Cities Development Initiative Newsletter

Philippines set stricter guidelines for ease of doing business

As the Philippines prepares for a more intense competition from the ASEAN economic integration, the Departments of Trade and Industry (DTI), Interior and Local Government (DILG), and the Information and Communication Technology (DICT) signed a Joint Memorandum Circular (JMC) on August 30 in Manila to further streamline the business permits and licensing system in the country.

Businesses and industries are crucial in achieving growth, however doing business in the Philippines remains a challenge. In the Ease of Doing Business Report published by The World Bank-International Finance Corporation in 2016, the country performed poorly in the Starting a Business Indicator, where it slipped eight places to 165th from 157th the previous year.

Recognizing the importance of strengthening the country’s competitiveness, the U.S. Embassy Manila’s U.S. Agency for International Development (USAID) through its Strengthening Urban Resilience for Growth with Equity (SURGE) Project, is helping secondary cities achieve a business enabling environment to bring in more investments and promote inclusive growth.

Key officials of the Departments of Trade and Industry (DTI), Interior and Local Government (DILG), and the Information and Communication Technology (DICT) sign a new Joint Memorandum Circular to further streamline business permit processing in the Philippines as partners from the National Competitiveness Council and USAID witness the momentous event.

Business permit processing: Then and now

This new circular follows a previous JMC signed in 2010 that introduced service standards for streamlining business permit processing. The 2010 JMC addressed the difficulties in starting a business by reducing the number of steps, processing time, documentary requirements, and approving signatories as well as introducing a unified application form. This was successful in simplifying the process as the national average time needed to start a business was reduced from 49 days in 2004 to 29 days in 2016, according to the World Bank report.

One of the first steps in starting a business is acquiring business permits and licenses issued by all cities and municipalities. While the number of procedures, transaction time and red tape varies across the 1,516 local government units in the archipelago, the process itself is a source of delay and frustration for many business owners and investors. In a highly urbanized city where starting a business required a total of 54 days in 2011, the procedure with the longest wait was printing receipts and invoices that took 14 days.

Five years since the issuance of the previous JMC, 93 percent of the LGUs across the country have met the standards set in the 2010 circular, according to DILG-Local Government Academy.

The revised standards of the new JMC will cut the prescribed processing time for new applications from 5-10 days to 1-2 days and for renewals from 5 days or less to 1 day or less. Local governments will be instructed to reduce the maximum number of steps for business registration from 5 to 3 and use a print and electronic version of a unified form with only two approving signatories with alternates.

DTI Secretary Ramon Lopez acknowledged USAID as being one of the prime movers supporting the continuous streamlining of the system for the past five years. Private sector Co-Chairman of the National Competitiveness Council Guillermo Luz noted USAID’s support that spans over different projects, which is a testament of its persistence and patience as a partner in improving the business permits and licensing system.

USAID helps streamline business registration in secondary cities

In 2011, USAID’s Investment Enabling Environment (INVEST) Project supported the streamlining of the business registration process of Batangas, Cagayan de Oro and Iloilo cities. The three cities were also among the trailblazing cities that introduced a mobile money payment system, with support from USAID’s Scaling Innovations in Mobile Money (SIMM) Project.

These cities were the pilot cities of USAID’s Cities Development Initiative (CDI). Through CDI, USAID is working to strengthen the economic competitiveness and resilience of secondary cities. The urban development approach has been extended to more CDI partner cities – Puerto Princesa, Tagbilaran and Zamboanga. The SURGE Project is now developing conditions for broad-based, inclusive and resilient economic growth in the six cities.

Based on recommendations from USAID's streamlining experience, the new JMC further updates the standards set in 2010. Similar to the experience of the three CDI pilot cities, the new circular also recommends the automation of business transactions through a central platform from DICT to improve efficiency and help eliminate corruption.

Aside from these benefits, using technology to automate and computerize these procedures can raise the income of both the city and its citizens. When Valenzuela City, also assisted by USAID through the SIMM Project, introduced electronic payment systems into their government transactions in 2013, the total revenue collected grew from PhP2.4 billion (US$49.6 million) in 2013 to Ph3.1 billion (US$64 million) in 2015. Meanwhile, the number of registered businesses increased from 14,011 in 2013 to 15,530 in 2015.

Through its support in streamlining government transactions, USAID contributes to promoting a business-friendly environment and investment climate that can boost the growth potential of the Philippines.

USAID-supported water dialogue help Cagayan de Oro City Government and Water District partner on septage management

In a meeting called Water Dialogues: An Executive Discussion on Water and Sanitation held on August 31, the Cagayan de Oro City Government and the Cagayan de Oro Water District pledged to work more closely together to improve water and sanitation services in the city.

Facilitated by USAID’s Water Security for Resilient Economic Growth and Stability (Be Secure) Project, the meeting tackled among others the city’s plans to pass an ordinance that will establish Cagayan de Oro’s Septage Management Program.

USAID, through the Be Secure Project, is assisting Cagayan de Oro along with other CDI partner cities Iloilo and Zamboanga develop their respective septage and sewage management programs. Be Secure helps these cities develop local ordinances to establish the program, raise public awareness and foster social acceptance, assess appropriate tariff structures to support program operations, and access financing for the construction of the septage/sewage facilities. The project also provided its partner cities with septage management flip charts and trained barangay officials in discussing the importance of septic tank maintenance with their constituents.

To date, Be Secure has helped 570,000 people gain access to improved sanitation services. USAID's assistance contributes to increasing Filipinos' access to sanitation, which remains a challenge today. According to World Bank (2005), less than 10 percent of Filipinos are connected to large scale septage or sewage treatment systems nationwide, dropping even lower to 3 percent outside of Metro Manila. Human wastes from most households are therefore left untreated, posing risks on the environment and public health.

With its septage ordinance in place, Cagayan de Oro is one of 145 cities in the Philippines that has taken active steps to establish its septage management program and comply with the mandate of the 2004 Philippines Clean Water Act. Also embarking on their respective septage management programs with USAID support are the cities of Tacloban and Ormoc in Leyte, Isabela in Basilan, and Cotabato in Maguindanao that are now in various stages of implementing sanitation programs.

Students of the Mindanao University of Science and Technology in Cagayan de Oro City during the launch of the career center.

USAID and partner universities launch career centers

On August 25, the Mindanao University of Science and Technology in Cagayan de Oro City, also known as University of Science and Technology of Southern Philippines, launched its career center together with USAID’s Science, Technology, Research, and Innovation for Development (STRIDE) Program.

“We are looking forward to helping our students define their career, and provide counseling and guidance with regards to matching skills and competencies with jobs,” said Dr. Ricardo Rotoras, President of Mindanao University of Science and Technology.

The launch of the career center followed a series of consultations and workshops with career center experts from STRIDE’s mentoring partners William Davidson Institute of the University of Michigan and Florida State University.

“A career center basically supports student-career guidance to help them develop and sharpen their career plans, gain professionally relevant career experience through on-the-job trainings and internships, and finally help them to get jobs,” explained Dr. Jeffrey Garis of Florida State University.

The following week on September 1, Palawan State University in Puerto Princesa City launched its own career center. University Officer-in-Charge Dr. Lorma Gelito and Office of Student Affairs Services Director Dr. Grace Abrina led the ceremonies.

Career centers help students with their career interests by providing resources like links to industry partners for internship, job placement, career advising, and other opportunities. A visit to the career center will help in assessing and developing the students’ skills to fit industry needs, enabling them to excel in their chosen field.

To date, there are six career centers in the country launched through the STRIDE Program.

USAID partnership on LEDS continues at the sub-national level

On August 15-16, USAID's Building Low Emission Alternatives to Develop Economic Resilience and Sustainability (B-LEADERS) Project conducted a greenhouse gas (GHG) inventory and accounting workshop for 15 key personnel of the local government unit (LGU) of Tagbilaran City.

The participants learned about the basics of climate change as well as the concepts, tools and benefits of conducting a GHG inventory including best practices from other LGUs that have completed their respective GHG inventories.

B-LEADERS is also set to work with Zamboanga City to undertake a GHG Inventory and study of the mangrove carbon sequestration potential of selected areas.

B-LEADERS aims to contribute to increasing climate change resilience and mitigation in the Philippines. It also complements the ultimate goal of transformative economic growth with a primary focus on sustainable management of resources and reduction of emissions.

USAID supports Communities for Resilience Forum in Bohol Province

During the same period, B-LEADERS also supported the 3rd Communities for Resilience (CORE) Multi-stakeholder Convergence Forum for the Wahig-Inabanga River Basin in Panglao, Bohol.

The CORE Forum is an initiative of the Climate Change Commission, which aims to enhance knowledge and upgrade disaster risk resilience of vulnerable communities, optimize mitigation and adaptation opportunities for sustainable development, and strengthen the institutional and technical capacities of LGUs for effective integration into local development plans.

The two-day forum was attended by about 100 LGU representatives from Bohol Province. B-LEADERS provided an overview of methodologies and approaches to local climate change mitigation actions such as community level GHG inventory and how it can support low carbon development, and shared the case study of the Renewable Energy Micro Grid Power System of Green Island in Roxas, Palawan as a model for renewable energy installation in off-grid areas. B-LEADERS will continue to support the CORE Convergence Forum as it reaches out to other LGUs in 18 major river basins across the country.

USAID supports multi-stakeholder review to develop climate-resilient plans for Zamboanga City

With joint support from two projects, USAID helped Zamboanga City adopt a multi-stakeholder and consultative approach for developing its major development plans. On August 15-16, USAID’s Water Security for Improved Economic Growth and Stability (Be Secure) Project conducted a preparatory workshop to mainstream disaster risk reduction and climate change adaptation in its Comprehensive Land Use Plan (CLUP).

Following this, the SURGE Project helped facilitate a consultative technical review of the CLUP, the City’s Comprehensive Development Plan (CDP) and Zoning Ordinance on August 17 to 19. Both activities were attended by representatives from the national government agencies, private sector, academic institutions, and local enforcement groups, with both SURGE and Be Secure serving as technical resources as well. The multi-stakeholder approach to the planning process enabled the city to validate information, gather comments and inputs for revising the plans, and comply with national guidelines. More importantly, it fostered a sense of ownership of the outputs by the different sectors as they plan for a more climate-resilient future.

Batangas LGUs push for improved revenues from use of Marine Protected Area

Nearly 100 representatives of 14 municipalities in Batangas Province attended the Forum on Revenue Generating Scheme for Verde Island Passage organized by USAID's Ecosystems Improved for Sustainable Fisheries (ECOFISH) Project. The participants included three mayors and vice-mayors, and several municipal council members, treasurers, and planning, agriculture and tourism officers.

Improving environment user fees collection remains a challenge towards enhancing the resources and capacities of the municipalities along the Verde Island Passage, dubbed as the global "Center of the Center of Marine Shorefish Biodiversity.”

The Verde Island Passage is a strait that separates the islands of Luzon and Mindoro. More than half of the Philippines’ documented fish species as well as several globally threatened species can be found here. However, the integrity of the corridor's rich ecosystem is threatened as it is also a major sea lane, a highly productive fishing ground, and one of the busiest diving spots in the country.

The forum presented the experiences of seven municipalities that currently impose user fees on Marine Protected Areas and issue auxiliary invoices for the transport of fish and fishery to make conservation pay for itself.

Two municipalities have so far been successful: Mabini through diving entrance fees, with revenues amounting to more than PhP25 million (US$516,979) for the past five years, and San Juan through tourism ecological fees, with PhP10 million (US$206,791) in revenues per year for the past five years.

The sharing and uses of the revenues are specified in the municipal ordinances that mandate the collection of the fees. The barangays and the municipal government get a portion of the revenues and this has enabled the LGUs to plan and budget for conservation and tourism programs in a transparent and accountable way. It was agreed that the current ordinances will need to be amended to increase the fees and address collection challenges. The ordinances will likewise be replicated in seven municipalities that have yet to implement user fee schemes.

Cities Development Initiative

USAID is working to strengthen the economic competitiveness and resilience of secondary cities outside of Metro Manila through its Cities Development Initiative (CDI). The CDI seeks to advance the development of secondary cities as agents of growth that is inclusive, environmentally sustainable and resilient. Depending on the most urgent needs of the city, USAID provides a range of technical assistance, drawing from resources in economic growth, health, energy, environment, governance, and education to assist the cities achieve resilience and inclusive growth.

The CDI is a crucial component of the broader Partnership for Growth, a White House initiated “whole-of-government” partnership between the U.S. Government and the Government of the Philippines. The partnership aims to shift the Philippines to a sustained and more inclusive growth trajectory on par with other high‐performing emerging economies. Currently, USAID has six CDI partner cities: Batangas, Cagayan de Oro, Iloilo, Puerto Princesa, Tagbilaran and Zamboanga.

For more information on USAID's projects in the Philippines, click here.

Contact Us

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Salcedo Village, Makati City
Philippines 1227
Tel. +632 88-SURGE (78743)


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