City Government of El Salvador
Best Practice Focus Area/s
Strategy, Citizens / Customers, Operations
Started mid-year of 2014, full implementation in January 2017
This is a GBPR entry
With the new El Salvador City Hall and its Business Permit and Licensing Office (BPLO), the business operators felt comfortable getting into the venue during renewal and new business applications. Refreshments and entertainment were being offered as clients waited for their permits. The operation of Business One Stop Shop made it easier for all business entities. They no longer need to go to other offices, and the waiting time for issuance of permits is a maximum of 30 minutes. Clients do not need to go to the barangay to get a clearance because it is already integrated into the process. Permits can be delivered as well if the client prefers this option. The permit has one e-signature by the city mayor and is countersigned by the Business Permit and Licensing Officer.
Background and Problem
In 2010, former President Aquino issued several memoranda to streamline the process of the Business Permit and Licensing System and the Department of the Interior and Local Government (DILG) requested several reports about its steps and documentary requirements on the business permit process. Data on the comparative growth of permits issued for renewal and new against gross sales and capitalization growth rate for five years were also requested. The City Treasurer’s Office was dismayed that a database with the information the DILG needed did not exist. Records were incomplete and not thorough, indicating poor performance in the business permit process. There is no basis when it sets a target, and the result is evaluated through an accomplishment report.
Business permit applicants assume that they are immediately permitted to operate upon payment of fees and charges, thus, overlooking compliance to other regulatory bodies such as zoning, sanitary, and building offices. Even businesses that already have permits were discovered to violate these regulations. Building operators have no setback and do not conform to the zoning ordinance, and food operators have not undergone food handlers’ class. The connectivity of one regulatory office to the others involved in permitting was not well defined. Thus, the system was amiss. Illegal operations were also prevalent since there was no business inspection. These were concerns that had to be addressed immediately.
There was no queuing system for getting a business permit, so the process was long and tedious, and documents were not specific and duplicated. The client has to go to many offices, and some regulatory offices are far from each other. Having a fixer was the accepted norm because the process was taxing and time-consuming.
Solution and Impact
In 2014, there were 275 new business permits issued and 279 were renewed. On 23-24 July, El Salvador City was invited by the Department of the Interior and Local Government to undergo the Regulatory Simplification Process (RSP for LGUs) in partnership with International Finance Corporation (IFC). The participants were the hands-on personnel assigned to their processes. Upon the diagnostic phase, it was discovered that applicants had undergone ten steps but could resolve it in only three steps, from the initial target of five steps. Streamlining started in 2015, and an inspection was conducted. There was a significant increase in the number of new permits, with a total of 418 for new applications and 473 for renewals, with a capitalization of P52M+ and gross sales P2B+. A slump was experienced in 2016 since the focal person ended her contract. She was rehired in mid-2016, and activities resumed.
The onset venue for One Stop Shop was amiss in 2017 when the incumbent mayor, Hon. Edgar Lignes assigned the 2nd floor of the Negosyo Center to be the Business One Stop Shop (BOSS), and all regulatory office personnel were co-located and came together. Finally, in October 2019, Business Permit and Licensing Office and BOSS were installed with the whole year-round function at the new city hall.
In January 2020, the new spacious office served the business operators comfortably, with refreshments and entertainment available. With the RSP mandate and JMC 2010-01, the local government unit created the Joint Inspection Team (JIT). An EBPLS program was funded to include travel, training allowances, uniform, supplies, fuel, and purchase of JIT vehicles. An inspection was conducted after evaluation of the conduct of BOSS and in preparation for the renewal for the succeeding year. The streamlined process is in place, and with continued monitoring and evaluation, it was enhanced and became compliant with JMC-DTI-DILG-DICT No. 01-2016. They implemented that new applications require four documents to be submitted, while renewal will only need two documentary requirements.
Due to the efficient and simple process of issuing business permits, there was a tremendous increase in the number of permits issued in relation to gross sales and capitalization. This also resulted in a remarkable raise in business tax and regulatory fees. The business operators were educated in setting up their business compliant with local and national regulations. The conferencing of the Joint Inspection Team and the Business One Stop Shop members led to the respectability of individual regulations, which was further understood and implemented.
In 2017, 226 new permits were issued, then 408 for 2018 and 483 for 2019. Renewals for the three years were 758, 887, and 1,080, respectively. The Seal of Good Housekeeping was issued in 2011, and the Seal of Good Local Governance (SGLG) was awarded in 2015. The City Government failed to bag an SGLG award last 2016 due to a missed point, but they improved and were again awarded the SGLG every year from 2017 to 2019. During the renewal period from January to February of 2020, new and renewal issuances are 329 and 1,245. The business tax income and regulatory fees that was earned from 2014 to 2019 are as follows; Php 5,563,227.02, Php 6,730,603.54, Php 8,164,697.29, Php 9,202,075.87 Php 32,791,707.99 and Php 58,318,374.25. The Ombudsman awarded the Streamlined Business Permit and Licensing System a Blue Certification Level I in compliance with their standards. These are the fruits of labor in implementing the good practices performed and carried out.
Inspection activities were regularly conducted to ensure the quality of service. In 2019, the LGU partnered with the Department of Tourism and the Department of Environment and Natural Resources (DENR) to set up a business for tourism-related establishments and to address DENR concerns. The aim is to be the economic capital in the western part of Misamis Oriental while ensuring environmental safety. The Joint Inspection Team has learned from each other’s regulations, resulting in a concerted effort to implement such. In the past six years of learning and experiences, public safety and welfare were highlighted as the prime purpose of issuing business permits. During the renewal period from January to February of 2020, business tax income reached Php 29,117,529.34 minus the regulatory fees. The continued monitoring and evaluation of the Enhanced Business Permit and Licensing System garnered positive feedback and was regarded as “simple, efficient, and business-friendly.”