing Leonardia enjoys the confidence and trust of the business sector and the middle class. According to Bacolod City’s local newspapers, he got most of his votes from the middle and upper class. Also, because business licensing is somehow neutral and is not a politically-loaded program or policy, opposition should be minimal. In addition, since it needs no drastic changes, its acceptability to the rank-and-file is high.

6. Leadership

In developing countries especially, leadership is very crucial. It provides direction, stability and consistency in the program implementation. The commitment of the Mayor to the OSS program and to client-oriented service delivery is undoubted. This was particularly shown when he visited the BAY


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center and was enraged by the minimal participation of concerned offices. This was when he said: “Kung magsisilbi din lang tayo, lubos-lubusin na.” [ If we serve, then we give a wholehearted and excellent service]. He immediately made adjustments after this visit by assigning his Executive Assistant, Atty. Aragon as point person for the licensing process. But as earlier mentioned, though committed, the Mayor had to attend to some other concerns, thus limiting his time to directly supervise the planning for the OSS. This is when the person/s or offices responsible should take the lead.

7. Structure

The Anti-Red Tape Task Force was the structure mandated to carry out the OSS scheme. The lead office was supposedly the PLD through Mrs. Ardis Jaculina. Somehow, the responsibility was not carried out as effectively as possible. Two possible reasons for this: one, because the Task Force is new, it is not yet fully functional or operational; and two, the PLD is already loaded with other responsibilities and thus can no longer play the very demanding role of Lead Office/ Division for the OSS. The Head of the PLD, Mrs. Jaculina is also a very busy person. She is currently the President of the City Government’s employees association and according to some officials interviewed and as observed during the field research, she is often attending out-of-town meetings and conferences. She is also expected to lead a soon-to-be-opened office on cooperative. In the future, therefore, not only capacity should be taken into account in choosing the lead person/ office for the OSS. The person/ office must also have enough time for the planning, preparation, implementation and evaluation of the OSS.

8. Technology & Facilities

The main cause of delay for the top 2 steps that took the longest time in delivering services (PLD-preparation & issuance of permit and BTA) was the lack of facilities, specifically computers and printers. Also, one of the reasons there were delays in the checking and retrieval of information from the database was that according to a PLD report, the Tax Revenue Assessment Collection System (TRACS) was not yet completed, and that data management of the City Government is not yet fully computerized. This shows how crucial technology and facilities are to ensure effective implementation.


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5. conclusion 1. Recommendations on Overall Management

Based on the different factors affecting performance mentioned above he City Government should consider the following during the planning for the OSS next year or in the future:

• There is a need for a clearly articulated and measurable standard of service delivery.

• There is a need for more customer focused service providers/implementors

2. Procedural & Process-Related Recommendations

There is a need to further improve the business licensing procedure and processes as well as the physical, material, personnel and logistical support. Below are some of the improvements that should be considered.

Physical

• All concerned offices (LGU and National) should have a table at the BAY center or wherever the OSS will be placed in the future.

• The tables/ sections at the OSS must be arranged according to the process. • There should be an information desk beside the entrance and

accommodating receptionists should man this desk. • Schedule of taxes and fees should be posted at conspicuous areas for

transparency. BIR clearance should be a pre-requisite of assessment and payment of taxes to ensure that the declared gross income is correct.

• Customer service amenities could be provided. For instance, there should be a waiting area where clients wait for their turn. Coffee, reading materials and other amenities should be provided. There should be more cubicles in the comfort rooms for women so as to avoid long queues.

Procedural

• There should be a simple, clear and detailed business licensing process flowchart that indicates steps, the office/ division responsible, requirements and expected processing time for the step.

• Notary public and documentary stamps should be centralized and payment for it must be accounted for by providing receipts; although it should be maintained that the clients can avail services outside.

• If possible, inspections by Fire, Building and Health offices of old establishments are done before the licensing period in January to avoid backlogs.

• TIN and zoning steps should be merged since the concerns of these two are more or less the same.


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• Centralized automated numbering system can be used for a more organized and convenient way of determining which client should be entertained by what table or office.

Material

• Each client must be given a copy of the flowchart upon arrival and brief orientation thereof. The same flowcharts must also be posted at conspicuous areas around the OSS venue.

• At the information desk, a feedback box must be provided for comments and suggestions of the clients. The receptionists should also be prepared to immediately address the concerns of the clients.

• Forms should be readily available at the information desk and this should be for free.

Personnel

• Service providers should all be advised to smile and greet the clients. Also, unnecessary activities that delay service delivery should be prohibited.

• To have wider and more extensive information dissemination, the City Government can mobilize the barangays and can fully tap the tri-media.

• The two signatories of the permit, the Head of the PLD and the City Mayor may delegate an authorized representative who can stay at the OSS center during the whole period of licensing to hasten the issuance of permits.

Attachment 15: Tracking Time per Step per Applicant

A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 DESCRIPTION OF APPLICANT New-1; Old-2 1 2 2 1 2 2 1 2 2 2 2 2 2 1 Liaison-1; Owner-2; Relatives-3; O-4 2 2 4 2 1 1 2 2 1 2 3 3 1 2 Size of Business 4 2 4 3 5 4 3 1 4 2 4 1 3 1 Nature common carrier factory janitorial; security restaurant banking sport outlet pool tricycle internet shop eatery health clinic common carrier internet café sari-sari store

STEP

1 Information/ Briefing Walking Time (minutes) - - 8 7.5 - - - - 6.52 - - - - 8 Waiting Time (minutes) 0 0 0 0.17 0 7.5 - - 0 0 0 0 0 0 Processing Time (minutes) 0.5 0.75 0.5 3.5 1.5 0.83 - - 1.5 0.92 2 0.15 2 2 Total Tracking (in minutes) 0.5 0.75 8.5 11.17 1.5 8.33 0 0 8.02 0.92 2 0.15 2 10

2 Paying of application form Walking Time (minutes) 7.5 7.7 - - 8.25 - - - 7.33 8.25 8 8 - Waiting Time (minutes) 0.33 0 0 0.25 0.25 0 0 0 0 0 0 0 2 0 Processing Time (minutes) 0.5 2 2.62 2.13 1.5 1 0.33 0.42 0.75 0.67 1 0.67 1.08 1 Total Tracking (in minutes) 8.33 9.7 2.62 2.38 10 1 0.33 0.42 0.75 8 9.25 8.67 11.08 1

3 Filling-up of Form 1.5 Walking Time (minutes) 3.05 2.18 3.1 8.25 2 3 2.45 1.5 1.43 1.08 1.5 2 3 9.25 Waiting Time (minutes) 1 1 2 2 1 2.15 1 0 0 0 0 1 2 1.33 Processing Time (minutes) 3.5 4 3.65 3.63 1 4 4.25 4 3.6 4.17 6.22 3.5 5 6.25 Total Tracking (in minutes) 7.55 7.18 8.75 13.88 4 9.15 7.7 5.5 5.03 5.25 7.72 6.5 10 16.83

4 Notary Public and Stamp Walking Time (minutes) 0 0 0 0 - 0 0 0 0 0 0 0 0.08 0 Waiting Time (minutes) 0 1.43 1.57 0 - 0 0.5 1.5 0 0 0 0 10 0 Processing Time (minutes) 2 2.2 2 3 - 2.15 0.67 0.5 0.57 0.58 3.82 0.5 3 1.07 Total Tracking (in minutes) 2 3.63 3.57 3 0 2.15 1.17 2 0.57 0.58 3.82 0.5 13.08 1.07

5 Barangay Clearance Walking Time (minutes) 8.5 30 7 9 0.25 - 7.33 8 0.17 8.35 6.55 10 8 45 Waiting Time (minutes) 0 6 5 0.5 - 0.33 0 0 0 0 0.83 0 0 0 Processing Time (minutes) 3.5 4 4 5 3 4 4.27 4.07 4.2 5.25 6 1.5 3 2 Total Tracking (in minutes) 12 40 16 14.5 3.25 4.33 11.6 12.07 4.37 13.6 13.38 11.5 11 47

6 Zoning Clearance Walking Time (minutes) 0.17 7.08 0.25 0.17 0.08 0.17 0.25 0.17 0.25 0.17 0.35 0.08 0.17 0.17 Waiting Time (minutes) 0 0 0 0 0 0 5 0 0 0 0 0 10 0 Processing Time (minutes) 1 1 1 4 1 4 0.72 0.67 1.27 0.5 0.83 0.5 2 0.67 Total Tracking (in minutes) 1.17 8.08 1.25 4.17 1.08 4.17 5.97 0.84 1.52 0.67 1.18 0.58 12.17 0.84


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7 Health Clearance Walking Time (minutes) 18.5 0.25 0.17 17 0.17 0.25 20 0.17 0.17 25 0.25 0.08 0.25 6.07 Waiting Time (minutes) 0 0 2 10 2 0 10 3 3.45 28.5 10 0 0 3.52 Processing Time (minutes) 18 1 0.75 27.15 0.5 2 15 0.83 2.7 14.5 5 0.5 2 3.5 Total Tracking (in minutes) 36.5 1.25 2.92 54.15 2.67 2.25 45 4 6.32 68 15.25 0.58 2.25 13.09

8 Encoding of application 11 Walking Time (minutes) 20 40 9 23.5 7 7 19.45 7 7.05 15 6.83 11 8 43.5 Waiting Time (minutes) 2 0 1 0 0 0 2.35 2.5 0.75 0 0 0 0 0.78 Processing Time (minutes) 1 2 0.5 2 1 2 2.6 2 2.58 2.25 1.53 1 2 1.08 Total Tracking (in minutes) 23 42 10.5 25.5 8 9 24.4 11.5 10.38 17.25 8.36 12 10 45.36

9 Approval for assessment Walking Time (minutes) 0.08 0.05 0.08 0.05 0.08 0.08 0.17 0.17 0.08 0.17 0.17 0.05 0.08 0.25 Waiting Time (minutes) 0.75 0.77 0.83 0.5 0.92 0 0 1 0 0 0 0 2 0 Processing Time (minutes) 0.5 1 0.67 1 0.67 1 0.67 0.75 0.75 0.58 0.55 0.33 2 2 Total Tracking (in minutes) 1.33 1.82 1.58 1.55 1.67 1.08 0.84 1.92 0.83 0.75 0.72 0.38 4.08 2.25

10 Assessment & Billing Walking Time (minutes) 2 0.083 0.92 3 1 0.67 3.5 1.27 1.33 1.33 1 2.5 3 1.12 Waiting Time (minutes) 5 8 6 5 16 15 2 2.33 15.37 5.58 11 2 45 29.05 Processing Time (minutes) 1 3 2 2 3 5 22 6.95 3.25 2.53 2.38 4 3 2.27 Total Tracking (in minutes) 8 11.083 8.92 10 20 20.67 27.5 10.55 19.95 9.44 14.38 8.5 51 32.44

11 Payment Walking Time (minutes) 0.08 0.08 0.15 0.25 0.25 0.17 0.25 0.08 0.08 0.08 0.17 0.17 0.25 0.17 Waiting Time (minutes) 2 5 3 20 20 30 45 35 12.2 22 19 0.17 30 19.53 Processing Time (minutes) 4 5 4 7 5 6 4.5 3.62 2.9 3.87 5 3 3 5.27 Total Tracking (in minutes) 6.08 10.08 7.15 27.25 25.25 36.17 49.75 38.7 15.18 25.95 24.17 3.34 33.25 24.97

12 Issuance of Permit Number Walking Time (minutes) - 0.83 - - - - - 1.07 - - - 1.5 - - Waiting Time (minutes) - 0 - - - - - 1.03 - - - 1.67 - - Processing Time (minutes) - 2 - - - - - 0.8 - - - 2.5 - - Total Tracking (in minutes) 0 2.83 0 0 0 0 0 2.9 0 0 0 5.67 0 0

13 Bacolod Traffic Authority permit Walking Time (minutes) - 10 - - - - - 7.05 - - - 12 - - Waiting Time (minutes) - 15 - - - - - 20 - - - 45 - - Processing Time (minutes) - 3360 - - - - - 3360 - - - 3360 - - Total Tracking (in minutes) 0 3385 0 0 0 0 0 3387.1 0 0 0 3417 0 0

14 Building permit Walking Time (minutes) 0.17 - 0.17 0.25 0.25 0.5 8 - 0.25 0.25 7.67 - 0.5 7 Waiting Time (minutes) 4 - 5 6 5 8 7 - 3.38 4.07 8.38 - 8 3 Processing Time (minutes) 7 - 30 1 18 3 3.5 - 1.87 3 2 - 2.5 3.05 Total Tracking (in minutes) 11.17 0 35.17 7.25 23.25 11.5 18.5 0 5.5 7.32 18.05 0 11 13.05

15 Fire clearance


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Walking Time (minutes) 7 - 8 7 8 9 0.25 - 6.75 7.03 0.25 - 8 0.17 Waiting Time (minutes) 0 - 0 0 0 0 1.5 - 2.28 1.12 8 - 3 0.28 Processing Time (minutes) 85 - 29 75 3 30 3.5 - 3.4 4.03 2.5 - 3.5 3.37 Total Tracking (in minutes) 92 0 37 82 11 39 5.25 0 12.43 12.18 10.75 0 14.5 3.82

16 BIR clearance Walking Time (minutes) 0.17 - 0.45 0.25 0.17 0.25 - - - - 0.5 - 0.45 - Waiting Time (minutes) 1.5 - 3 4 9.5 4 - - - - 7 - 9 - Processing Time (minutes) 5 - 3.5 6 8.5 5 - - - - 5.5 - 4.5 - Total Tracking (in minutes) 6.67 0 6.95 10.25 18.17 9.25 0 0 0 0 13 0 13.95 0

17 DTI registration Walking Time (minutes) 12.45 - 14.5 21 15 13 - - 16 - 20 - 21 - Waiting Time (minutes) 1.5 - 2 3.5 2.45 0 - - 3 - 6 - 3 - Processing Time (minutes) - - 8 - 6.45 8 - - 9.5 - 10 - 12 - Total Tracking (in minutes) 13.95 0 24.5 24.5 23.9 21 0 0 28.5 0 36 0 36 0

18 Property Index Number Walking Time (minutes) 2 - 1.5 1 1 0.83 2.5 - 0.5 2.07 1.25 - 1.5 1.5 Waiting Time (minutes) 6 - 4 5 3 3 2.5 - 7 3.03 5 - 5 6 Processing Time (minutes) 1.5 - 7 2 1 1 5.45 - 5.38 1.65 3 - 4.67 8.5 Total Tracking (in minutes) 9.5 0 12.5 8 5 4.83 10.45 0 12.88 6.75 9.25 0 11.17 16

19 SSS clearance Walking Time (minutes) 8 7 8 0.25 10 7 - - 18 1 - 13 8 7.5 Waiting Time (minutes) 5 5 12 20 10 8 13 - 10 6 5 6 3 3 Processing Time (minutes) 1 0.67 2 2 2 4 7.5 - 3 3.03 2 4 3 2 Total Tracking (in minutes) 14 12.67 22 22.25 22 19 20.5 0 31 10.03 7 23 14 12.5

20 Issuance of claim stub Walking Time (minutes) 1.5 1.5 0.08 0.75 0.83 1 2 - 0.45 0.17 1 0.17 1.05 0.17 Waiting Time (minutes) 6 5 6 8 5 7 6 - 2.28 7.43 2 2.45 4 2 Processing Time (minutes) 5 6.25 1 1 2 2 4 - 1.03 1.27 0.75 2.02 3.5 0.67 Total Tracking (in minutes) 12.5 12.75 7.08 9.75 7.83 10 12 0 3.76 8.87 3.75 4.64 8.55 2.84

21 Preparation & Issuance of Permit Walking Time (minutes) - - 0.17 - - - - - - - - - - - Waiting Time (minutes) - - 9 - - - - - - - - - - - Processing Time (minutes) 3360 4800 480 3360 4800 4800 3360 - 3360 4800 4800 4800 4800 4800 Total Tracking (in minutes) 3360 4800 489.17 3360 4800 4800 3360 0 3360 4800 4800 4800 4800 4800


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ness Licensing Procedures Time and Motion Study 63

Attachment 16: Number of Steps, Total Time Spent for all Steps, Total Backtracking per Applicant

R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12 R13 R14 Number of steps from start to finish or start towards completion 19 16 19 19 19 19 19 13 19 19 19 16 19 19 Number of minutes devoted for all steps undertaken

a. Walking Time (minutes) 91.17 106.753 0 0 0 0 0 0 0 0 1.5 11 0 0b. Waiting Time (minutes) 35.08 47.2 61.54 99.22 54.33 42.92 66.15 26.48 59.03 69.03 55.74 60.55 71.33 129.87

c. Processing Time (minutes) 3500 8194.87 62.4 84.92 75.12 84.98 95.85 66.36 59.71 77.73 82.21 58.29 136 68.49

Total Tracking (in minutes) 3612.3 8348.82 706.13 3691.55 4988.57 5012.88 3600.96 3477.45 3526.99 4995.56 4998.03 8303.01 5069.08 5043.06Total Tracking (inhours) 60.205 139.147 11.7688 61.5258 83.1428 83.548 60.016 57.9575 58.7832 83.2593 83.3005 138.384 84.4847 84.051

Frequecy of a particular document goinf back for a. signature of a particular person b. lack of required documentation 1 1 c. computational errors by the service providers d. incorrect step taken due to misdirection 1 1 e. designed backtracking 5 6 5 5 5 5 5 4 5 5 5 6 5 5 Total Backtrack 6 7 6 7 6 6 7 5 6 6 6 7 6 8

SMEDSEP-Busi

Appendix 1 Breif History and VMG of Bacolod City ∗The first settlers of Bacolod were migrants from the surrounding areas of Iloilo then called “Irong-Irong.” From a mere community settlement in the “buklods” (hills) in the year 1770 with only a little over 5000 inhabitants, the city has grown into a fast developing metropolis with a population of 429,076 in 2000. Adherent to this growth was a series of historical transformations. a) 1800 - Transfer of capital from old Himamaylan to Bacolod after the

assassination of the then Negros Island Governor Don Juan Nepomuceno de Cordova.

b) 1848 - Bacolod was named capital of Negros Province. c) 1938 - Bacolod was proclaimed as chartered city by virtue of

Commonwealth Act No. 404. d) 1984 - Bacolod was classified as a Highly Urbanized City. On

September 27, 1984, by the provision of Section 166 and 168 of the Local Government Code and the DILG Memo Circular No. 83-49.

e) 1997 - Bacolod City was awarded by the Progressive Alliance of Citizens for Democracy and the Department of Interior and Local Government as the most Outstanding City in Community Development in Western Visayas.

f) 1997-98 - Adjudged as the Cleanest and Greenest Highly Urbanized City in the Philippines.

g) 2000 - Adjudged for the third time as the Cleanest and Greenest Highly Urbanized City in the Philippines. (Hall of Fame)

h) 2001 - 2nd Place Most Livable City – Medium Size Category; 3rd Place – Top Cities in Terms of Lowest Cost of Doing Business.

I) 2003 - Most Competitive and Most Livable Mid-Sized City in the Philippines.

Along with these transformations the City emerged as the prime city of the province. a) The seat of administration and decision-making. b) The center of trade, commerce and industry. c) The center of education.

d) The center of facilities and services such as light, water, communication and transport services.

The City’s Mission focuses on a holistic approach to the development of its residents and provision of good government anchored on the principle of honest governance where government service is for the good of the greatest number. It is also the mission of the City to encourage people’s participation in governance thus enabling them to attain self-reliance and self-sufficiency. Specifically, the City’s Mission is anchored on the following:

1. access to basic social services;

∗ From Bacolod City’s Socio-Economic Profile 2003.


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2. sustainable and balanced economic growth and productivity that address environment protection and conservation;

3. people’s participation in the affairs of city governance through community consultation, thus, enabling them to attain self-reliance and self-sufficiency in order to elevate their financial and social status consistent with the over-all thrust of improved quality of life for every citizen.

Its vision is to see Bacolod as a modern city, where investments provide employment opportunity to all Bacoleños for the improvement of their standard of living and achievement of the national government’s thrust of improved quality of life for every Filipino. A City where the men, women and children, youth, elderly, the disabled, and those who are distressed can have access to basic social, economic and infrastructure services. A City where government officials provide an honest and transparent leadership; where peace, harmony and unity of the people and the government officials is maintained to achieve development and progress for the “greatest good of greatest number”.


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Appendix 2 Researcher’s Daily Field Account

(as related by Joy Aceron, Field Researcher)

• January 19, 2005. This was the day of my flight to Bacolod City. To facilitate my field research arrangements, I sent a communiqué to the contact person, Atty. Ely Aragon, and also talked to Mrs. Ardis Jaculina, head of Permits and License Division. I informed them of my tentative research itinerary and the secondary materials/ data that I would need.

• January 20, 2005. As early as 7:30 in the morning, I was at the Bacolod City Hall to do preliminary observations on the physical layout of the city’s business licensing. Unfortunately, I did not see any instructions posted in front of the City Hall on how to apply or renew permits. Even a simple information board on where the application and renewal of business permits takes place was nowhere to be found. As I went around the City Hall premises, I only found a simple diagram on TRACS posted beside the door of the Permits and Licenses Division located at the second floor. Just the same, this did not give clear instructions on how to go along with the application or renewal.

I met with Atty. Aragon and Mrs. Jaculina at around 9:00am where I was oriented on the standards and guidelines set for the business licensing procedure. Here, we also touched on some problems and challenges confronted in putting a “one-stop-shop.” This was also when I found out that though the original plan was to have a one-stop-shop, this was not implemented due to some technicalities, one of which was the difficulty of moving the computers to a different site. As a result, instead of a one-stop-shop, there were three major sites or centers where business licensing took place: (1) the City Treasurer’s Office (CTO) located at the first floor of the City Hall proper, (2) the City Mayor’s Office - Permits License Division (CMO-PLD) office, located at the 2nd floor of the City Hall proper, and (3) the BAY Center or the Bacolod Arts and Youth Center, which is a basketball court that is 7-12 minutes walk away from the City Hall proper. This day, after getting some of the secondary materials I needed, particularly the process flowchart that serves as the standard, I immediately started tracking the applicants.

• The succeeding days, January 21, 24-29, I tracked selected applicants while conducting interviews and acquiring the secondary materials I needed.

I, along with a Research Assistant, tracked a total of 14 applicants: 4 new and 10 old applicants. 13 of them completed all the necessary steps to acquire a permit, although none were able to get their official permit yet (7-10 days processing), while the remaining applicant was still in the process of completing all the requirements. Below was the schedule of the interviews I conducted: January 21, 2005. Interview with an officer of the Bacolod Traffic Authority (BTA) to find out the basic procedures needed to acquire clearance from their office. January 24, 2005. Interview with three Accounting Offices. After finding out that most of the big business establishments have their permits renewed by accounting offices, I visited some of these accounting offices to ask their opinion about the business licensing procedures of the City Hall. These accounting offices were Tan-Dionela & Associates, Pao Accounting Office and Lisondra Accounting Office. All of the liaison officers of these accounting offices feel satisfied with the licensing procedure of the City Government, zeroing in the presence of their “kakilala,” which make life for them easier when they renew business permits. Although, additional requirements and small changes in the processes every year can be confusing and disorienting, they said. I also asked the usual cause of delay. They identified the inspection conducted by the building and fire departments (for building and fire clearance) and the city health office (for sanitary permit) as reasons why release of permits takes some time. January 25, 2005. Interview with officers of the City Planning and Development Office and the Philippine Information Agency based in Bacolod. I asked for the profile of Bacolod and other secondary materials. From the PIA, I asked about the media campaign launched to promote the business licensing this year. January 26, 2005. Interview with an officer of the Bacolod City Police Office and DTI while monitoring the process/ procedures in getting permit/ clearance from their offices.

January 27, 2005. Interview with a City Health Officer while monitoring the process/ procedure involved in getting a health certificate and sanitary permit.


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B.Ormoc Business

Licensing Findings and Recommendations

Ormoc Business Licensing Findings and Recommendations

List of Acronyms

Ormoc Study ABC Association of Barangay Captains BTA Bacolod Traffic Authority BIR Bureau of Internal Revenue BNR Business Name Registration BTPC Business Tax Payment Certificate BTRCP Bureau of Trade Regulation and Consumer Protection CA City Administrator CFD City Fire Department CHD City Health Department CHO City Health Officer CLUP Comprehensive Land Use Plan CMO City Mayor’s Office CPDO City Planning and Development Office CT City Treasurer CTO City Treasurer’s Office CZDB City Zone Development Board DOLE Department of Labor and Employment DTI Department of Trade and Industry EO Executive Order IRA Internal Revenue Allotment IRR Implementing Rules and Regulations LGU Local Government Unit LO Licensing Officer NGAs National Government Agencies OBO Office of the Building Official OR Official Receipts OSS One-Stop Shop PLD Permits and Licenses Division SEC Securities Exchange Commission SP Sangguniang Panglunsod SSS Social Security System TP Taxpayer (or business establishment/enterprise seeking to register) TRACS Tax Revenue Assessment Collection System VMG Vision, Mission, Goals APPENDICES

Appendix 1 Brief History and VMG of Ormoc City APPENDIX 2 Researcher’s Daily Field Account

1. Methodology and Narrative of Field Research Activities There were four major activities undertaken during the field research, namely: selection of respondents, actual tracking of applicants (respondents), key-informant interviews with LGU officials involved in business licensing, the applicants and accounting offices and gathering of secondary data. Field research took place from January 20- February 21, 2005. See Appendix. Researcher’s Daily Field Account. Selection of Sample Applicants Applicants taken as study samples were randomly selected, although good representation based on the following criteria were taken into account:

• nature of business • size of business (micro, cottage, small, medium, large) • type of applicant (new or old) • kind of applicant (owner, liaison, relative, others)

Table 1.1

Micro Small Medium Large Industry Class Nature of Business

NEW OLD NEW OLD NEW OLD NEW OLD

TOTAL

Retail/ Wholesale Trade 4 10 14Community/ Social/ Personal Services

Transportation & Communications 1 1 2Electricity, Gas & Water 1 1Financing, Insurance, Real Estate & Business Services

Construction Industries 2 2Manufacturing Industries TOTAL 19

ORMOC CITY’S BUSINESS LICENSING PROCEDURES

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Sampling was based on the arrival of clients in the permits office as they process their papers. Only 6 clients were tracked during the period of January 24-31 and the rest (13) were tracked on February 14-21, 2005. Since there is no One Stop Shop (OSS) in Ormoc, there were ten venues where the researcher waited for possible sample applicants, namely: Permits Office, City Treasurer’s Office (CTO), Fire Department (FD), City Health Office (CHO), City Engineer’s Office (CEO), City Planning and Development Office (CPDO), DTI, SSS, Philhealth and Pag-ibig Offices. Actual Tracking of Applicants The researcher, upon getting the consent of the applicant, followed the latter throughout the entire processing of permits. As much as possible, the researcher avoided interacting with the applicant so as not to affect the result of the time tracking. Also, the researcher avoided helping the applicant even if the latter was about to take a wrong step or was already committing a mistake. Using a stop-clock, the researcher timed the following: 1) walking time, which was the time spent going from one step to another; 2) waiting time, the time when the applicant waited for his/her turn; and 3) processing time, which start from the time the applicant was entertained by the service provider up to the point when the applicant left for the next step. Specific actions per step, forms and signatures required and fees were documented. Also, the unnecessary actions of the service provider were noted, along with the manner service was provided. In cases when the applicant decided to continue the next day, the researcher asked for the contact number of the applicant or set an appointment with him/her. Clients were also attempted to be tracked by going through the various offices and get the transaction times in each. The City Health Office, SSS, DTI, Phil Health, Pag-Ibig offices were visited at various times during fieldwork period to track clients having their applications processed. The table below shows the number of clients that were tracked during the observation period. Interviews Qualitative data used in the study were gathered through key-informant interviews. The qualitative questions such as the level of satisfaction and recommendations to improve the business licensing process were asked after the applicant finished the processing of his/her application. Other qualitative data were gathered from key informant interviews i.e., five bookkeepers/owner applying for mayor’s permits. Additional information were also gathered through the Validation Workshop/Focused Group Discussion held last Feb 14 2005 at Big Roy’s Place, Ormoc City, which was attended by fifteen (15) bookkeepers and business owner invited by the DTI. Another Focused Group Discussion held Feb 16

70

2005 at Pongos Hotel attended by four(4) bookkeepers and three (3) owners of businesses was also conducted to get additional information. (See Annex 3.) Gathering of Secondary Materials Data gathering were made on February 18-21 for additional data. Offices visited to gather data were the city engineering office, fire department, city health office, permits office, city treasurer’s offices, SSS, Phil Health, DTI, and Pag-Ibig. The economic profile of the city was provided by the City and Development Planning Office, the Permits Licensing and Franchising Office both from the Local Government Unit of Ormoc City. Data on new businesses investing in Ormoc City were provided by the Regional Office of the Department and Trade Industry of Region 8. Limitations of the Study The major limitation of the study was the fact that the researcher arrived in Ormoc on the last day of assessment and payment of assessments without penalties, which was on January 20 2005. There was no extension given since according to Mr. Tingson, head of the Permits Office of Ormoc City, there was no request from the different business groups. It was the first time in Ormoc City’s history that there was no extension in the assessment and payment of business taxes and fees. This resulted to the very limited number of clients tracked by the researcher during the observation period. Besides the very limited number of clients arriving and thus tracked, the venue where all the other agencies (Phil Health, Pag-Ibig) and the LGU’s departments (Fire and Zoning) that were gathered together in front of the Ormoc Superdome, which was 5 minutes walking distance away from the City Hall, was already dismantled by January 20th. Before the observation period, there was a venue where the agencies (SSS, Phil Health, Pag-Ibig) and departments of the local government unit (Fire, Engineering Zoning) were pooled together as a One Stop Shop (OSS). This was said to be located at the lobby of the Ormoc Superdome. This was the Ormoc City government’s effort to make the application for business permit easier for the businesses owners of the city. But this was for set up for a limited time only which was up to January 20. During the observation period, only few clients were processing their applications and in the different offices and agencies, both for new businesses and businesses renewing their licenses. It was also observed that applications were being processed in staggered days, which meant different steps were being accomplished in different days. Processing is not necessarily being done in one continuous series of steps in the shortest possible time. The data from observations were thus very limited because of this observed client behavior in processing their applications. 2. Findings a. Economic Profile of Ormoc City Total population of Ormoc City is about 168,569 with an estimated annual growth rate of 2.14%. The City is primarily has a rural population. Thirty-two percent (32%) of the current total population is concentrated in the urban barangays and the rest of the population are distributed in the rural areas. There is a total of 110 barangays in Ormoc

City, twenty-nine (29) located at the city proper and classified as urban barangays while eighty-one (81) are classified as rural barangays. Agriculture is the dominant land use in the city. Agricultural land comprises 56.64% or 26, 298.29 hectares of the total area of Ormoc City. Forest areas total 15,034.87 hectares or 32% of the total land area. Built-up uses (residential, commercial, institutional areas, functional open spaces and roads) constitute 5.75% or 2,672.80 hectares. The rest, which totals 2,424.08 hectares or 5.22% of total land area, are considered special use areas which is composed of industrial areas, the Ormoc Township, airport, mangrove, swamps, mineral areas and open grasslands. For 2004, the employment rate stood at 70.02% based on the labor force population if 102,211. Employment was primarily in these major fields:

Table 2.1 classification percentage

Agriculture 45.25Fishing 25.30Service 12.59Trading 7.50Manufacturing 5.10Industry 4.26

The following shows the agricultural, livestock, fishing productions of Ormoc City based on the data gathered from the 2004 Ormoc City Profile as compiled by the City Planning and Development Office. Agriculture

Table 2.2

Crop Production Area Planted (hectares)

Sugar cane (picul) 880,504 14,171Palay (Metric Tons) 37560.20 9,600Coconut (Metric Tons) 3688 3,029Vegetables and Rootcrop (Metric Tons) 758.20 240

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Livestock

Table 2.3

Type of Livestock Population Production (Metric Tons)

Cattle 2265 271.55Carabao 2515 500.61Swine 26598 1,401.58Poultry 3075593 3,308,754.00Goat 1020 4,554.00

Fishing Fishing Areas: Ormoc Bay, Carigara Bay, Albuera Bay Fish Ponds : 68 hectares Annual Fish Production: 55 metric tons Besides its abundant marine and agricultural resources, one of Ormoc City’s important resource is the presence of the Tongonan Geothermal Field whose energy is being harnessed by the Philippine National Oil Corporation. It currently generates 752.5MW with a potential reserve of 1000MW. Electricity is transmitted by the National Power Corporation and is distributed by Leyte Electric Cooperative. Ormoc City is also the transportation hub with a national highway traversing through the city linking Luzon and Mindanao. It is also a transportation hub for the province of Leyte linking the city with the other municipalities of the province. The Ormoc City Seaport exists which can accommodate passenger, light to medium cargo ships and fast craft ferries. A fast craft ferry service currently serves plying the Ormoc-Cebu City route.

Table 2.4 Local Government Revenue Sources

YEAR LOCAL REVENUE

INTERNAL REVENUE

ALLOCATION (IRA)

TOTAL PERCENTAGE OF LOCAL

REVENUE TO TOTAL

INCOME

2000 73,525,708.67 315,907,375.00 389,433,083.67 18.18% 2001 77,238,490.25 282,115,026.00 359,353,516.25 21.49% 2002 87,147,078.52 312,865,604.58 400,012,683.10 21.78% 2003 161,453,269.18 313,395,106.00 478,848,375.18 33.71% 2004 N/A N/A N/A N/A

The above table shows that the percentage of local revenues from the total income of the city have been incrementally increasing from 2000-2003 and surge can be seen from

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the period of 2002-2003 registering an increase 11.93% as compared to the incremental increase of 3.31% for 2000-2001 and 0.29% for 2001-2002.

Table 2.5 Business Permit Issuances*

YEAR NEW RENEWAL TOTAL ISSUANCES TERMINATION

2000 N/A N/A 2628 N/A 2001 230 2671 2901 24 2002 310 2048 2358 70 2003 274 2020 2294 109 2004 295 2318 2613 115

(*based on available data from permits office, Ormoc City) Based on the above table, there had been a steady increase in the number of terminations in businesses in Omoc City. But this had been off set by greater number of new business applications from 2001-2004. It would be noted though that there was a big drop in total number of issuances from the period 2002-2003. As seen from the figures, it can be inferred that the drop in business license issuances can be attributed on the non-renewal of licenses during the period. This may mean that the business which did not renew their licenses may have terminated operations without informing the Permits Office of their termination.

Table 2.6 Number of New Businesses Established in Ormoc City*

1997-2001 2002 2003 Asset Size Classification

No. of Enterprises

Total Capitalization No. of Enterprises

Total Capitalization

No. of Enterprises

Total Capitalization

Micro 26 5,235,500.00 32

2,179,002.00 375

58,311,928.00 Small

2 22,462,000.00 0

- 3

349,518,935.00 Medium

3 130,278,000.00 0

- 0

- Large

1 14,254,772,000.00 0

- 0

- total 32 14,412,747,500.00 32

2,179,002.00 378

407,830,863.00

(*DTI Region 8 Office data is based on New business Registration) The asset size classification used by the Department of Trade and Industry is based on the Republic Act 9178 otherwise known as the Barangay Micro Business Enterprise Law, which classified businesses according to the following criteria:

Asset Size Classification Capitalization

(P)micro 3,000,000 and belowsmall 3,000,001 – 15,000,000

medium 15,000,001- 100,000,000large 100,000,001- upwards

Comparing the data on new business applications gathered from the Permits Office, which based on mayor’s permits applications and that from the Department of Trade and Industry, whose records are based on New Business Name registration, there is a difference in the numbers. It can be inferred from the difference in the data that the new businesses which applied for new business permits were mostly in the micro-scale where a business name is not required like market vending and selling.

Table 2.7: Business Classification and Issuances of licenses*

2000

2001

2002

2003

2004

Retailers/Wholesalers n/a 1918 1149 1360 1115

Bank and Other Financial Institutions n/a 52 108 147 95

Contractors/Manpower Services n/a 45 673 577 1341

Manufacturers n/a 15 25 67 62

Others n/a 54 105 117 n/a (*based on available data from the Permits Office, Ormoc City)

Based on the issuances of permits, it is in the retailer/wholesalers and contractor/manpower service sectors which showed a continued growth from 2001-2004. While the other two sectors, banking and manufacturing, showing a drop in permits applications. This is also reflected in the income trends for the different sectors as shown in the table below.

Table 2.8 Gross Annual Income per Sector *

2002

2003

2004

Retailers/Wholesalers 1,550,592,719.00 19,281,380.42 2,038,684,779.00

Bank and Other Financial Institutions

449,019,040.70 1,440,948,630.00 242,836,872.20

Contractors/Manpower Services 468,643,823.50 446,405,832.20 2,200,355,161.00

Manufacturers 460,762,382.60 472,539,122.80 703,026,247.00

year

classification

year

classification

(*based on available data from the Permits Office, Ormoc City)

Both retailer/wholesaler and contractor/manpower services sectors registered the highest increases in gross incomes for the year 2004 from 2003 though the manufacturing sector registered a steady increase in gross income from 2002-2004.

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B. Business Licensing Standard Operating Procedure

Shown below is the business licensing process flow chart for the renewing business establishments and the for new business establishments. Also included are the requirements for each in acquiring their licenses.

Stream-lined Application Procedure 2002 Ormoc City

Renewal ( No Application Form)

Step 2 TREASURER’S

OFFICE Payment of Taxes Fees and Charges

Step 3 PERMIT OFFICE

Issuance of Permit

Step 4 MAYOR’S OFFICE Approval/ Signature of City

Step 5 PERMIT OFFICE Release of Permit


Assessments of Taxes, Fees and

Charges due Requirements

1. Previous year’s Mayor’s Permit including receipt of payments 2. Brgy. Clearance 3. Declared Gross Income

New Business

Step 2 ENG’G OFC

HEALTH OFC ZONING OFC FIRE DEP’T

CLEARANCES

Step 3 TREASURER’S

OFFICE Payment of Taxes, Fees and Charges

Step 4 PERMIT OFFICE Issuance of Permit

Step 5 MAYOR’S OFFICE

Approval/ Signature of City Mayor


Assessment of Taxes and Fees

Requirements

1. Brgy Clearance 4. Pag-ibig Clearance 2. SSS Clearance 5. Phil Health Clearance 3. DTI Clearance

C. Observed and Documented Business Licensing Based on what had been observed, the process is not a linear process. The actual observed flow is shown below with the number of personnel per unit indicated. For the Renewal of licenses for business establishments, the table below outlines the steps the client would follow in getting the mayor’s permit based on the flow chart provided. For businesses renewing their licenses, they do not require any application form. 75

76

Agency/Office Step /Procedure Documents Required Personnel /Unit Involved in

Process Barangay Office Payment of clearance

Get barangay clearance requirements varies from barangay to barangay: business TIN, previous year’s mayor’s permit, DTI clearance are the usually requirement asked

Barangay Captain Secretary Treasurer

Fire Department Get Fire Safety Assessment

previous year’s mayor’s permit with receipt

Assessor

Permits Office Assessment of Business Taxes and Fees

barangay clearance, previous year’s mayor’s permit and receipt, declared gross income, and fire dep’t assessment

4 Assessors 2 Encoders 4 Clerks

Licensing Cashier, City Treasurer’s Office

Payment of Assessed Taxes and Fees

Encoded Assessment form 1 Cashier

Waterworks Section, City treasurer’s Office

Check for water bills Encoded Assessment Form Revenue Officer Clerk

Land Tax Section, City Treasurer’s Office

Check for land tax arrears Encoded Assessment form Revenue Officer Clerk

City Treasurer, City Treasurer’s Office

Approval of Assessment Encoded Assessment form, cedula, receipt

Revenue Officer city treasurer

Fire Department Get Fire Safety Inspection Certificate

Receipt of Payment of Assessed fees, Inspection Report

Fire Marshall 6 Fire Safety Inspectors

City Health Office Get Sanitary Health Permit Assessment Form, Receipt, Health Cards of all employees

City health Officer 2 Sanitation Officers 5 Physicians

DTI Get DTI Clearance Photocopy of DTI Certificate

Branch Manager clerk

SSS Get SSS Clearance Receipt of Last Payment Branch Manager 5 Accounts Officers

Phil Health Get Phil Health Clearance Receipt of Last Payment Branch Manager 6 Accounts Officers

Pag-Ibig Get Pag-Ibig Clearance Receipt of Last Payment Branch Manager 1 Records Custodian

Permit’s Office Issuance of Mayor’s Permit Assessed form with receipt with all accomplished clearances, Sanitary Health Permit, Fire Safety Inspection Certificate

From the flow chart showing the process lines indicating which offices to proceed, two starting points were indicated. One starting from the permits office where the client is assumed to ask for information in renewing the mayor’s permit, the other starting point is at the acquisition of clearances from the DTI, SSS, Phil health and Pag-Ibig. This is so since the client may proceed in getting the clearances from these offices even before the client can have his assessments done. The client may choose to get the clearances at anytime during the processing period.

In getting the Fire Safety Inspection Certificate and the Sanitary Health Permit, the only pre –requisite is that the client has already paid the assessed fees and taxes. The client may choose to get the certificate and permit in any order according to the convenience of the client.

Actual Observed Flow of the Renewal of Mayor’s Permit

Permits Office Fire dept

City Health Office

SSS

Phil Health

Pag-Ibig

DTI

Barangay

land tax

land tax cashier

water billing cashier

water

licensing cashier

City Treasurer

end

start

start

Mayor’s Office

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For new businesses, the steps followed are outlined in the table below, including the number of personnel per office/unit:

Agency/Office Step /Procedure Documents Required

No. Personnel per Unit Involved

Barangay Office Payment of clearance Get barangay clearance

requirements varies from barangay to barangay: business TIN, DTI clearance are the usual requirement asked

Barangay Captain Secretary Treasurer

Fire Department Get Fire Safety Assessment

New Business Application Form

Assessor

Permits Office Assessment of Business Taxes and Fees

barangay clearance, new business application form, and fire dep’t assessment

4 Assessors 2 Encoders 4 Clerks

Licensing Cashier, City Treasurer’s Office

Payment of Assessed Taxes and Fees

Encoded Assessment Form

1 Cashier

Waterworks Section, City treasurer’s Office

Check for water bills Encoded Assessment Form

Revenue Officer Clerk

Land Tax Section, City Treasurer’s Office

Check for land tax arrears

Encoded Assessment Form

Revenue Officer Clerk

City Treasurer, City Treasurer’s Office

Approval of Assessment Encoded Assessment Form, Receipt, Cedula

Revenue Officer City Treasurer

Lawyer’s Office Subscription New Business Application Form

1 Clerk Lawyer

City and Planning Development Office (CPDO)

Zoning Clearance Business Application Form, receipt of payment

CPDO Coordinator 3 Zoning Officers

City Engineer’s Office Engineering Clearance Business Application Form, receipt of payment

City Engineers 5 Bldg Inspectors/Engineers

Fire Department Get Fire Safety Inspection Certificate

Receipt of Payment of Assessed fees, Inspection Report

Fire Marshall 6 Fire Safety Inspectors

City Health Office Get Sanitary Health Permit

Assessment Form, Receipt, Health Cards of all epmployees

City health Officer 2 Sanitation Officers 5 Physicians

DTI Application for New Business Name Get DTI Clearance

Photocopy of DTI Certificate

Branch Manager clerk

SSS Application for SSS membership Payment of Initial Contribution Get SSS Clearance

Receipt of Last Payment Branch Manager 5 Accounts Officers

Phil Health Application for Phil Health membership Payment of Initial Membership Get Phil Health Clearance

Receipt of Last Payment Branch Manager 6 Accounts Officers

Pag-Ibig Application for Pag-Ibig Receipt of Last Payment Branch Manager


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membership Payment of Initial Contribution Get Pag-Ibig Clearance

1 Records Custodian

Permit’s Office Issuance of Mayor’s Permit

Assessed form with receipt with all accomplished clearances, Sanitary Health Permit, Fire Safety Inspection Certificate

Actual Observed Flow for the Acquisition of Mayor’s Permit for New Businesses

Mayor’s Office

Permits Office Fire dept

City Health Office

SSS

Phil Health

Pag-Ibig

DTI

Barangay

land tax

land tax cashier

water billing cashier

water

licensing cashier

City Treasurer

City Engineer’s Office

City Planning and Develoment

Office

end

start

start

The flow is very similar with that for businesses renewing their mayor’s permits with the addition of the required clearances from the City Engineer’s Office and the Zoning section of the City Planning and Development Office. In the same manner that there are two starting points, the client may chose to accomplish acquiring the clearances from the DTI, SSS, Phil Health and Pag-Ibig Offices or to begin the process at the Permit Office. The Fire Safety Certificate, Sanitary Permit, City Engineer’s and Zoning clearances may be acquired in any order convenient to the client.


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D. Assessment of Physical layout, procedures and processes Physical Lay-out During the observation period, processing was already done in the different offices where the needed clearances and requirements were to obtained by the clients. Since the barangay clearances were obtained in the clients’ respective barangays this is not included in the description and lay-out of offices. Permits Office The Permits office is located with Ormoc City Hall with a total of four assessors, including the head of the office. The head of the Permits Office responsibility is to assess the applications of the new business. An alcove used by the head of the officer in charge is located at the end of the office from the door. A chest level divider separates the alcove from the rest of the office. Just outside the alcove are three desks five feet apart, two for the assessors and one for the inspector. Situated to the right of this row, an arm length away is the two computers where the encoders work. A sofa for clients spans from the end of the alcove to the door. The sofa is placed to the wall with just enough space to provide a path direct to the alcove. The sofa is about three feet away from the desks of the assessors and inspector. Cashier, City Treasurer’s Office Only one window is provided for payments for business permits, mayor’s clearances and franchising (for tricycles and multicab vehicles). There were chairs provided in front of the windows of the City Treasurer’s Office, but it is just one row placed on the wall with enough space in the front end of the chair and the windows to provide for a walkway. Land Tax, Water Billing Sections and Treasurer’s Office These are located within the City Treasurer’s Office. Approximately 10 ft from the door entrance of the City Treasurer’s Office is the desk of the land tax revenue officer where the client would have to get the signature. The records clerk is another 10 feet away from the land tax revenue officer’s desk where the client would go to have the records check. To the right of the land tax officers desk, about 5 desks or approximately 20 feet away is the water billing section, located just outside the door of the treasurer’s office space. The records clerk and the records are located just next to the desk of the water billing revenue officer’s desk. Before going to the Treasurer’s office, the client should go to a revenue clerk whose desk is located two desks away from the water billings desk, to have the application checked for cedula. After which the client can proceed to the Treasurer’s office. There are no chairs in front of the desks and the client has to navigate through the desks of the other revenue officers and clerks working within the treasurer’s office. The city treasurer’s office has an anteroom where there is a sofa which can accommodate about 5-7 clients waiting to do business with the City treasurer. SMEDSEP-Business Licensing Procedures Time and Motion Study

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City Planning and Development Office It is located at the second floor of the city hall. The room is more spacious than the City Treasurer’s Office and there are two chairs at the zoning officers’ desk where they can be seated while they process their papers. Phil Health Office The office is located at the ground floor of the Superdome. It is just walking distance from the city hall. The reception area can accommodate up to 5 clients seated on mono block chairs. The waiting area is just inside the office as one enters the entrance of the office. A reception desk about 5-8 feet away from the entrance is located which serves as the processing counter. Department of Trade and Industry-Ormoc The office is located at the second of the Superdome. A desk is provided for the clearance clerk with two chairs for clients provided while they wait for their papers to be processed. The officer in charge’s desk is just about five feet away from the clearance clerk’s desk. it is a big room and it can accommodate up to 6 clients without crowding. Pag-Ibig Office The office is also located at the second floor of the Superdome, an office away from the DTI office. A desk is provided for where processing is done and two chairs are placed in front of the desk. A sofa which can seat 5 people comfortably is provided as clients wait for their turn. Social Security Service Office The office is located approximately 3-4 minutes away by tricycle ride from the city hall. The clearance section is located at the second floor of the building and a large desk where two service providers are seated to serve clients. Mono block chairs are provided and the space can seat up to to 10 clients at a time without crowding. Clustered in the Government Center approximately 5-6 minutes away from the city hall are the City Health Office (farthest), the City Engineer’s Office and the Fire Department. City Health Office The Sanitation and Health Services Office where the Sanitary Permit is issued is located at the second floor of the City Health Office. To the right of the office is located the cashier’s desk where clients pay for the laboratory tests. The doctor’s offices are located directly below, at the ground floor, where physical examinations are conducted for the health card. The laboratory is located in another building about 20 feet away from the back of the main building of the City Health Office. City Engineer’s Office The City Engineer’s desk, is located just 10 feet to the right of the entrance of the building. The office is a large space and the city engineer’s desk is bounded by a counter and two seats are provided in front of the engineer’s desk for clients. In case of the absence of the city engineer, the desks of the engineer’s who can sign in behalf of the city engineer is in plain view of the client upon entering the building. Fire Department The office is located at the end of the fire house. It is a small office with two desks for the clerk and the assigned assessor. The office can accommodate without crowding up to 5 clients for their assessments and issuance of safety inspection permit. SMEDSEP-Business Licensing Procedures Time and Motion Study

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Number of Steps Required According to the Permits Office flow chart, there are only five (5) steps required to get the mayor’s permit. But observed process, it takes 17 steps for getting a mayor’s permit for new businesses and a total of 14 steps for the renewal of mayor’s permits for established businesses. Travel Time The tables below show the travel time from going from one office to the next totaled 24 minutes and 10 seconds. The researchers timed himself as he traveled from one office to another to get the information below. Walking Times to from

Cashier, City Treasurer (City Hall)

City Treasurer’s Office Entrance (City Hall)

Zoning (City Hall)

Phil Health(1st Floor Superdome)

DTI ( 2nd Floor Superdome)

Pag-Ibig (2nd Floor Superdome)

Permit’s Office

20 secs 15 secs 52 secs 2mins 55secs

Phil Health 48 secs 53 secs DTI 22 secs Tricycle Ride Time to from

SSS

City Health Office

Fire Department

Permit’s Office 3 mins 5 secs 5mins 55 secs 5mins 32 secs Walking Time within Offices City Health Office

Location Time Entrance to Environmental Health Services 55 secs Environmental Health Services to Doctor’s Office 32 secs Environmental Health Office to Laboratory 45 secs SSS Office

Location Time Tricycle Stop to Clearance Section SSS Bldg. 50 secs Clearance Section to Counter 2 Ground Floor (Issuance od employer’s SSS number)

43 secs


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Accessibility of Required Forms For Ormoc City, renewal of mayor’s permits does not require application form, A barangay clearance, previous year’s mayor’s permit, and as statement of gross income are the only requirements for the assessment. For new businesses, an application form is required and printed at the back of the last page is the process, as depicted by the Permits Office. The application is given away for free but there is a problem of readability of the application form. The Permits Office gives slips of papers to clients where the information is printed as to what clearances and permits are required. Transparency in the Computation & Accountability in the Collection of Fees There were neither observed posters nor information available as to how the taxes are being computed. The clients just accept what had been computed and pay what is due to the City. Quality of Service Since data collection was started only after the peak season of processing had passed, the atmosphere in most offices was relaxed. There were only a few clients and the service providers were prompt and polite in asking the clients (“unsay ato” is an idiomatic expression equivalent to “anung atin” in Tagalog or “what do you need”) as to what they needed. Time Tracking For New Businesses Applying for a Mayor’s Permit The tables below shows the tracked time based on the observed times spent on different offices and agencies. A delay was observed in obtaining the clearance of one of the three clients tracked for SSS clearance. The client went to the SSS office twice and twice failed in getting the clearance. While another client trying to get his Sanitary Permit to Operate also was not able to obtain it because of the lack of requirements. In both cases, the researcher was not able to observe when the clients went back to obtain the clearance and permit for their mayor’s permit. For established businesses renewing their mayor’s permits, the table below shows the tracked time based on the observed times spent.


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Office/Agency Specific activity/activities

backtrack waiting time hr:min:sec

processing time hr:min:sec

tracked time hr:min:sec

assessment1 00:06:06 Permits and Licensing Office encoding1 00:06:35

00:12: 41

payment2 00:11:45 00:05:44 00:06:09 00:23:38 land tax2 00:01:30 00:01:30

water clearance2 1:03:20 00:07:15 1:10:35

City Treasurer’s Office

check cedula signature of treasurer3

00:01:45 00:00:33

00:02:13

Phil Health get clearance4 00:05:43 00:05:43

Pag-Ibig get clearance5 00:03:00 00:03:00

DTI get clearance6 00:03:30 00:07:21 00:10:41

SSS get clearance7 00:58:50 00:09:05 00:06:48 00:15:53get health cards 8 00:03:22 00:03:22physical exam8 00:01:38 00:02:13 0:03:51

City Health Office

issue permit9 00:06:28 00:6:28Total 2:19:10 00:16:27 00:58:03 3:14:30

*average time based on 3 clients, the rest are based on times by different clients applying for clearances at agencies **only a health card was acquired and no sanitary permit issued because the client forgot to bring his papers Effect Categories of

Cause(s) Delayed processing of form


Specific Description of Cause(s)



procedure delinquency of payments

advised the client to pay SSS dues

paid the dues SSS Clearance

procedure unregistered employees

advised the client to register employees

has yet to comply with the registration

Sanitary Health Permit

Information Failure to bring Assessment Forms, Receipt

Requested Client to Return with the necessary documents

Client went home but was not observed when the client accomplished obtaining the permit


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For Established Businesses Renewing Their Mayor’s Permits The tables below shows the tracked time based on the observed times spent on different offices and agencies. Office/Agency

Specific activity/activities

waiting timehr:mins:secs

processing time hr:mins:secs

tracked time hr:mins:secs

assessment 9:20 Permits and Licensing Office encoding

5:50

5:30

20:30

Phil Health get clearance 6:09 6:09

Pag-Ibig get clearance 5:25 5:25

DTI get clearance 12:04 12:04

SSS get clearance 18:11 8:20 26:31*

City Health Office get health cards, issue sanitary permits

18:47 12:24 31:11**

Total 42:48 59:42 1:42:30 1average time based on 4 different clients 2average time based on 3 different clients 3average time based on 3 different clients 4average time based on4 different clients 5 average time based on 2 different clients 6 average time based on 2 different client 7average time based on 2 clients average for 3 clients who completed the green cards and just collected the Sanitary Permit 8

time of one client observed 9 average waiting time of 3 clients. Effect Categories of

Cause(s) Delayed processing of form


Specific Description of Cause(s)



Payment Material lack of money on the client’s part

told the client the exact amount owed

went back to the office to

Water clearance Procedure the index card of the client was not found

told the client to return in the afternoon

returned in the afternoon and the index card was found

DTI Clearance Information the client did not know the requirement

asked the client to photocopy

had the original certificate photocopied and went back to get clearance

SSS Clearance Procedure one of the newly hired employee’s contribution was not reflected in the employer’s records of payments

asked the client to get the SSS number of the newly hired employee

went back to the office and got the employee’s SSS number


85

All the times in the above table are based on the average times based on the number of clients who were observed to have done the indicated actions per row. There were 4 observed back tracking due to some deficiency which delayed the processing of the application. From the Average Time tables, one will notice that there were only 6 steps out of the 17 for new business applications for mayor’s permit and also 6 for renewal of mayor’s permits. For the new business application, the total time to accomplish the 6 steps, namely: assessment/encoding, clearances from the DTI, SSS, Phil Health and Pag-Ibig, the issuance of health cards/permits is 1 hour 42 minutes 30 seconds. For the renewal of mayor’s permits, the time spent in getting their assessment/encoded forms, payment, check of land tax and water billings, checking of cedula and signature of the city treasurer, clearances from Phil health, SSS, Pag-Ibig, DTI and getting the health card and issuance of sanitary permit is 3 hours 14 minutes and 30 seconds. It must be noted though that these observations were done on different days and most clients only accomplished one step during the day they were observed. The rest of the steps were either already accomplished or still to be accomplished at the convenience of the clients being tracked. Client behavior was different in Ormoc City. Most of the clients tracked only did one, or at most two steps, per day. This made it difficult to determine how much time the client spent to complete all the necessary procedures in completing the requirements. Noticing this pattern of the clients in processing their applications in staggered days, completed application forms submitted to the Permits Office, chosen randomly, were photocopied. Twenty completed forms were photo-copied and analyzed to try and confirm this pattern of client behavior. The dates of the different clearances and forms were noted down and tabulated. The earliest dates and the latest dates were also noted. From the above two tables, there were steps in the licensing procedure that was not observed. Though one client (renewal) had been observed to have completed all the requirements for the mayor’s permit, only three steps were observed before submission to the permits office. The previous steps were done very much earlier, way before the time-motion study was conducted.


86

Business Applications Photocopied from the Permits Office (with permission). Names of Businesses

1. Gemmary PawnShop and Jewelry 2. Stephen Odango Scrap Buyer 3. R. Villarmino Construction* 4. Alonsita E. Quiatchon Sari Sari Store 5. Ok for Life Store 6. VSM Southern Sales and Construction

(new) 7. JunVill Construction and Gen. Services 8. LoliPhil Gen Merchandise 9. Norkis Distributors 10. Uni-Real Trading

11. Tetet Gen. Merchandise 12. JN Pobadora Auto Repair shop 13. Asian Pension and Loan 14. Zalar Merienda Delights 15. ELJ Security ASgency and

General Services 16. Prime Asia PawnShop 17. Benjie Rice Mill 18. R Virgil Vulcanizing 19. China Banking Corp 20. American Home Video

From the twenty business applications, only R ViIlarmino Construction was a new business application. The tables below show the different dates of the different certificates and clearances of the submitted to the Permits Office for issuance of a Mayor’s Permit. The tabulations below show that the shortest interval between the earliest date when the application was started and the latest date, when the application was presumed to have been submitted at the Permits Office, was 5 days. In the 5 days, 3 days were spent in acquiring the necessary clearances for the renewal of the mayor’s permit. In contrast, the 18 working days were the biggest interval in processing the applications, with 7 separate working days spent in acquiring the different clearances and requirements in renewing the license.


87


88

Tabulated Dates on the Different Clearances, Receipts of Payment, Fire Inspection Certificates, Sanitary Permit

Brgy clrnce

eng’g* assessment

Fire assessment

fire Safety certificate

Assessment Payment receipt

land tax

waterbill CT sign

DTI Phil Health

Pag Ibig

SSS City Health sanitary permit

1 1/17 na 1/17 na 1/20 1/20 1/28 1/28 s 1/24 124 1/24 1/28 1/26 2 1/26 na ok na 1/20 1/20 1/28 1/28 s 1/26 1/27 na 1/27 ok 3 1/14 na ok 1/31 1/27 1/28 1/28 1/28 s 2/1 2/1 1/31 1/25 2/1 4 1/24 na 1/24 na 1/20 1/20 ok ok s 1/24 1/24 ok 1/24 1/27 5 1/17 na 1/17 na 1/20 1/31 2/1 2/1 s 1/18 1/19 na 1/31 1/31 6 1/20 na na na 1/20 1/20 ok ok s na 1/28 1/28 1/28 1/27 7 1/11 na 1/15 1/31 1/27 1/28 1/28 1/28 s 2/1 1/31 1/31 1/25 1/31 8 1/11 na 1/26 na 1/27 1/28 1/28 1/28 s 1/13 1/26 1/10 1/31 9 1/13 na 1/13 na 1/17 1/18 1/31 1/31 s 1/4 1/19 1/19 1/19 1/20 10 1/11 na 1/10 1/27 1/20 1/20 ok ok s 1/10 1/12 1/12 1/12 1/31 11 1/9 na na na 1/19 1/20 ns ns ns 1/24 1/20 na 1/21 1/24 12 1/14 na 1/17 na 1/19 1/20 1/21 1/21 s 1/17 1/24 na 1/28 1/31 13 1/11 1/11 1/11 na 1/20 1/20 ns ns ns dti

cert 1/7 na 1/7 1/31

14 1/6 1/6 1/6 na 1/7 1/12 ns ns ns dti cert

1/20 na 1/18 1/24

15 1/6 1/6 1/6 na 1/7 1/12 ns ns ns dti cert

1/20 1/20 1/28 1/24

16 1/19 1/19 1/19 na 1/20 1/20 1/25 1/25 na na na 1/11 1/20 17 1/17 1/10 na na 1/20 1/20 ok ok 1/31 1/27 na 1/27 1/28 18 1/8 1/7 1/7 na 2/1 2/1 ok ok nd na na 1/7 2/1 19 1/10 1/10 1/10 na 1/20 1/20 nd nd ns 1/14 1/18 na 1/12 1/18 20 1/12 na na 1/20 1/12 1/20 1/21 1/21 dti

cert 1/21 1/22 1/21 1/21

note: *engineering fees can be assessed at the permits, licensing and franchising office or at the engineering office located 5 minutes away by tricycle ride from city hall. legend: na -not attached ok – present but date is not readable ns - not signed s - signed SMEDSEP-Business Licensing Procedures Time and Motion Study

89

Date Table showing the number of separate working days it took to process the applications Businesses earliest date latest date number of working days between earliest

and latest dates number of separate days different steps

were done between the earliest and latest dates

1 1/17 1/28 9 6 2 1/20 1/28 6 4 3 1/14 2/1 18 7 4 1/20 1/27 5 3 5 1/17 2/1 11 6 6 1/20 1/28 6 3 7 1/11 2/1 15 7 8 1/11 1/31 14 7 9 1/4 1/31 18 7 10 1/10 1/24 10 6 11 1/9 1/24 11 5 12 1/14 1/31 17 8 13 1/7 1/31 16 5 14 1/6 1/24 12 6 15 1/6 1/28 16 6 16 1/11 1/25 10 4 17 1/10 1/31 15 6 18 1/7 2/1 17 3 19 1/10 1/18 6 5 20 1/12 1/21 7 4


90

ness Licensing Procedures Time and Motion Study 91

SMEDSEP-Busi

Since not all the steps outlined were observed done by the clients, data were gathered based on the recollected times spent by the clients in processing their applications. The data were obtained in two separate focused groups discussions held on Feb 14 with 15 attendees and on Feb 6 with 7 attendees. In the focused group discussion, the participants were asked to put the transaction times which means the time participants spent in lining up and up to the time they were able to process and get the necessary clearance in their applications. Two groups were formed, one representing processing of new business application for mayor’s permit and the other renewal. The participants were then asked to put the high and low times based on their experience for each of the step. For the new business applications the following table was produced:

Transaction Times per Office/Agency based on Memory Recall of the FGD Participants

(Transaction Time= Waiting Time+Processing Time)

OFFICE/AGENCY

PROCESS

High

Low

BARANGAY OFFICE CLEARANCE 1 day 25 mins FIRE DEPARTMENT ASSESSMENT 40 minutes 25mins

PERMITS OFFICE ASSESSMENT ENCODING

30 minutes 20mins

LAWYER SUBSCRIPTION 10mins

PAYMENT of assessed taxes/fees

LAND TAX WATER BILL

TREASURY OFFICE

SIGNATURE OF CT

1 day 25mins

FIRE DEPARTMENT FIRE SAFETY INSPECTION

2 days 4hrs

CITY HEALTH OFFICE

Saitary Permit to Operate

2 days 40min

ENGINEERING OFC

CLEARANCE 20mins

ZONING OFFICE

CLEARANCE 20mins 15mins

DTI CLEARANCE 3 days 5mins SSS CLEARANCE 3 days 15mins

PHILHEALTH CLEARANCE 3 days 5mins PAG-IBIG CLEARANCE 3 days 10mins

TOTAL 17 days 2 hrs 7 hrs


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The participants did not indicate when they were scheduled to get their clearances. Many of the participants were still awaiting the issuance of the applications they were processing though it has been observed that claim stubs issued by the clerks when clients were submitting their completed application form ranged from 2 weeks to one month. For the renewal of mayor’s permits for the established businesses, the following table was produced:

Transaction Times in the Different Offices and Agencies in the Renewal Of Mayor’s Permits

(Transaction Time = Waiting Time + Processing Time)

OFFICE/AGENCY

PROCESS

High

Low

BARANGAY OFFICE

CLEARANCE 30 mins 15mins

FIRE DEPARTMENT

ASSESSMENT 1 hr 10 min

PERMITS OFFICE ASSESSMENT ENCODING

20 min 15min

PAYMENT of assessed

taxes/fees

3 hrs 1 hr

LAND TAX 1 hr 20 mins WATER BILL 1 hr 20 min

TREASURY OFFICE

SIGNATURE OF CT

15 mins 5 mins

FIRE DEPARTMENT

FIRE SAFETY INSPECTION

2days 12 hrs

CITY HEALTH OFFICE

CLEARANCE 4 hrs 2 hrs

DTI CLEARANCE 25 mins 5 mins SSS CLEARANCE 3 hrs 30 mins

PHILHEALTH CLEARANCE 30mins 25 mins PAG-IBIG CLEARANCE 30 mins

Total 2 days11 hrs 30mins

16 hrs 20 mins


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Number of Signatures required to Acquire the Mayor’s Permit The table below tabulates the number of signatures needed per office/agency based from the photocopied application forms.

Number of Signatures Agency/Office Type of Document New Renewal

Permits Office Assessment Form 1 1 City Treasurer’s Office Assessment Form 6 6

Assessment 1 1 Fire Department Fire Safety Certificate 2 2 Health Card 1 1 City Health Office Sanitary Health Permit 2 2

City Planning and Development Office (only for new businesses)


1

City Engineer’s Office (only for new businesses)


1

DTI Clearance 1 1 SSS Clearance 3 3 Phil health Clearance 3 3 Pag-Ibig Clearance 1 1 Total 23 21 The above table shows that it is the City Treasurer’s Office which requires the highest number of signatures for both new and renewing businesses in acquiring their mayor’s permits. One signature by the collection officer on the receipt of payment of business fees and taxes, two signatures are needed from the land tax section, an initial from the records clerk and a clearance signature by the land tax revenue collection officer; two from water billings, an initial from the records clerk and then the clearance signature from the water revenue collection officer; then a signature by a revenue collection officer who checks for a cedula before the city treasurer finally affixes his signature on the assessment form. Clearances from the SSS and PhilHealth agencies require the signature of the branch managers but these are already pre-printed in the clearance forms that these offices issue so that only two signatures, the signature of the accounts officer and the client’s, are required. The Permits Office requires the signature of the assessor, for the DTI and Pag-Ibig clearances, both require the signature of the branch managers. Problems encountered in Acquiring the Mayor’s Permit In the two Focused Groups Discussions and various interviews conducted, several problems were brought up, which the participants observed and experienced as they processed their applications.


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The group was divided into two, one representing those getting new business permits for their clients and the other for the renewal of mayor’s permits. For the new business group, the participants mentioned that deadlines were not a problem since those processing the application can accomplish the needed requirements and clearances without fear of penalties since no deadlines were set and the permit acquired at any part of the year. But there were issues and problems raised, namely: • Compliance with requirements (SSS, Phil Health, Pag-Ibig) prolongs the process • Availability of the signatories of the different offices for the clearances • Some requirements for clearance are felt to be not needed, like in getting barangay clearances

TIN was required, birth certificates/marriage contracts for SSS were mentioned • There was a delay at the permits office in processing the assessments because of the new

computerized system being used • Financial constraint is one of the reasons why licenses are not processed right away (on the

part of the new business applicant) For the group representing businesses renewing their licenses, the following issues and problems were raised. • Many were not informed about the non-extension of the January 20 deadline in the payment of

the business fees and taxes • At the City Health Office, the doctors were not available for signatures and for the non-food

businesses, non-food business owners were not informed on the requirements for the issuance of sanitary permits like the 1x1 ID pictures and personal appearance of all employees of the business establishment for the issuance of the sanitary permit

• Several problems were encountered at the permits office: slow process of assessments because of the limited number of computers (2 units only—only one was used in the assessment of businesses, the other computer was used for mayor’s clearances and assessments for motorized tricycle for hire permits), misplaced assessment forms by the applicants, some of the assessments were processed ahead of the others because of the connections of the clients with personnel in the permits office

• At the treasurer’s office delays were also encountered because there was only one cashier receiving payments for assessed business fees and taxes and also too many signatures required before being approved by the treasurer

• One cause of the delay of processing was the requirement to have the land tax and water bill checked at the treasurer’s office even if the business owner only leases his business space. The mayor’s permit processing is delayed if the lessor of the rented business space has arrears in water and land taxes.

• In terms of quality of service, service depends on whether the office/agency client is known to the service provider or not.

• Some mayor’s permit applicant were required Phil Health clearances even if they are already over-aged

• In availing the barangay clearance, TIN and previous DTI clearances were being required to get the barangay clearance which the participants deemed the requisites unnecessary

• At the fire department, the long length of time in scheduling of inspection and issuance of fire safety inspection certificate


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3. Assessment of Overall Management 1. Standards and Objectives There was no clearly articulated and measurable standard business licensing process and procedure. 2. Inter-organizational Communication and Enforcement Activities Three deadlines were set in the renewal of business permits for the City of Ormoc. First is the January 20, 2005 which was deadline of assessments of business fees and taxes, with the deadline of payments originally set at January 24. But because of the volume of applications being processed, the deadline for payment was extended until 12noon on the January 26. All assessments, even if dated January 20 would be reassessed with the 25% penalty. The other deadline date being March 20 which was set for the submission of the paid assessments with all the clearances from the SSS, PhilHealth, Pag-Ibig, DTI, the Sanitary health Permit from the City Health Office and the Fire Safety Inspection certificate from the Fire Department. Most of those processing their application forms were taken by surprise by the non-extension of the deadline for payment of business fees and taxes. It was the first time in Ormoc City’s history that there was no extension as to the payments of business fees. But it was different for this year since there were three deadlines instead of one as practiced from the previous years. Before, it is only after all the necessary clearances and clearances are acquired only then can the clients have their fees and taxes assessed, pay the fees and taxes and then their mayor’s permits would be issued. Should these changes be applied, the taxpayers and business owners should be informed accordingly. 3. Disposition of the Implementors/Clients The city government attempted to simplify the assessment by having an agreement with the city engineer’s office and city health office to have their assessments be done by the permits office unlike before, assessments were done separately and paid separately, including the assessment from the fire department. For this year, the local government decided to have all these assessments be included with the rest of the fees and taxes imposed be reflected in one receipt. The practice of processing the application for mayor’s permits in staggered days could be explained in two ways: • A large proportion processing these applications is the bookkeepers. The retainer’s fee for a

bookkeeper to help keep the financial records starts at P 200 upwards depending on the size of the business. It was observed that even small sari-sari stores and market sellers have bookkeepers to keep their financial records for tax purposes. Processing of mayor’s permits is an added service by the bookkeeper.

• Financial constraints as often mentioned in the Focused Group Discussions and interviews, many find it burdensome in paying contributions to the SSS, Phil Health and Pag-Ibig. Added to this the taxes due to the local government unit as well as the Bureau of Internal Revenue for the national taxes. Though this reason also apply as to why bookkeepers could not expedite processing their clients’ applications.


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4. Structure Critical to whole current scheme is at the Permits Offices for the assessment and the City Treasurer’s Office for the payment. Currently, • The permits office has 4 assessors and only one encoder, Based on the measured processing

time, taking the higher recorded processing time, the whole procedure of manually assessing, encoding and printing the assessment form take 15mins and 20 seconds.

• A bottle neck is created at the encoding/printing process because for every one application encoded/printed, another three is waiting to be processed.

• This means that for a given 8-hr day, the permits office can process a total of only 31.30 or 31 applications in a day.

• For a given 15 working day period (based on the January 20 deadline), the Permits Office can only process a total of 469.56 or 470 applications.

• The encoding/printing bottleneck also affects the cashier since the Permits Office computer is networked to the cashier’s computer and just as the encoder, there is only 1 cashier receiving payments.

5. Technology & Facilities Visiting the different offices and agencies involved in the acquisition of a mayor’s permit, it can be noted that the offices are not meant to handle large volumes of clients specially come January, which is tax and clearance season for businesses. Based on observation, reception areas in the local government offices, both the City Treasurer’s Office and the Permits Office, given the processing times of each office, may only be able to handle 10 clients at a time. The waiting areas, the corridor at the City Treasurer’s office and inside the Permits Office, it would already be considered cramped with ten clients waiting for their papers to be served. It is also the same with the other offices and agencies. Even the venue chosen where these agencies and offices can issue their clearances maybe seen as not so friendly to clients. The tables where the representatives from Phil Health, Pag-Ibig, Engineering, Zoning, Fire Department and City Engineering, SSS (the representative did not issue clearance but SSS forms were available for clients in case these were needed) were placed at the lobby of the Ormoc Superdome, 3 minutes walking distance from Ormoc City Hall. The DTI did not place any representative to issue clearances since the office was located within the Ormoc Superdome. But the clients needing clearances from these offices and agencies would have to queue at the curb, outdoors. The SSS was issuing their clearances at the main branch office located 4-minutes by tricycle ride from the City Hall. Phil Health and Pag-Ibig Offices also issued clearances at their offices located within Ormoc Superdome. Though these efforts are needed to simplify and make it easy for the clients, the current scheme needs to be improved as evidenced by the issues and problems raised by the clients.


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4. Conclusion Procedural & Process-Related Recommendations

Physical Information should be disclosed as to the design of the system, essentially how the automated system computes the taxes being levied. This would demonstrate to the taxpayers, business owners and investors transparency on the part of the local government as to how taxes and fees are being determined. The March 20 deadline may in fact be client friendly since it gives the clients enough time to come up with the necessary financial requirements in paying their contributions (if they are delinquent) to the SSS, Phil Health and Pag-Ibig. The local government unit can take a pro-active stance by putting up posters, and/or provide flyers (preferably written in Cebuano), giving information as to what documents are needed to get the different clearances from the different agencies and local government departments. Oftentimes, it is the lack of these required documents which causes the clients to back track and prolong the processing of their mayor’s permit application. Should a one stop shop be initiated by the local government, the venue chosen should afford some creature comforts for the clients processing their papers like seats in an enclosed and well ventilated space. The space should be large enough to accommodate a large number of clients, even if only for a limited time.

Procedural The whole procedure can further be simplified by removing the land tax and water works clearances. Most applicants for business permits are lessees and it would be unfair practice on the part of the local government to business owners who rents their business spaces to involve them in a collection problem between the local government and building/land owners.

Material/Equipment The Permits Office can be made more efficient by removing the encoder altogether and allow the assessor to encode directly into the computer and print, then sign the computer printed assessment form. A software should be developed where all the taxes and fee schedules are programmed, which should include the fire department assessment, so that the clients would only have to go at the permits office to have all the assessments be computed. But this entails increasing the resources of the Permits Office, adding computers and printers to increase its capacity to process assessments. A better filing system is also recommended at the Permits Office since there were complaints from clients of misplaced assessments forms.


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Personnel

Increasing the capacity at the Permits Office also entails increasing the resources at the City Treasurer’s Office, particularly at the cashier. The number of cashiers should be increased so that those being processed by the Permits Office can be accommodated at the cashier section. The increase in the capacity to process in the Permits Office and the Licensing Cashier section need not be done on a permanent basis. This can be applied only during the peak season, only during the month of January to accommodate all applications. As to the availability of the signatories of the different offices, the mayor should instruct the heads of offices to make sure that if the signatories are out of the office, an officer in charge who could sign on behalf of these signatories be given responsibility so as to make sure that clients would not be going back and forth these offices to get these signatures. With these recommendations to the local government unit, the clients would feel that they are being given importance and their taxes are working for them in terms of providing adequate facilities and services as clients process their applications for their mayor’s permit.


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Appendix 1

Brief History and VMG of Ormoc City The name Ormoc originated from “Ogmok”, and old Visayan term for lowland or depressed plain. “Ogmok” also refers to a spring located between Brgy. Donghol and Mahayag. Originally part of the town of Palompon Ormoc was declared as a separate and distinct municipality on February 26, 1843. Ormoc City was declared as the first Non-Provincial Capital City of the Philippines on September 4 1947. The declaration was made by virtue of RA No. 179. The city was then formally inaugurated as a chartered political subdivision in October 20, 1947. The City Planning and Development Office has drawn up a 15-year development plan in which the City has stated its Vision for the City:

“To have a modern and progressive premiere city in the Eastern Visayas seaboard supported by an empowered and participative community, to have an industrial and commercial centers, and institutional facilities complemented by the proper infrastructures; and with focus on proper environmental and ecological planning and management aimed towards sustainable development”

Given this vision statement, the City of Ormoc has identified its mission which is: • The optimization of the economic growth potential of Ormoc City conducive to a sustainable

environment; • The implementation of a Comprehensive Land Use Program that will serve as a basis for the

city in considering its investment plans and decisions; and The identification of investment opportunity and formulation of phased program of action.


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APPENDIX 2

Researcher’s Daily Field Account (as related by Leo Emmanuel Castro, Field Researcher)

• January 20, 2005. Arrived at Ormoc City at around 12:30 in the afternoon after landing from

Tacloban City. Met with Mr. Tingzon with regards to the time and motion study to be conducted for the business licensing procedure for the City of Ormoc. I informed him about what my activities would be and the secondary materials I would need for the research. He gave me a flow chart of the business licensing procedure and the pertinent tax ordinances followed by Ormoc City which had been previously requested by Ms. Jean Roxas of GTZ . I was informed by Mr. Tingzon that for this year, those renewing their licenses did not require an application form, but a barangay clearance, statement of Gross Income and the previous year’s business permit. I was also informed by Mr. Tingzon that at the lobby of the superdome, 5 minutes away by foot from City Hall, clearances from other offices were being issued like engineering, fire, zoning, Pag-ibig, PhilHealth etc.

• I was informed by Mr. Tingzon that it was the last day of the renewal of business permits without penalties and there was no extension which was happening for the first time for the city. According to Mr. Tingzon, unlike the previous years where there was a request from business groups for an extension, in fact the previous year there were two extensions, first extension after January 20 was February 20, and the second extension was for another month which was March 20.

• According to Mr. Tingzon, local taxes and fees due to the city was prioritized and its deadline was set at January 20 and the deadline for compliance for all other requirements was set for March 20.

• The afternoon of January 20, I went to the business licensing Office to observe the procedures going on within the office to get the feel of the procedure without disrupting the work flow in the office. The assessors assigned advised those who were submitting their assessments to just leave them at the business office since they would not be able to release them anyway because of the volume of renewals they were handling. The clients were assured that for as long as the assessments were dated 20 January 2005 and paid by 24 January 2005, they would not be assessed a 25% penalty.

• January 21,2005. I continued my observations with regards to the operations at the business licensing offices. Submissions continued with clients leaving their papers to be processed and picked up on the January 24, 2005. In the afternoon I visited the DTI office, which was just 5 minutes away from City Hall, to visit the DTI representative. I was informed that the DTI personnel were all out in a seminar and only the personnel detailed from the LGU were present. I also checked out the lobby of the superdome where the other agencies were posted and found that most have already packed up and went back to their different offices since there was no extension in the renewal of licenses.

• January 24-28 and 31 2005. With a research assistant, tracked clients in their processing for their renewal of business licenses. Interviewing people, times when there were no clients to be tracked in the business office, who had previously processed their papers.

• Only 6 were observed during this period. Only one has submitted complete requirements to the business licensing office, the rest were to be completed in the future.

• Five of the clients observed were picked during the period January 24-25 and one was January 28. I decided to pre-screen the clients to be tracked since I noted that most of the people carrying the papers were mostly helpers or employees who were only asked to go and have their local taxes and business fees assessed and pay the fees at some later date. Most clients went home after getting their assessment.

• It would be best to take into account that, since the deadline without penalties had passed, there were applicants for renewals observed but after initially interviewing them their response that


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they are unsure as to when they would next process their papers, and some have expressed that they will continue processing it at some later depending upon their availability.

• Feb. 1-3, 2005. This was spent in going to different agencies whose requirements were needed in securing the business permits. The City Health, SSS, Phil Health, Pag-Ibig, DTI were visited and spent time to observe transactions times in these office when they have clients.

• Feb 4 , 2005. This was spent in collecting the rest of pertinent secondary data from the City Hall.

• Feb 14 2005. A Validation Workshop and Focused Group Discussion was held with bookkeepers as well as owners who processed the applications of the new and established businesses. A total of 15 participants attended the workshop-discussion. The objective was to validate the initial finding of the research and to identify problems encountered in processing their mayor’s permits.

• Feb 16 2005. Another Focused Group Discussion was held but with a smaller group, 7 participants in all, to gather additional data which was not captured in the previous activities.

• Feb 17, 18 and 21 2005. Additional observations were conducted at the different offices/agencies to gather time and motion data. A total of 12 clients were tracked from the different agencies but most were already in the final stages of their application, which were started January.


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Action Plans

DOCUMENTATION: ACTION PLANNING TOWARDS IMPLEMENTING THE

RECOMMENDATIONS OF THE TIME AND MOTION STUDY March 29, 31, 2005

The action planning workshops were conducted on Ormoc and Bacolod cities in March 29 and 31, 2005, respectively. In both workshops , the key LGU officials involved in business permits and licensing, small and medium scale enterprises, chamber of commerce representatives and national government agencies were invited. The first half of the program involved the presentation of SMEDSEP program by the GTZ, presentation of Muntinlupa City’s BOSS Best Practice, and the presentation of the time and motion study per city. This culminated in a question and answer forum. The second half of the activity was spent on the action planning workshops using workshop tools and templates (see Workshop Guide and Templates in Annex 1). Shown in Tables 1 and 2 are the results of the workshops, the action plans to improve the cities’ business permits and licensing procedures and processes. Generally, the participants in the two workshops agreed with the overall recommendations presented in the studies made. Both added alternative ways of streamlining the procedures. Some of the added recommendations include securing most of the clearances before the January licensing period and cutting the number of signatories to two. There were very few recommendations, which were debated on. This include the following:

• Ormoc, this is the exclusion of the land and water tax clearances to the licensing process. The Treasurer’s Office wanted to maintain these steps in the BOSS.

• Bacolod, there was no consensus in two recommendations of the study: (1) giving the application forms for free, and (2) providing food and beverages to clients during the licensing period. They said these are subject to budget availability.

Overall, they agreed that they would plan, implement, monitor and evaluate a better BOSS in a participatory manner. They have included in all these stages the involvement of various sectors, including GTZ and the consultants.

1

Table 1.

ORMOC CITY ACTION PLAN

Recommendations Activities and Target Implementation

Enabling Mechanisms Persons Responsible Time Frame

A. Streamlining and Simplification of Processes and Procedures Broaden/ Enhance information on BLP Procedures

Disseminate information through tri-media/billboards/streamers (to include barangay hall)

Appointment by Mayor, Office Order

BPLO-Mr. Tingson Chamber- Atty Fiel Ormoc Cable

Before January 1, 2006

Reduce the Number of Signatories that are not directly involved in assessment

Secure clearances from national agencies in advance (SSS, Pag-ibig, DTI)

MOA with Chamber, NA’s concerned or other concerned agencies

BPLO SMEDSEP Head Offices of DTI, SSS, Philhealth, Pag-ibig, BIR

MOA-October Secure Clearances- December

Secure in advance individual clearance on agencies not directly involved in assessment

Secure BIR clearance form

Continued availability of signatories of clearances

Pre-printed and computer generated clearances (SSS)

Office Order SSS- Mr. Corro November

Maintain the land tax and water clearances (Lease)*

Improve the system of updating the records

Treasurer’s office- Mr.A. Roman

Before January 2006

Get the service commitment of appropriate agencies in

Convene all agencies concerned prior to activity

MOA BPLO- Mr. Tingson Treasury- Mr. Roman Building—Engr. Fiel

December

3

the implementation of the BPLO

Fire- SFO Acosta

Assessment/evaluation of the BPL system

Indicate time/Duration of transaction

Post Audit October

Assessment of the Activity done in January

Notice to all agencies involved in the issuance of BPLO

Mayor BPLO Treasury Head of Offices (SSS, DTI, BIR, Philhealth, SMEDSEP, Chamber, Pag-ibig)

Last week of November- notice Assessment-February

B. Setting of BOSS

Create a Committee (LGU, NGA, Private)

Office of the Mayor (BPLO, Mayor)

Executive Order Preparation- 3rd Q Set-up- 4th Q

Look for bigger space to house BOSS

BPLO

Target the reduction of steps/signatures/offices to only 2; obtain clearances beforehand

BPLO Dry-Run December2005

C. Extensive Information Dissemination

Post flowchart Information campaign

BPLO Chamber

Info Drive- 3rd Quarter

D. Computerization Complete hardware Mayor, IT Additional IT Personnel

Memo from Mayor City Ordinance

Supplemental budget- 3rd Q Installation- 4th Q

E. Customer focused personnel

Training on Customer Relations

Mayor, HRM Training-3rd Q

* For further review

4

Table 2. BACOLOD CITY ACTION PLAN

Recommendations Steps Persons Responsible Enabling Mechanisms Target Date Setting Up of BOSS Issuance of EO to create

OSS Committee- content incluide space, budget, personnel, schedules

Atty. Eli Aragon to draft EO

EO, MOA with NGAs concerned CMOs and supplementary budget

2nd Q June 2005

Multi-sectoralplanning/consultation

BOSS/ Local investment Board

Budget July 2005

Training of Personnel to handle OSS

HRMO- coordinate with Atty. Aragon All people who will be involved in OSS

Memorandum Order by Mayor

3rd Q- September

Workshop to determine simplified procedures and physical layout

BPL-Ms. Ardis Jaculina Memorandum Order by Mayor

April 2005

Info disseminationdrive- public and barangay- Lgu to partner with private organizations in giving information on guidelines and procedures

PLO and barangay operations bureau


3rd Q-September

Procedural Streamlining/ Workflow Simplification

Integrate all recommendations of study to the operation of BOSS (except those for

BOSS, CPDO Technical support from GTZ, Ateneo Consultants

September 2005

5

further study) Relocate BPLD near

OSS/ Swap place with Cashier

City administrator Memorandum Order by Mayor

April 2005

Advance issuance of pre-requisites

City administrator Memorandum Order by Mayor

April 2005

Early PR bidding and form reproduction/ Make forms available at barangays

Ardis Jaculina, Oversee Prepn by city administrator


November 2005

Orientation Training ofPersonnel on Customer satisfaction

Atty Aragon Ardis HRMO Lemuel

Support from Ateneo consultants GTZ funds

November 2005

Permanent employeeswill be assigned

For Further Study: Free application forms Waiting area with amenities Dry Run BOSS

Implementation All Involved including SMEDSEP, Ateneo Consultants

EO September 2005

Implement New BOSS City mayor’s Office, BOSS, BPLO

EO January 2006

Monitoring andEvaluation

All Involved in this workshop including SMEDSEP, Ateneo Consultants

March 2005

6

Information Technology Solicit support from GTZ on hardware/software

Atty. Aragon Project Proposal May 2005

Solicit support from NGOs and private sector

BFCCC II to facilitate links with NGOs, PS

Ordinance to develop system to avail of tax credit

On the job training on software

Lemuel

Establish and dry run use of system

MITCS Assistance from GTZand Muntinlupa

December 2005

7

Deutsche Gesellschaft fürTechnische Zusammenarbeit

(GTZ) GmbH

Department of Tradeand Industry

Technical Education andSkills Development

Authority

GFA Management

PROGRAM MANAGEMENT

Training Services

Business and Financial Services

Martina Vahlhaus, Program Manager

Christian Widmann4th Floor, TESDA Central Office, East Service Road, Taguig, Metro Manila

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10th Floor, German Development Center, PDCP Bank Centre Building,V.A. Rufino corner L.P. Leviste Streets, Salcedo Village, Makati City+63 2 8123165 (local 46)SMEDSEP c/o GTZ-Office Manila, P.O. Box 2218 MCPO Makati City, Philippines

+63 2 8938297, 8405035, 8179095 (fax)

Markus Ehmann, Business Development ServicesHarald Neimeier, Financial Services

38 Acacia Street, Lahug, Cebu City, 6000+63 32 4122256, 2344494 (telefax)

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[email protected]

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