by Greg G. Deligero
AS AN offshoot of the Doing Business in the Philippines 2011 report released last December 8 by the World Bank’s International Finance Corporation (IFC), more reforms are being sought by the world’s largest multilateral finance institution for consideration of the city government and other concerned agencies.
The report earlier disclosed that among the 25 key cities in the country, securing construction permits is easiest in Davao City which also ranks second easiest to start a business but is 20th with regards to registering a property.
The Doing Business report encompasses two types of data: readings of laws and regulations and time and motion indicators that measure the efficiency and complexity in achieving a regulatory goal, as well as cost estimates recorded from official fee schedules.
As a result of the report’s findings, the IFC released last week a follow-up Doing Business in Davao City Report containing a summary of findings of its key recommendations.
Property registration
In the area of property registration, the follow-up report spelled out the need to complete the computerization of the register of deeds and monitor performance under the new system.
“The register of deeds in Davao City takes 14 days to complete registration and issue the new title. Processing can be enhanced with full implementation of the Land Registration Authority’s Computerization Program,” it said.
It also cited the need to introduce fast-track procedures after noting that the Bureau of Internal Revenue in Davao City takes 14 days to process the Certificate Authorizing Registration while other cities only take up to seven days.
“As a measure, the agency can offer a choice of expedited procedures: pay a slightly higher fee for faster completion of the registration process. Cases would be prioritized in a transparent manner, and those who prefer not to wait would be given an official way to speed up the process,” the IFC said.
It also stressed the need to convert notary fees in the deed of sale from percentage fees to fixed fees.
“Notarial fees charged by lawyers for the notarization of the deed of sale are pegged at a percentage of the value of the property being sold. For the entrepreneur, paying 2% of the property value for the signature and seal of a lawyer who was not privy to the sale negotiations is unduly expensive,” it said.
“The city government may want to consider initiating a dialogue with the local chapter of the Integrated Bar of the Philippines regarding its schedule of notarial fees and propose converting the percentage-based notarial fees into fixed fees that are independent of the value of the property,” it added.
Construction permits
In dealing with construction permits, the IFC classified the procedures being done in the city as “good practice.” “It costs 94.2% of income per capita to deal with construction permits in Davao City: the cheapest among all Doing Business cities,” it said.
Still, the IFC sees the need to improve the efficiency of inspections, particularly in zoning validation.
“Davao City is one of the six cities that requires the entrepreneur to obtain zoning validation from the CPDO (City Planning and Development Office) as a prerequisite for obtaining the Certificate of Occupancy. This validation confirms that the warehouse has complied with the issued locational clearance. Instead of performing a separate inspection, it would be advisable for the CPDO to conduct a joint inspection with the Office of the Building Official and the Bureau of Fire Prevention at critical phases of the construction,” it said.
Starting a business
When it comes to processes involved in starting a business, the city-specific report sees the need to simplify the local business permit requirements by eliminating the notarization of business permit application for and review the basis for certain business permit fees.
“The city government requires registrants to have the mayor’s permit application form notarized before submission. While it is generally believed that requiring applicants to make statements under oath serves as a disincentive to lying on their business permit applications lest they be found liable for perjury, only two out of the 25 Doing Business cities have actually prosecuted applicants who were found to have lied in their application forms,” it noted.
“The city government may thus wish to revisit its reasons for requiring notarization. One way they can address fraud in business permit applications would be to simply refuse renewal of the business permit the following year,” it added.
To make business start-up less costly, the IFC said the city may wish to remove unnecessary fees such as license fee, laboratory fee and tax clearance.
The report also emphasized the need to improve transparency and foster publication of business procedures.
It noted that although the business application form is available online, the applicant still submits the filled out application form to the BBPLD (Business Bureau-Permits and License Division), which proceeds to encode the application form.
“This defeats the purpose of uploading the form online. The BBPLD should consider accepting the form itself: this would significantly reduce printing costs and cut down processing time. This also saves time for the applicant, who need not fall in line, to submit the application form,” it said.
The IFC also raised the need to create a one-stop shop for local and national level registration requirements.
“One-stop shops can reduce the number of procedures, time and cost to start a business. In the Philippines, corporate registrations could be integrated with tax registration and with social service registration. Further reform could also integrate local business permits with national procedures. This is one of the goals of the Philippine Business Registry (PBR). For the PBR to succeed, all concerned agencies must commit to this initiative,” it said.
