Republic of the Philippines

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

DILG-NAPOLCOM Center, EDSA Cor., Quezon Avenue. QUEZON CITY
www.dilg.gov.ph

MEMORANDUM CIRCULAR
NO.

TO : ALL PROVINCIAL GOVERNORS, CITY MAYORS, MUNICIPAL

MAYORS, AND OTHERS CONCERNED

SUBJECT : GUIDELINES ON BUILDING BUSINESS-FRIENDLY AND

COMPETITIVE LGUs (BBFCL) INITIATIVES FOR CY 2014

DATE : MAY XX, 2014

I. BACKGROUND

In keeping with the national governments development agenda to achieve inclusive

growth, the Department of the Interior and Local Government (DILG) directs its efforts in
pursuing five (5) Program outcomes, namely: Business-Friendly and Competitive local
government units (LGUs); Environment Protective, Climate Change Adaptive, and
Disaster Resilient LGUs; Socially-Protective and Safe LGUs; Accountable, Transparent,
Participative and Effective Local Governance; and Strengthened Internal Organizational
Capacity.

Business Friendly and Competitive LGUs can be achieved when LGUs spur sustainable
local economic development by engaging the business sector, in engaging local trades/
businesses, putting up investments, and creating employment/jobs. This can be attained
when LGUs bring about an environment where economic development is possible and
sustainable, either through the responsible use of their powers provided in the Local
Government Code, or promoting and implementing programs and projects that boost their
economic and business potentials, such as reforming their current systems for processing
businesses and permits or adopting practices that enable them to attract more businesses
and investments in their communities -- or both -- which are vital for livelihood and
employment opportunities to flourish, benefitting in the process the constituents,
especially the marginalized sector.

The 2013 Travel & Tourism Competitiveness Report by the World Economic Forum
(WEF) has listed the Philippines as the most improved country in the region, ranking
16th regionally and 82nd overall out of the 140 economies covered by the study. The
country jumped 12 spots, up from 94th in the last report in 2011. The report calculates a
Competitiveness Index (TTCI) based on three categories: regulatory framework, business
environment and infrastructure, and human, cultural, and natural resources.

To improve the countrys competitiveness thru reduced cost of doing business, it is vital
that business permitting be further streamlined. The government, since 2010 embarked
on a government-wide effort to streamline business permitting, with service standards
being set thru a Joint Memorandum Circular No. 1(series of 2010) between the
Department of the Interior and Local Government (DILG) and the Department of Trade
and Industry (DTI). Based on the monitoring report of DILG, more than 400 cities and
municipalities have streamlined their business permits and licensing systems (BPLS) to
date.

II. OBJECTIVES

The BBFCL aims to help LGUs be competitive and business-friendly by:

1. Streamline Business Permits and Licensing System (BPLS) and other Regulatory
Services.
2. Develop Business Plan.
3. Provide Technical Assistance on Comprehensive Development Planning for
LGUs.
4. Organize and strengthen Local Economic Development and Investment
Promotion (LEDIP) Team/Office.
5. Support resource and revenue generation.

III. PROGRAM COMPONENTS

1. Streamlining of Business Permits and Licensing System (BPLS) and other

Regulatory Services

This component sets up the streamlined BPLS process including

regulatory processes/procedures which aims at simplification and
standardization. The reforms will focus on three standards, i.e. no. of
steps, maximum no. of processing time, no. of signatories, following
anti-red tape law and adoption of unified application form.
Complementing these standards are other reforms like reducing the
one-time assessment and payment, joint inspectorate teams, reducing
the face-to-face contact with applicants, and establishment of One-
Stop-Shop.

2. LGU Business Plan Development

An LGU Business Plan (BP) is a tool to help LGUs identify critical

business opportunities available in the locality and maximize its
resources in pushing toward economic activities at the local level. The
project aims to capacitate LGUs through the Guide for LGU Business
Planning that is intended to be an analytical tool to operationalize the
LGUs economic development sector plan in the context of investment
planning a way which an LGU attracts investments and resources to
push forward its economic agenda. Additionally, it also helps investors
identify investment priority areas that will create a wealth of
investments and jobs in the locality.

3. Comprehensive Development Planning for LGUs

The project aims to provide technical assistance to LGUs through

coaching and mentoring in the formulation/ updating of their CDP,
which is a multi-sectorial plan of the LGUs, being among the basic
requirements supportive of efforts for sustainable economic
development and employment generation.
 4. Organization and Strengthening of Local Economic Development and
Investment Promotion (LEDIP) Team/Office

The project aims to provide assistance to LGUs through coaching and

mentoring in organizing and capacitating active LEDIP Teams and
encouraging the designation of permanent LEIPOs

5. Resource and Revenue Generation

This project aims to provide LGUs new ways and technologies to

explore financing and resource mobilization schemes in order to
establish an accountable fiscal autonomy and energize the quality of
fiscal leadership. It helps the LGUs to broaden their tax base and explore
avenues to enhance their collection efficiencies through the updating of
their local revenue code. It likewise assist LGUs formulate their Local
Investments and Incentives Code (LIIC).

IV. IMPLEMENTATION AND STRATEGY (DILG-LGU)

1. Identification of target LGUs

2. Technical Assistance by DILG to the requesting LGUs (demand driven)

3. Replication of best practices/benchmarking

V. EFFECTIVITY

This Memorandum Circular will take effect immediately.

MAR ROXAS
Secretary