BPLS Reform Program Guide - National Computer Center

BPLS REFORM PROGRAM 

GUIDE 

Promoting Local Business Permit and Licensing 

System Reform in the Philippines 

December 2011 

This publication was produced by Nathan Associates Inc. for review by the United States Agency for 

International Development.

BPLS REFORM PROGRAM 

GUIDE 

Promoting Local Business Permit and Licensing 

System Reform in the Philippines 

DISCLAIMER 

This document is made possible by the support of the American people through the United States Agency for 

International Development (USAID). Its contents are the sole responsibility of the author or authors and do 

not necessarily reflect the views of USAID or the United States government.

Contents 

Acronyms v 

Acknowledgements vii 

1. Global Competitiveness and BPLS Streamlining 1 

1.1 Competitiveness Defined 1 

1.2 Global Surveys on Competitiveness 1 

1.3 National Surveys on Competitiveness 3 

1.4 Awards and Incentives 6 

2. Understanding BPLS Reforms 9 

2.1 What is BPLS streamlining? 9 

2.2 Legal Basis for BPLS Reforms 10 

2.3 The Government BPLS Program 11 

2.4 Institutional Structures and Mechanisms 17 

3. Past BPLS Reforms in the Philippines 21 

3.1 BPLS Initiatives Between 2001–2010 21 

3.2 BPLS Initiatives Since 2010 26 

3.3 Lessons Learned 29 

4. Accelerating BPLS Reforms 33 

4.1 Challenges 33 

4.2 Next Steps 35 

References 39 

Appendix A. BPLS Unified Form 

Appendix B. Assessing Business Processes 

Appendix C. Milestones in the BPLS Reforms Program

IV 

Illustrations 

Figures 

Figure 2-1. Macro-View of BPLS Processes 9 

Figure 2-2. BPLS Streamlining Program Coverage by LGU Level 16 

Figure 2-3. Institutional Support for BPLS Reforms 18 

Tables 

Table 1-1. Philippine Ranking in Global Competitiveness Surveys, 2006-2012 2 

Table 1-2. Global Competitiveness Rankings of ASEAN Nations, 2011 2 

Table 1-3. Ease of Doing Business for Select ASEAN Countries, 2010-2011 3 

Table 1-4. Comparison of Philippine Cities in Processing Business Start-Ups 4 

Table 1-5. Top Three Ranked Cities in the PCCRP, 2009 6 

Table 2-1. Regional Allocation of Cities and Municipalities in the BPLS Program 16 

Table 3-1. BPLS Implementation in Central Luzon 22 

Table 3-2. BPLS Pilot Areas in the Visayas 24 

Table 3-3. Status of BPLS Streamlining in Targeted LGUs by Region, July 2011 27 

Table 3-4. Summary of BPLS Accomplishments in Butuan and Cagayan de Oro 28 

Table 3-5. Summary of Official Development Assistance to BPLS Reforms 30

Acronyms 

AECID Agencia Española de Cooperación Internacional para el Desarrollo (Spanish 

Agency for International Development Cooperation) 

APC Asian Institute of Management Policy Center 

ARTA Anti-Red Tape Act 

ASEAN Association of Southeast Asian Nations 

BFP Bureau of Fire Protection 

BPLS Business Permitting and Licensing System 

BOSS Business One-Stop Shop 

BPLO Business Permitting and Licensing Office 

CDA Cooperative Development Authority 

CESO Career Executive Service Board 

CLIPC Central Luzon Investment Promotion Center 

CLICC Central Luzon Investment Coordinating Council 

CLGCFI Central Luzon Growth Corridor Foundation Inc. 

CICT Commission on Information and Communication Technology 

CSC Civil Service Commission 

CSOs Civil Society Organizations 

DBS Doing Business Survey 

DILG Department of the Interior and Local Government 

DLG Working Group on Decentralization and Local Government 

DP Decentralization Project 

DTI Department of Trade and Industry 

eBPLS Electronic Business Permitting and Licensing System 

eGov4MD Electronic Governance for Municipal Development 

FSIC Fire Safety Inspection Certificate 

GCI Global Competitiveness Index 

GCY Global Competitiveness Yearbook 

GIC Working Group on Growth and Investment Climate 

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Technical 

Cooperation Agency) 

IEC Information, Education and Communication 

IFC International Finance Corporation 

ISO International Organization for Standardization 

IMD International Institute if Management Development 

JMC 2009 Joint Memorandum Circular No. 01 Series of 2009 

JMC 2010 Joint Memorandum Circular No. 01 Series of 2010

VI 

JDAO Joint Department Administrative Order 

LCE Local Chief Executive 

LCP League of Cities of the Philippines 

LGA Local Government Academy 

LGU Local Government Unit 

LINC-EG Local Implementation of National Competitiveness for Economic Growth 

LIR Local Investment Reform 

LMP League of Municipalities of the Philippines 

LRED Local Regional Economic Development 

MAP Management Association of the Philippines 

MDC Mayor’s Development Center 

MOA Memorandum of Agreement 

MOC Memorandum of Commitment 

NCR National Capital Region 

NEDA National Economic Development Authority 

NERBAC National Economic Research and Business Center 

NGA National Government Agencies 

NCC1 National Competitiveness Council 

NCC2 National Computer Center 

MCC Millennium Challenge Corporation 

PCCI Philippine Chamber of Commerce and Industry 

PCCRP Philippine Competitiveness Ranking Project 

PDF Philippine Development Forum 

PhilHealth Philippine Health Insurance Corporation. 

PBR Philippine Business Registry 

PSP Private Sector Promotion 

RSP Regulatory Simplification Project 

SEC Securities and Exchange Commission 

SBRP Simplified Business Registration Process 

SNDB Sub-National Doing Business 

SSS Social Security System 

TAG Transparency Accountable Governance 

TOT Training of Trainers 

TWG Technical Working Groups 

USAID United States Agency for International Development 

WEF World Economic Forum

Acknowledgements 

Managed for USAID/Philippines by Nathan Associates Inc., LINC-EG—Local Implementation 

of National Competitiveness for Economic Growth—is a three-year project that began in 2008. 

LINC-EG assists policymakers in improving the environment for private enterprise to establish, 

grow, create jobs, and help reduce poverty. 

This guide was developed under the LINC-EG Project to assist the Philippine government in 

improving subnational systems for business permitting and licensing (BPLS). It is intended as a 

reference document for national and local governments and builds on the work of the Philippine 

government and other development partners, noting some past achievements. More significantly, 

the guide explains recent policy developments that provide for the cross-departmental, legal and 

institutional basis for BPLS reform and how these can help to support and fast track further 

improvements in the interface between government and business. 

Consultant Lucy Lazo conducted extensive research and writing, Ofie Templo provided 

administrative oversight of the information gathering stage, Alid Camara and Mikela Trigilio of 

Nathan Associates provided additional analysis and editing of the report. Executive Director 

Marivel Sacendoncillo and the staff of the Local Government Academy, an arm of the 

Department of the Interior and Local Government, were particularly supportive with their time 

and advice on what to include in this document.

1. Global Competitiveness and 

BPLS Streamlining 

1.1 COMPETITIVENESS DEFINED 

Competitiveness encompasses the institutions, policies, and other factors that determine a 

country’s level of productivity (World Economic Forum 2010). The level of productivity, in turn, 

determines the level of prosperity that a country can sustain. Thus, competitive countries tend to 

produce higher incomes for their citizens. Productivity also determines an economy’s rate of 

return on investments. Because investments—physical, human, and technological—are 

fundamental drivers of economic growth, a competitive economy is one that is likely to grow 

faster in the medium to long term. 

Institutions have a strong bearing on competitiveness and growth because they influence 

investment decisions and the organization of production. 1 Of relevance in this report is the 

institutional aspect of operations efficiency as manifested in excessive bureaucracy and red tape 

involved in the granting of business permits. 

1.2 GLOBAL SURVEYS ON COMPETITIVENESS 

Since 2008 the Philippines has been falling in the ranks of annual competitiveness surveys, a fact 

that has given impetus to efforts to streamline business permitting and licensing systems in the 

country. The three main surveys that measure competitiveness across countries are 

• The Global Competitiveness Index (GCI) published by the World Economic Forum 

(WEF), 

• The Doing Business Survey (DBS) of the World Bank (WB) and the International 

Finance Corporation (IFC), and 

• The Global Competitiveness Yearbook (GCY) of the International Institute of 

Management Development (IMD). 

Published annually since 2005, the GCI has about 111 indicators covering 12 categories of the 

microeconomic and macroeconomic foundations of national competitiveness. The DBS analyzes 

regulations that apply to domestic small and medium-size companies using sets of 11 indicators. 

1 Institutions are one of the 12 pillars of competitiveness in the Global Competitiveness Report 2010-2011 

(World Economic Forum 2010).

2 BPLS R EFORM P ROGRAM G UIDE 

In 2011 the DBS covered 183 economies. The GCY has 331 criteria in 5 economic areas and 

covered 59 countries in 2011. 

The Philippines has always ranked in the bottom third of countries covered in these surveys 

(Table 1-1). From 2008 to 2011, the country's rank deteriorated across the board, although the 

GCI for 2011-2012 reported a 10 point improvement for the Philippines. According to the GCI 

the Philippines is weakest in indicators for corruption, bureaucracy, infrastructure efficiency, and 

policy stability. The GCY cites weakness in international investment, infrastructure, and 

education; and DBS calls for improvement in starting a business, dealing with construction 

permits, and protecting investors. 

Table 1-1 

Philippine Ranking in Global Competitiveness Surveys, 2006-2012 

Survey 2006 2007 2008 2009 2010 2011 2012 

GCI 71 

(125) 

75 

(122) 

71 

(131) 

GCY 42 45 40 43 39 41 - 

DBS 121 

(175) 

126 

(175) 

133 

(178) 

71 

(134) 

141 

(181) 

SOURCES: Compiled from the Global Competitiveness Reports, 2006-2011, IIMD and DB surveys. 

In gauging its competitiveness, the Philippines must benchmark itself against developing 

economies and its Association of Southeast Asian Nations (ASEAN) neighbors who are all vying 

for foreign investment. Unfortunately, the Philippines is lagging behind its ASEAN neighbors in 

competitiveness surveys, even against newcomer Vietnam (Table 1-2). In the 2011 DBS, the 

Philippines and Thailand were the only ASEAN countries to decline in the rankings. Malaysia, 

Indonesia, and Vietnam all recorded improvements, with Vietnam outperforming all others with a 

jump from 93 in 2010 to 78 in 2011. The Philippines dropped four places from the previous year. 

Table 1-2 

Global Competitiveness Rankings of ASEAN Nations, 2011 

Survey Malaysia Thailand Indonesia Vietnam Philippines 

GCI, 2011-2012 21 39 46 65 75 

GCY, 2011 10 26 35 - 39 

DBS, 2011 21 19 121 78 148 

SOURCES: Compiled from WEF, IMD and DB survey 2011 Reports. 

How the Philippines performs in comparison with its ASEAN neighbors in starting a business, 

dealing with construction permits, and registering a property is shown in Table 1-3. The gap in 

rank between the Philippines and the other ASEAN countries is widest in dealing with 

construction permits and in registering property, where Thailand has so far been trailing only 

Singapore, which is the best performer in the region. The number of procedures followed in the 

Philippines is generally more than in its neighbors and the cost of securing the permit is higher. 

87 

(133) 

144 

(183) 

85 

(139) 

148 

(183) 

75 

(142) 

-

G LOBAL C OMPETITIVENESS AND BPLS STREAMLINING 3 

The country’s cumbersome process for business start up has proven to be a strong disincentive for 

entrepreneurs. Reducing the number of procedures will shorten processing time. Hence, to move 

closer to the ranking of its ASEAN neighbors, the Philippines must prioritize these two areas for 

reform. Using ASEAN as a benchmark is vital as it raises the bar for improving the Philippines’ 

competitiveness. 

Table 1-3 

Ease of Doing Business for Select ASEAN Countries, 2010-2011 

Criteria Singapore Thailand Malaysia Vietnam Indonesia Philippines 

Ease of Doing Business (rank) 1 19 21 78 121 148 

1. Starting a business (rank) 4 95 113 100 155 156 

a. Procedures (number) 3 7 9 9 9 15 

b. Time (days) 3 32 17 44 47 38 

c. Cost (% of income per capita) 0.7 5.6 17.5 12.1 22.3 30.3 

d. Minimum Capital (% of Income) 0 0 0 0 53.1 6.0 

2. Dealing w/ construction permits 

(rank) 

SOURCE: Doing Business Survey, 2011, 

2 12 108 62 60 156 

One caveat about these surveys is that they are based on a combination of statistics and 

perception surveys that sometimes leads to puzzling results. On some indicators, the Philippines 

ends up ranking lower than we would like to believe. This tells us that perception (and 

communication to correct any misperception) is an element that does not receive enough attention 

(Luz 2011). 

1.3 NATIONAL SURVEYS ON COMPETITIVENESS 

Global surveys may be a good indicator of a country’s competitiveness, but many reforms critical 

to generating investment are needed at the sub-national level. This is especially so in the 

Philippines which has been decentralizing since 1991. The microeconomic foundation of 

competitiveness pertains not only to sectors but also to geographical development. Hence, the 

desire to improve competitiveness spurred the conduct of two city-level competitiveness surveys 

in 2011: the IFC’s Sub-National Doing Business Survey (SNDB) and the Philippine Cities 

Competitiveness Ranking Project (PCCRP). The Asian Institute of Management Policy Center 

(APC) conducted both surveys. 

Sub-National Doing Business Survey 

Conducted in 2011 with support from USAID’s through the Local Implementation of National 

Competitiveness for Economic Growth (LINC-EG) project, the SNDB is based on the DBS but 

covers only 3 of the 11 areas of business regulation that pertain to municipal and city 

governments, and where local differences exist (i.e., starting a business, dealing with construction 

permits, and registering property).


According to the 2011 SNDB, a business applicant has to follow 15 to 22 steps to start a business 

in major cities, with Cebu City and Manila requiring the least number of steps (Table 1-4). The 

average number of steps in East Asia and the Pacific is 7.8, while the average number in member 

countries of the Organisation for Economic Co-operation and Development (OECD) is 5.6. 2 On 

average it takes 30 days to process applications in the Philippines but only 13.8 days in OECD 

countries. And, on average, the Philippines has only two fewer procedures than Equatorial 

Guinea, the country with the most procedures among the 183 countries surveyed (DGB 2011). 

Certainly this is not a salutary situation for the Philippines. 

Table 1-4 

Comparison of Philippine Cities in Processing Business Start-Ups 

Too many requirements to start a business 

SOURCE: Doing Business 2011: Making a Difference for Entrepreneurs. 

Financial & Private Sector Development 

2 The OECD has 34 member countries, mostly advanced economies with some emerging countries like 

Mexico, Chile and Turkey.


Local requirements for some cities add to the time it takes to start a business. Examples of these 

requirements include the notarization of the business permit applications and securing of 

environmental permits and location clearances. Some cities require the verification of real 

property tax payments (e.g., Cagayan de Oro, Lapu-Lapu and Mandaue), while others require a 

stamp of approval for the Certificate of Occupancy (i.e., Muntinlupa), or police clearance as in 

Zamboanga. 

In addition to local requirements, firms have to meet the requirements of National Government 

Agencies (NGAs). The National Internal Revenue Code and Bureau of Internal Revenue (BIR) 

require entrepreneurs to buy special accounting books, obtain authorization to print receipts, and 

have the printed receipts stamped by the BIR (Doing Business Philippines 2011). 

Philippine Cities Competitiveness Ranking Project 

Conducted by the APC since 1999, the Philippine Cities Competitiveness Ranking Project 

(PCCRP) is based on the IMD’s World Competitiveness Yearbook (WCY) and uses Michael 

Porter’s diamond theory as framework. The indicators used in the project are government 

efficiency, economic performance, business efficiency, and infrastructure. The 2009 PCCRP 

covered six competitiveness drivers, weighted as follows: 

1. Dynamism of the local economy (20 percent) 

2. Cost of doing business (15 percent) 

3. Infrastructure (17.5 percent) 

4. Responsiveness of the LGU to business needs (20 percent) 

5. Human resources and training (10 percent) 

6. Quality of life (17.5 percent). 

The 2011 PCCRP was supported by the German Agency for International Cooperation (GIZ) 3 , 

USAID’s LINC-EG (APC 2009, 11-16) and other partners. It covers 29 cities categorized into the 

three groups on the basis of level of development: emergent cities, growth centers, and 

metropolitan growth centers. 4 Table 1-5 presents the top three cities in these categories. In the 

overall standings, Cebu City, Cagayan de Oro, Dagupan City ranked the highest in their 

respective categories. 

In the PCCRP, the complexity of business registration is reflected in the criterion of 

“responsiveness of city government to business needs,” which has a weight of 20 percent. There 

are five subcategories under this criterion, one of which pertains to the “degree of ease of doing 

business,” which is measured by (1) the length of time to renew business permits and (2) rating of 

the process and procedures for renewing business permits. The former is based on hard data while 

the latter is based on perception. By this criterion, the cities that ranked the highest were Davao, 

Bacolod, and Tacloban. 

3 Formerly the German Agency for Technical Cooperation (GTZ). 

4 Levels of development were measured on the basis of population and income (excluding internal revenue 

allotment).


Table 1-5 

Top Three Ranked Cities in the PCCRP, 2009 

City 

Overall 

Rank 

Dynamism 

of Local 

Economy 

(20%) 

Cost of 

Doing 

Business 

(15%) 

Ranking according to PPCRP Criteria 

Infrastructure 

(17.5%) 

Human 

Resources 

Training 

(10%) 

M ETROPOLITAN G ROWTH C ENTERS 

LGU 

Responsiveness 

(20%) 

Cebu 1 1 2 1 1 2 2 

Davao 2 2 1 2 2 1 1 

G ROWTH C ENTERS 

Cagayan de Oro 1 1 3 2 3 3 3 

Bacolod 2 5 6 7 3 1 2 

Zamboanga 3 7 1 4 3 6 5 

E MERGENT C ITIES 

Dagupan 1 7 5 1 11 2 5 

Tacloban 2 8 13 10 1 1 5 

San Fernando 3 9 2 3 6 3 1 

SOURCE: AIM. 2010 Cities and enterprises, Competitiveness and Growth: Philippine Cities Competitiveness Ranking 2009. 

Quality 

of Life 

(17.5%) 

1.4 AWARDS AND INCENTIVES 

Awards are given to motivate local governments to make the reforms necessary to attract 

investment. The Philippine Chamber of Commerce and Industry (PCCI) sponsors the annual 

Most Business-Friendly Local Government Units (LGUs) Award, which complements the 

national government initiative to benchmark outstanding reforms in governance that promote 

local trade and investment and ensure accountability, transparency, and efficiency in public 

service. There are two levels of award. Level One covers all highly urbanized cities and higher 

income LGUs (1 st to 3 rd class), while Level Two includes lower income LGUs (4 th to 6 th class). In 

2010 winners were selected on the basis of self-assessment reports and interviews conducted by a 

distinguished panel of judges chaired by former Senator Aquilino Pimentel Jr. Winners received a 

certificate of donation for one school building from officers of the Federation of Filipino-Chinese 

Chamber of Commerce and Industry, Inc. 

In the 36th Philippine Business Conference in 2010, five LGUs received awards for being 

business-friendly: 

1. City of San Fernando, Pampanga (city level 1) 

2. Candon City, Ilocos Sur (city level 2) 

3. Municipality of Carmona, Cavite (municipal level 1) 

4. Municipality of Guimbal, Iloilo ( municipal level 2) 

5. Leyte for (province level 1). 

Six LGUs received special citations for outstanding efforts in each of the award criteria: 

1. La Union Province - trade, tourism and investment promotions


2. Talavera, Nueva Ecija - quality customer service 

3. San Nicolas, Ilocos Norte - public-private sector partnership 

4. Tarlac - micro, small, and medium enterprise development 

5. Olongapo - investment promotions 

6. Pangasinan - quality management and systems innovation. 

Another incentive is the EXCELL Awards, a project of Department of the Interior and Local 

Government (DILG) Region 6 to recognize the best managed local governments in the region. 

Awardees follow best practices and demonstrate achievements and innovations in governance, 

administration, social services, economic development, environmental management, and local 

legislation. The project also aims to advocate for transparency and accountability in governance, 

reinforce good performance, popularize replicable best practices, and identify interventions to 

improve LGU performance. Each major awardee receives P50,000 and special awardees each 

receive P10,000. 

The 2010 awardees were as follows: 

1. Negros Occidental—best performing province and all special awards in the provincial 

category 

2. San Carlos City—Negros Occidental best performing city and excellence in 

environmental management, economic development, social services 

3. Oton, Iloilo—best performing 1st to 3rd class municipality and excellence in local 

legislation 

4. Anilao, Iloilo—best performing 4th to 6th class municipality and excellence in local 

legislation, administrative governance, social services. 

Special awardees were as follows: 

1. Bacolod City and Kabankalan City—excellence in local legislation (city category) 

2. San Jose de Buenavista, Antique and Iloilo City—excellence in administrative 

governance for 1st to 3rd class municipalities and cities, respectively 

3. Miagao, Iloilo—excellence in social services 1st to 3rd class municipalities 

4. Miagao, Iloilo and Guimbal, Iloilo —excellence in economic development for 1st to 3rd 

class and 4th to 6th class municipalities, respectively 

5. Panay, Capiz and Guimbal, Iloilo—excellence in environmental management for 1st to 

3rd class and 4th to 6th class municipalities, respectively.

2. Understanding BPLS 

Reforms 

2.1 WHAT IS BPLS STREAMLINING? 

Streamlining the business permitting and licensing system (BPLS) means implementing 

systematic and purposeful interventions to ease business start-up (e.g., simplifying registration 

process by reducing the number of steps and procedures and reducing processing times and cost). 

Streamlining can accelerate revenue mobilization, improve expenditure management, and 

increase access to finance for better service delivery and growth promotion. 

As shown in Figure 2-1, complying with the requirements of NGAs directly affects LGU 

processes. Such requirements include approval of business name registration by the Department 

of Trade and Industry (DTI) for single proprietorships, by the Securities and Exchange 

Corporation (SEC) for corporations, and by the Cooperative Development Authority (CDA) for 

cooperatives. During the renewal period, applicants must also obtain certifications from social 

security agencies. Streamlining must therefore happen at the national as well as the local level. 

However, for the purposes of this paper, we will focus on local BPLS reforms. 

Figure 2-1 

Macro-View of BPLS Processes 

NGA 

DTI, SEC, CDA 

Business name, 

BIR registration 

LGU 

BPLO 

Taxes, 

Clearances, 

Fees, 

Mayor’s Permit 

NGA 

SSS, PHILHEALTH 

Registration for 

medical insurance 

and social security


2.2 LEGAL BASIS FOR BPLS REFORMS 

The policy platform for BPLS streamlining dates back to the 1990s. Republic Act 7470, signed in 

1992, created the National Economic Research and Business Assistance Center (NERBAC), 

which was envisioned as a center to “facilitate the processing of all government requirements 

necessary for the establishment of a business.” This directive was the basis for organizing 

NERBACs as registration centers that help applicants meet requirements for business start-ups. 

The momentum for BPLS reforms started in earnest during the term of then-President 

Macapagal-Arroyo. In her first State of the Nation Address in 2001, she directed national 

government agencies to reduce red tape by cutting in half the number of signatures required for 

their services. For LGUs, her message was “to streamline their operations, slash red tape. There 

must be continuity between the national and local governments in their efforts to be investorfriendly.” 

DTI Region 3 took this directive seriously and began streamlining business registration 

procedures (see BPLS Initiatives Between 2001–2010 ). Two years later, on September 15, 2003, 

Memorandum Order No. 117 was issued. It mandated local authorities to simplify and rationalize 

their civil application systems and for the Secretaries of DILG and DTI to facilitate the 

streamlining of procedures for permits and licenses, particularly business permits, building 

permits, certificates of occupancy, and other clearances. 

But the legal basis for the current BPLS reform program is RA 9485 or the Anti-Red Tape Act 

(ARTA) of 2007. In compliance with the Philippine Constitution provision that calls for 

simplifying government services, ARTA requires government instrumentalities and LGUs to 

deliver public services efficiently by reducing red tape. It identifies five aspects of service to be 

simplified: (1) steps in providing the service, (2) forms used, (3) requirements, (4) processing 

time, and (5) fees and charges. It also limits the number of signatories to five per request, 

application, or transaction and provides legal sanctions for noncompliance with the standards. 

Since the passage of ARTA, there have been a number of government policy issuances on BPLS 

reforms. Joint Memorandum Circular No. 01 Series of 2009 (JMC 2009) was signed on February 

18, 2010 by the DILG, DTI, the Department of Public Works and Highways, the Social Security 

System and the mayors of the National Capital Region (NCR). It requires “all LGUs to undertake 

a reengineering of their transaction systems, including time and motion studies, and mandates 

each LGU to prepare a Citizen’s Charter which will contain their respective service standards.” 

The JMC was the first attempt to standardize registration procedures at the NCR for new business 

applications. Its recommendations were formulated by a Technical Working Group organized by 

the League of Cities of the Philippines (LCP) consisting of the Business Permits and Licensing 

Officers (BPLOs) of the NCR. This circular was superseded by two policies signed on August 6, 

2010: 

• The DTI-DILG Joint Memorandum Circular No. 1, series of 2010 on the “Guidelines in 

Implementing the Standards in Processing Business Permits and Licenses in All Cities 

and Municipalities” (JMC 2010). 

• The Joint DTI-DILG Department Administrative Order No. 1, series of 2010 on the 

“Guidelines in Implementing the Nationwide Upscaling of Reforms in Processing 

Business Permits and Licenses in all Cities and Municipalities in the Philippines 

(JDAO).”

U NDERSTANDING BPLS R E FORMS 11 

The first circular is a landmark directive that sets standards for processing new applications and 

renewals consistent with ARTA. To ensure implementation of these standards, the second circular 

defines institutional support for the reforms by specifying the roles of DTI and DILG. It also 

organizes national and local committees to oversee the reform process. 

On January 31, 2011, the DILG issued a supplementary memorandum to further streamline 

BPLS. Memorandum Circular No. 2011-15 reiterates the basis for setting business fees and the 

issuance of conditional business permits in cases where the only lacking requirements are those of 

the social security agencies. 

2.3 THE GOVERNMENT BPLS PROGRAM 

BPLS streamlining as a government program began in 2009 when the DILG and DTI convened 

two working groups under the Philippine Development Forum (PDF): the working group on 

decentralization and local government (DLG) and the working group on growth and investment 

climate (GIC). Initially, the program was to streamline BPLS in as many LGUs as possible. But 

to do this the program had to 

• Set service standards for BPLS that LGUs can follow, 

• Develop and implement capacity building programs for LGUs as they streamline their 

business registration systems, 

• Organize government departments at the regional level to work with LGUs in 

implementing the BPLS reforms, and 

• Harmonize development partners’ reform initiatives on BPLS streamlining. 

This project laid the groundwork for scaling up reforms in 2010. When the new administration 

took over in 2010, no less than President Benigno Aquino III called on LGUs to “look for more 

ways to streamline our processes to make business start-ups easier.” Responding to this call, the 

DTI and the DILG scaled up the program and launched the Nationwide Streamlining of Business 

Permits and Licensing Systems (BPLS) Program on August 6, 2010, with the signing of the JMC 

2010. Hence, BPLS streamlining is associated with compliance with the service standards set in 

the JMC for processing business registration applications. 

Program Components 

The government’s BPLS program has five components, which are described below. 

Component 0: Mobilizing Champions for the BPLS Reform Process 

Implementing reforms requires securing the support of various sectors of society, namely: 

• Local chief executives. As reform implementers, it is important that LCEs act as local 

champions and provide financial and manpower support for the program. 

• LGU leagues. BPLS reforms involve cities and municipalities that issue the Mayor’s 

permits. Support from the League of Cities of the Philippines (LCP) and the League of 

Municipalities of the Philippines (LMP) is needed to encourage their respective members 

to participate in the program. These leagues can also provide capacity building support to


members as the LMP did through its Electronic Governance for Municipal Development 

(eGov4MD) project. 

• Private sector. National and local businesses, academia, and civil society organizations 

are important contributors to reform processes. As major beneficiaries of reforms, private 

business groups will be encouraged to monitor the progress of the program and 

participate as service providers to assist LGUs in the reform process. 

• Concerned NGAs and their regional offices. The BPLS process involves securing permits 

from NGAs, so it is important that these agencies streamline their own processes, provide 

manpower support to LGUs’ business one-stop shops (BOSS), and provide coaching 

assistance to LGUs during the reform process. 

• Development partners. Support is needed from development partners to scale up the 

BPLS reforms and conduct studies for the next wave of process streamlining. 

Component 1: Simplification and Standardization of the BPLS Process 

Using the ARTA as a framework, BPLS streamlining starts with process re-engineering that will 

enable LGUs to meet four service standards in processing registration applications: (1) use one 

application form; (2) limit the number of signatories; (3) reduce the number of steps; and (4) 

speed up processing time (see Performance Standards for a more detailed discussion of 

standards). 

Component 2: Computerization of the BPLS Process 

Efficient re-engineering requires some form of computerization. Government is encouraging 

LGUs to use information technology in streamlining BPLS. Existing BPLS software includes 

programs widely promoted by government (e.g., e-BPLS by the National Computer Center 

(NCC2). With the new BPLS standards in place, government intends to redevelop e-BPLS and 

will review BPLS software now in the market. The objective is to assist LGUs in choosing 

appropriate IT solutions for streamlined BPLS processes. The NCC2 is taking the lead in this 

component. 

Component 3: Institutionalization of BPLS Reforms 

To ensure the sustainability of BPLS reforms, legal instruments such as local regulations should 

be issued to support the streamlined processes. Otherwise, every change in administration will 

lead to a return to old practices. The government will therefore assist in (1) setting up a 

monitoring and evaluation system at the LGU and at the regional and the national offices of DTI 

and DILG; (2) organizing local business chambers and civil society organizations for process 

improvements and monitoring; (3) enjoining LGUs to work for International Organization for 

Standardization (ISO) certification of their BPLS; and (4) developing incentive systems to 

promote best practices. 

Component 4: Improvements in Customer Relations 

The BPLS program also addresses complaints of poor service in the permitting process. Hence, 

after the LGUs have completed process re-engineering, they are encouraged to keep improving 

how they deal with the public. This entails complying with consumer protection laws, such as the 

Anti-Fixing Act; setting up a complaints desk; and implementing the Citizens’ Charter. Other


areas of reform that can lead to a more customer-friendly BPLS include establishing Business 

One-Stop Shops (BOSS); conducting information, education, and communication campaigns; and 

training LGU staff in customer relations. 

Performance Standards 

The most significant policy pronouncement in this decade on BPLS reform may well be JMC 

2010 because it established the service standards against which LGU performance in BPLS 

reforms can be measured. JMC 2010 stipulates four performance standards for business 

registration: (1) use of a unified registration form, (2) limit on the number of steps that an 

applicant must take in applying for a permit, (3) limit on the processing time, and (4) limit on the 

number of signatories. 

Unified Business Registration Form 

An LGU must issue the Unified Business Registration Form (see Appendix A. BPLS Unified 

Form). That form contains all information and approvals needed for registration and facilitates 

exchange of information among LGUs and NGAs. In the past, every department in the LGU 

required applicants to fill out separate forms. The unified form was developed by a technical 

working group organized by the LCP. It is based on the form used by the Philippine Business 

Registry (PBR), a project of the DTI that aims to centralize data from NGAs involved in business 

registration (e.g., DTI, BIR, Securities and Exchange Commission, and the social security 

agencies). 

Standard Steps 

JMC 2010 enjoins cities and municipalities to ensure that applicants follow five steps in securing 

a mayor’s permit, whether for new applications or for business renewals: 

1. Get an application form from the city or municipality. 

2. File or submit the filled in form with required documents attached. 

3. Undergo one-time assessment of taxes, fees, and charges. 

4. Make one-time payment of taxes, fees, and charges. 

5. Secure the mayor’s permit. 

To be able to comply with these standard steps, JMC 2010 also recommends that LGUs adopt the 

following measures: 

• Conduct inspections in accordance with zoning and environment ordinances and 

building and fire safety, and health and sanitation regulations, which have been 

undertaken during the construction stage, within the year since issuance of the business 

permit. 

• Organize joint inspection teams (JIT) composed of the BPLO, the city/municipal 

engineer, the city/municipal health officer or representative, the city/municipal planning 

officer or designated zoning officer, the city/municipal environment and natural resources 

officer or representative, the city/municipal treasurer, and the city/municipal fire marshal.


• Forge a memorandum of agreement between the Bureau of Fire Protection (BFP) and the 

city/municipality, as necessary, to implement streamlined procedures for assessing and 

paying fire safety inspection fees that will enable the LGUs to implement the steps above. 

In addition, DILG Memorandum Circular No. 2011-15 encourages LGUs to issue a conditional 

permit to a business in cases where the “only lacking clearances are those of the SSS, Phil Health 

and PAG-IBIG, conditional upon the submission of the clearances after one month and the 

revocation or non-renewal of a business permit for failure to do so." 

Standard Processing Time 

Consistent with ARTA, cities and municipalities are enjoined to comply with prescribed times for 

processing and releasing business registrations: 

• Process and release new business permits in 10 days. LGUs are encouraged to strive for 

5 days or less, which is the average processing time in LGUs with streamlined BPLS. 

This processing is classified as a complex transaction following ARTA. 

• Process and release business renewals in 5 days. LGUs are encouraged to strive for one 

day or less, which has been achieved in many LGUs that have streamlined their BPLS. 

This processing is classified as a simple transaction. 

Signatories 

Cities and municipalities shall follow the prescribed number of signatories required in processing 

new business applications and business renewals based on the provisions of the ARTA, which 

limits the number of signatures in any document to five. However, LGUs are encouraged to 

require only two signatories, the Mayor and the Treasurer or the BPLO. To avoid delay in the 

release of permits, the Mayor may deputize alternate signatories (e.g., the Municipal or City 

Administrator or the BPLO). 

Proposed BPLS Procedures 

DTI and DILG have produced a manual that details the steps that LGUs may follow in 

streamlining BPLS. These steps include the following: 

1. Pre-streamlining Activities. These activities solicit the support of stakeholders and the 

commitment of LCEs for the reforms. They consist of conducting orientation workshops 

on the reforms, securing the commitment of LCEs to making the reforms, and organizing 

technical working groups to make the reforms. 

2. Diagnosis. This step is usually taken in “self-assessment" workshops in which the LGU 

(1) creates a current BPLS flowchart for new registrations and renewals, (2) assesses the 

process vis-a-vis the standards set by government, and (3) identifies gaps and strategies 

for bridging the gaps. 

3. Process Design. This step involves preparing the BPLS action or reform plan, which 

assigns responsible persons and defines budget requirements for the reforms. 

4. Institutionalization. This step ensures that the legal requisites for the reforms (e.g., 

executive orders and ordinances) are prepared and legislated at the local level.


5. Implementation. Implementation starts with preparation of the work plan and financial 

plan, and dry-runs of the streamlined process. 

6. Sustaining Reforms. Ensuring the sustainability of reforms involves setting up a 

monitoring system that includes client satisfaction surveys and engages stakeholders, 

such as local business chambers and civil society groups, to monitor LGU compliance 

with reforms. The more progressive LGUs have sought ISO certification for their BPLS. 

Target LGUs 

While all cities and municipalities are enjoined to streamline their BPLS, not all LGUs can be 

assisted with streamlining due to limited resources. Hence, it was agreed that the program will 

assist only a critical mass of LGUs. An LGU will be included on the basis of 

• The number of business establishments in the LGU. 

• The LGU’s investment potential, especially in relation to the government’s four priority 

sectors of 2009 (i.e., agribusiness, tourism, business process outsourcing and information 

technology (BPO-IT), and mining). 

• The LGU's being on the list of 120 “sparkplugs” identified by NCC1. 

• The LGU's inclusion in the government’s commitments to the Millennium Challenge 

Corporation. 

• The LGU’s being a recipient of projects in the development community. 

LGUs will not be automatically enrolled in the program unless (1) the LCE has expressed 

willingness to undertake the reform considering the investments associated with the program; and 

(2) there is private sector commitment in the locality to participate in the reform process. 

Figure 2-2 lists the coverage of the program according to levels of LGUs. Level 1 refers to the 17 

highly urbanized cities/municipalities in the NCR, most of which have streamlined BPLs. Level 2 

refers to LGUs with the most business establishments (excluding NCR), those identified by 

national government agencies as having good potential for attracting in the four priority sectors, 

and those named in the country's commitment to the Millennium Challenge Corporation. Level 3 

refers to LGUs not in Levels 1 and 2 but in the 120 "sparkplug” list. Level 4 refers to LGUs with 

ODA on BPLS streamlining. Level 5 refers to all remaining cities and municipalities. 

The government has identified 480 cities and municipalities in the BPLS program (Table 2-1). 

Originally, government support through capacity building and coaching assistance was limited to 

480 LGUs, mostly from Levels 1-3 and some in Level 4, which were expected to be fully 

compliant with the BPLs standards by 2014. The program, however, has been fast tracked in 

2011, with 2012 targeted as the program completion year.


Figure 2-2 

BPLS Streamlining Program Coverage by LGU Level 

Level 1 

NCR LGUs 

(16 Cities, 1 

Municipality) 

Proposed Coverage of BPLS Streamlining 

Level 2 

High density of 

businesses 

Sector Priorities in 

BPO-IT, Tourism, 

Agribusiness & 

Mining 

LGUs included in 

the MCC 

commitments 

Targeted Assistance 

By Government 

Level 3 

Remaining LGUs 

from NCC List of 

120 Sparkplug 

LGUs not covered 

in Levels 1 & 2 

Level 4 

LGUs with existing 

ODA projects 

Table 2-1 

Regional Allocation of Cities and Municipalities in the BPLS Program 

By Enrollment 

Level 5 

All other LGUs 

Region 2010 2011 2012 2013 2014 Total 

NCR 1 1 

CAR 3 3 

1 8 6 14 

2 3 2 2 2 9 

3 23 26 29 29 23 130 

4A 16 25 31 35 35 142 

4B 5 4 5 14 

5 6 2 1 2 11 

6 6 3 3 2 4 18 

7 9 17 2 1 29 

8 4 4 9 6 8 31 

9 4 4 8 

10 4 4 4 12 

11 7 1 5 5 2 20 

12 7 4 12 9 32 

13 2 3 1 6 

Total 108 103 98 90 81 480


Government Assistance to LGUs 

The government identified the following assistance packages to LGUs (outside of NCR) that 

would like to streamline their BPLS: 

• Self-Assessment Workshop. DTI and DILG will join forces to assist LGUs in conducting 

a workshop to document and assess their current system in relation to standards and to 

propose reforms for presentation to the mayor. Participation will be by enrollment and 

expenses will be borne by the LGUs. Appendix B. Assessing Business Processes details 

steps for assessing the BPLS process of LGUs and preparing a reform action program. 

• Technical Assistance Services. The DTI and DILG will organize “coaching” teams from 

the government, BPLOs, and the private sector to assist LGUs in implementing their 

BPLS streamlining plans. 

• Automation (Computer-Aided) BPLS. LGUs interested in automating their BPLS will be 

assisted in acquiring the e-BPLS software and related training. The National Computer 

Center (NCC2) has drafted guidelines on BPLS computerization that will soon be 

disseminated to interested LGUs. It is planning to redevelop e-BPLS and create a system 

of accreditation for private software developers who will be producing BPLS solutions 

for LGUs. 

2.4 INSTITUTIONAL STRUCTURES AND MECHANISMS 

As streamlining experiences accumulate, structures that ensure proper and prompt 

implementation of reforms will be needed. At the same time, support for reforms from different 

stakeholders is critical to the success of the project. This is articulated in Component 0 of the 

government program on BPLS. 

National Structures and Mechanisms 

Two groups promote reforms in business registration. The BPLS Oversight Committee (BOC), 

which is co-chaired by DTI and DILG, was organized under the Philippine Development Forum. 

The Working Group on Transaction Costs and Flows (TCF) is under the National 

Competitiveness Council (NCC1). Figure 2-3 shows the links between these committees. 

BPLS Oversight Committee 

The BOC is directly responsible for managing BPLS reforms. It was organized in June 2010 and 

officially established on August 6, 2011 through JMC 2010. As stated in the JDAO, the BOC is 

to (1) oversee implementation of nationwide scaling up of BPLS reform, particularly service 

standards; (2) mobilize resources for implementation of various components of BPLS reforms; 

(3) coordinate various initiatives of government, the private sector and the development 

community on BPLS reforms; (4) assist national government agencies, DTI, SEC, SSS, Phil 

Health, Bureau of Fire Protection in streamlining procedures; (5) assist government in building 

the capacity of governments to implement the BPLS reforms; and (6) ensure that BPLS reforms 

are aligned with other reforms that enhance the competitiveness of the country and LGUs.


Figure 2-3 

Institutional Support for BPLS Reforms 

Philippine Development Forum 

Working Group on 

Growth & Investment 

Climate 

Conveners: DTI & IFC 

Conveners: DOF & WB 

Sub Working Group in Local 

Investment Reforms 

Conveners: DTI, DILG & 

USAID 

BPLS Oversight Committee 

Co-Chairs: DTI & DILG 

BPLS Coordinator Committee 

Co-Chairs: DTI & DILG 

Regional Directors 

Working Group on 

Decentralization & 

Local Government 

Conveners: DILG & WB 

National Competitiveness Council 

Chairs: DTI Secretary & Private Sector 

Representative 

Education & Human 

Resources Anti-Corruption 

Performance 

Governance System 

I.T. Governance 

System 

Infrastructure for 

Competitiveness Judicial System 

Transaction Costs & 

Flows 

Chairs: DTI 

Competitive 

Agriculture 

Transparency in 

Budget Delivery Power and Energy 

Following the PDF structure, the BOC includes development partners. Composed of the LGU 

Leagues (LCP and LMP), NCC1, NCC2, and USAID, GIZ, IFC and the Spanish Agency for 

International Development Cooperation (AECID), the BOC plans and implements BPLS-related 

activities. In 2010, it organized a multidonor project that trained DTI and DILG coaches who 

have been rolling-out reforms to the targeted LGUs. The BOC has been proposed to be subsumed 

as a committee under the Sub-Working Group on Local Investment Reforms, a new group under 

the working groups on decentralization and local government and growth and investments. 

BOC’s 2011 work plan includes (1) stepping up the LGUs that have streamlined to the 

automation level; (2) ensuring the completion of process re-engineering of LGUs now making 

BPLS reforms; (3) establishing an effective monitoring and evaluation system; (4) building a 

BPLS advocacy and marketing program; and (5) establishing a BPLS certification system. 

National Competitiveness Council 

Chaired by the DTI Secretary and co-chaired by a private sector representative, NCC1 supports 

the BOC through its Transaction Costs and Flows (TCF) working group, also co-chaired by a DTI 

undersecretary and a private sector representative. NCC1 was reconstituted through Executive 

Order 44 issued on June 3, 2011. It is the primary collection point of investor issues that need to 

be addressed to improve the country's competitiveness in industry, services, and agriculture; 

advises the President on policy matters affecting business competitiveness; and provides input to 

the Philippine Development Plan, the Philippine Investments Priority Plan (PIPP), and the 

Philippine Exports Priority Plan (PEPP). Its members include the Secretaries of Finance, Energy


and Tourism, and Education, the Director-General of National Economic Development Authority 

(NEDA), and five private sector representatives. 

Even before its recent reorganization, NCC1 was active in BPLS reforms, focusing on monitoring 

and influencing the NGAs to streamline BPLS processes. For instance, the TCF focused on the 

use of a common database and application form for the social security agencies. It has also 

examined the permitting processes of agencies giving special permits to business enterprises (e.g., 

environment clearance certificate of the Department of Environment and Natural Resources. 

In 2011, NCC1 plans to support BOC initiatives by (1) showcasing successful reformers in road 

shows in seven regions; (2) designing a BPLS customer satisfaction survey to be conducted in 

early 2012 to validate LGUs’ reforms; and (3) providing training for LGU front liners on service 

excellence and values reorientation. 

Local Institutions and Mechanisms 

The BPLS Coordination Committee (BCC) is the local counterpart of the BOC mandated in the 

JDAO of August 6, 2010. The BCC is co-chaired by the regional directors of the DILG and DTI 

and consists of local chambers, the LGUs, and academics. Following the JDAO, the BCC’s 

functions include 

• Providing direction in implementing BPLS reforms at the local level. 

• Organizing training for priority LGUs that will be streamlining the BPLS. 

• Organizing a pool of BPLS trainers in the region (from the BPLOs of LGUs, the 

academic community, and the local chamber) that can be tapped to coach LGUs in 

streamlining registration processes. 

• Monitoring LGU compliance with BPLS standards. 

• Soliciting support from the private sector. 

• Liaising with the National BOC on implementation of BPLS reforms. 

The BCCs have been responsible for organizing the roll-out of BPLS standards to targeted LGUs. 

Action plans for the 2011 roll-out were in fact prepared by the regional BCCs and submitted to 

DTI and DILG.

3. Past BPLS Reforms in the 

Philippines 

In the Philippines, the government has only recently been deeply engaged in business registration 

reform, but reform efforts can be traced back over the past 10 years. Those efforts offer valuable 

lessons in governance and development for the current BPLS program of DTI and DILG. The 

program can be considered a model of convergence and coordination among government 

agencies, and of the harmonization of official development assistance, following the principles of 

aid effectiveness (OECD 2005/2008). 

Business registration reform began through the uncoordinated and independent efforts of various 

entities. A good deal of BPLS reform was pursued through donor-supported projects focused on 

transparent and accountable governance, decentralization, local economic development, small 

enterprise promotion, and private sector participation. Some LGUs initiated and funded their own 

registration reform; others were prodded by the regional offices of government agencies. 

Reforms were made in Luzon, Visayas, and Mindanao without the benefit of service standards, 

which were not put in place until the formal launch of the nationwide BPLS streamlining program 

in August 2010. A chronological account of BPLS reforms is in Appendix C; various BPLS 

projects of the past ten years are summarized below. 

3.1 BPLS INITIATIVES BETWEEN 2001–2010 

There have been a number of significant programs to simplify business registration procedures 

since 2001. Most were conducted through development assistance projects and spanned the 

different island groupings of the country. These programs paved the way for the formulation of 

extensive scaling up of business registration reforms in 2010. 

BPLS Reforms in Central Luzon, 2001 

In 2001, the Central Luzon Investment Promotion Center Region 3 (CLIPC) and the provincial 

offices of DTI Region 3, DILG, and LGUs campaigned to simplify business licensing 5 in 

response to the state of the nation address of then-President Macapagal-Arroyo. On November 

23, 2001, BPLS reform was adopted as a flagship project of the Central Luzon Coordinating 

Council (CLICC). The Region 3 initiative was driven by provincial governors on the Central 

5 This discussion is based on a presentation by Judith Angeles (2009), Streamlining the Business Processes 

in the Issuance of Mayor’s permit in Central Luzon.


Luzon Growth Corridor Foundation Inc. (CLGCFI). On March 22, 2002, a memorandum of 

commitment on “implementation of the streamlined business processes of critical frontline 

services in Central Luzon’s W Growth Corridor” was signed and eight municipalities committed 

to streamlining the issuance of their mayor’s permit: Balanga City in Bataan; Sta. Maria & 

Meycauyan in Bulacan; San Jose & Cabanatuan cities Nueva Ecija; Angeles City in Pampanga; 

Tarlac City in Tarlac; and Olongapo City in Zambales. 

Memorandum Circular 117 of 2003 provided impetus for the region to accelerate streamlining. Its 

program enjoined LGUs to (1) establish internal monitoring systems and internal audits, (2) 

establish a BOSS, and (3) automate their BPLS and connect to the Philippine Business Registry 

(PBR). 6 By 2007, all 130 LGUs in Region 3 had completed streamlining reforms – three years 

before performance standards were officially promulgated in August 2010 (Table 3-1). Two cities 

even had their business registration process certified under ISO 9000. 

Table 3-1 

BPLS Implementation in Central Luzon 

Province 

No. of Cities/ 

Municipalities 

Cities/Municipalities Implementing Streamlined BPLS 

2002 2003 2004 2005 2006 2007-2009 

Aurora 8 1 2 2 8 8 

Bataan 12 1 1 4 12 12 12 

Bulacan 24 2 2 3 7 23 24 

N. Ecija 32 2 2 3 7 32 32 

Pampanga 22 1 2 3 14 22 22 

Tarlac 18 1 1 2 2 17 18 

Zambales 14 1 2 3 14 14 14 

TOTAL 130 8 11 20 58 127 130 

SOURCE: DTI, Region III. 2009 Presentation. 

The Region 3 initiative is a model of political resolve to make reforms and the persistence of a 

government agency in following the instructions of the President. Leading the project, DTI 

Region 3 had provincial governors champion reform, secured financial support through the 

foundation organized by the governors, coordinated technical support provided to LGUs from 

NGAs and the development community, and instituted an award system that encouraged LGUs to 

compete with each other in improving how mayor’s permits were issued. 

6 The PBR is a business registry database managed by DTI under Executive Order 587 issued on December 

8, 2006. It has evolved to streamline registration procedures through a web-based registry that links the 

databases of various agencies (i.e., the Securities and Exchange Commission, the Cooperative 

Development Authority, the Bureau of Internal Revenue, the Social Security System, the Home 

Development Mutual Fund, the Philippine Health Insurance Corporation, e-ready LGUs, and e-ready 

licensing agencies). While a number of LGUs have been linked to PBR since 2009, the system is being 

enhanced and tested.

P AST BPLS R EFORMS IN THE P HILIPPINES 23 

BPLS Reforms in Mindanao, 2003 

One of USAID’s early initiatives to promote business registration reform in Mindanao was the 

Transparent Accountable Governance (TAG) project. TAG was designed as an anticorruption and 

good governance project that adopted “increasing transparency and accountability in government 

transactions” as a theme (Asia Foundation 2008). The Business Permit and Licensing Study, a 

five-year activity under the project, initially covered 7 cities but expanded to 16. 7 Assistance 

focused on procedural reforms that covered steps, processing time, forms, clearances, permitting 

fees, signatories, personnel, and corruption. The end-of-project report covered results, city case 

studies, and recommendations. Sustainability in reform is always an ongoing concern with BPLS 

reform and TAG was not directly an investment climate improvement project. However, TAG 

had some success in streamlining the business permitting system in the target cities and some of 

the beneficiary cities won awards (e.g., Koronadal). 

BPLS Reforms in the Visayas, 2004 

The GIZ spearheaded BPLS reforms in the Visayas through two projects: the Private Sector 

Participation (PSP) Project and the Decentralization Project (DP). While PSP helped improve the 

business and investment climate for micro, small, and medium enterprises, DP helped improve 

national and local governance. DP supported the harmonization and streamlining of processes in 

and between local governments and thus fostered local planning, financial management, interlocal 

cooperation, and capacity developments. 

The PSP project, with DTI, piloted BPLS reform in Bacolod (Region 6) and in Ormoc and 

Palompon (both in Region 8) in 2005. A third pilot region—Region 7—was selected in 2007. 

There, DP and PSP joined forces and selected the municipalities of Barili and Consolacion as 

pilots. The pilots were later replicated in various municipalities in Regions 6, 7 and 8 (see Table 

3-2). 

As in Central Luzon, GIZ assistance covered a good number of municipalities. In the absence of 

standards, GIZ’s approach enabled municipalities to determine areas for reform, but basically 

covered number of steps, amount of processing time, documentation requirements, and 

signatures. Manuals, toolkits, and learning modules were produced under the two projects. The 

good documentation of project experiences and accomplishments contributed to the design of the 

government’s BPLS project. 

Reforms in the Visayas were concentrated in small and medium size municipalities (except for 

Iloilo, Cebu City) as compared to those in Mindanao and Luzon. Yet the reforms led LCEs to 

understand that they can raise revenue by improving service delivery, particularly business 

permitting and licensing. In some LGUs, such as Iloilo, GIZ assistance also covered the 

introduction of iTax, software with a module for tracking business fees, in addition to other LGU 

operations like real property taxes. 8 

7 The 16 cities were Cotabato, Dapitan, Marawi, Iligan, General Santos, IGaCoS, Surigao, Butuan, 

Dipolog, Koronadal, Malaybalay, Oroquieta, Ozamiz, Panabo, Tacurong and Zamboanga. 

8 GIZ later developed an iBPLS to complement its BPLS reform assistance in Mindanao.


Table 3-2 

BPLS Pilot Areas in the Visayas 

Region 6 Region 7 Region 8 

Pilots Bacolod Barili, Consolacion Ormoc, Palompon 

Replicators Iloilo 

Escalante 

Silay 

Sagay 

Cadiz 

Kabankalan 

Talisay 

San Carlos 

Bago 

Victorias 

Buenavista 

Dumangas 

Estancia 

Oton 

Pototan 

Kalibo 

Malay 

Roxas City 

San Jose 

Passi 

Cebu City 

Tanja 

Liloan 

Larena 

Danao 

Siquijor 

Talisay 

Minglanilla 

Naga 

Argao 

Dumaguete 

Bayawan 

Valencia 

Burauen 

Palo 

Isabel 

Naval 

Catbalogan City 

Borongan 

Calbayog 

BPLS Reforms in the National Capital Region, 2008 

Most early initiatives to simplify business permitting focused on municipalities and small cities. 

The first to involve highly urbanized cities was the IFC’s Regulatory Simplification Project 

(RSP), which focused on procedures for new business permits. Started in 2008, RSP extended 

technical assistance for reducing the time, cost, and procedures for starting a business to four 

cities in the NCR: Mandaluyong, Marikina, Manila, and Quezon City. Four principles 

characterized the project: adoption of one business application form; implementation of a onetime 

assessment and one-time payment, and creation of a joint inspectorate system. All four cities 

adopted the single registration form and one-time assessment and one-time payment schemes. As 

a result, the 14 steps in the standard business registration process were reduced to eight, and the 

processing time was reduced to one day. 

To complement the RSP, the IFC started the Standard Business Registration Process (SBRP) 

project with the League of Cities of the Philippines (LCP). The league was headed by then-Mayor 

Benhur Abalos, who was also chair of the Union of Local Authorities of the Philippines. A 

technical working group on business regulation (entry) reform was organized to advocate 

business regulation reform in the NCR. The project was conceived with the following outputs in 

mind: (1) legal and procedural review of local and national regulations, (2) standard business 

registration procedures, (3) issuance of department orders and local ordinances to implement 

standard procedures, (4) action and advocacy plans, and (5) compliance monitoring. Activities 

culminated in the signing of the Joint Memorandum Circular by DILG, DTI, SSS, and NCR 

mayors in February 2009 (see Legal Basis for BPLS Reforms). While the focus was on new


business applications, the recommendations were also considered in setting the BPLS standards 

in the JMC 2010. 

Streamlining of Business Renewal Processes, 2009 

In 2009, the BPLS Streamlining Project was implemented nationwide as a joint undertaking of 

the PDF working groups on growth and investment climate and the working group on 

decentralization and local government, with DTI and DILG as conveners, respectively. Both 

working groups wanted to put into place practical measures to enhance national and local 

competitiveness. The focus was on reforming the business renewal processes of key cities and 

municipalities in highly urbanized areas where the bulk of businesses are located. In contrast to 

earlier BPLS initiatives that had focused on poor municipalities, this program recognized that 

reforms would have the greatest impact in areas with a high concentration of firms. The program 

also marked the first attempt to develop service standards for business renewals, which account 

for the majority of annual business applications. 9 On the basis of process recommendations in 

earlier studies of BPLS, benchmarks were set for number of steps, processing time, and the use of 

a single, unified form. 

Twenty-eight LGUs from six regions (3, 4A, 7, 10, 11, 12) were chosen to participate in four 

workshops in November-December 2009 to enable them to streamline their business renewal 

processes in time for the January 2010 renewal period. This training was the first multidonor 

project on BPLS (i.e., involving GIZ, IFC, USAID’s LINC-EG). Despite the short notice, a third 

of the LGUs reportedly implemented at least one of the four standards for processing business 

renewals. 

Development of eBPLS, 2006 

Separate from the projects of development partners, the National Computer Center (NCC2) with 

the Development Academy of the Philippines, developed eBPLS software as part of an 

e-governance project that included the eRPTS. The software is free to municipalities with training 

provided by NCC staff. NCC2 targeted municipalities under the program because cities were seen 

as having the financial capacity to automate their operations. The eLGU BPLS covers the full 

business processing cycle (i.e., application, assessment, approval, payment and release). Twentyone 

LGUs are fully implementing the system. 

In 2006, NCC2 joined with the Mayor’s Development Center (MDC)—a training arm of the 

League of Municipalities of the Philippines (LMP) –and the eGov project of the Canadian 

International Development Agency (CIDA) to form the eGov4MD project. The purpose of the 

project was to improve local governance and business climates by making public service delivery 

more efficient and revenue generation more effective by providing training in information and 

communication technology. It sought to build the capacity of e-ready municipalities for egovernance 

using the NCC’s eLGU system, known as the Business Permit and Licensing, Real 

Property Tax and Treasury Operations Management System. Outputs included a package of user 

9 In the Philippines, business renewals are scheduled in the first 20 days of January every year (Section 167 

of the Local Government Code of 1991).


guides, technical training, and technical assistance and advisory services through a Career 

Executive Service Board (CESO) of volunteer advisers. 

Several organizations shared the cost of the project. The NCC developed the software, provided 

free of charge to qualified municipalities. The CESO provided Canadian volunteer advisers using 

CIDA funding, and the LMP-MDC/eGov4MD program extended technical support. The LGUs 

covered staff training fees, technical support fees, and if needed, hardware, accommodations, and 

transport for the CESO adviser and eGov4MD technical staff for one to two weeks. LGU training 

expenses ranged from 150,000 to 180,000 pesos. 

The project initially covered selected provinces in Luzon, Visayas, and Mindanao. 10 In 2009, 

LMP received Presidential citations on issuance of mayor’s permits in Talavera and Aliaga, and 

Nueva Ecija. In October 2009, the PCCI recognized Carmona as the most business-friendly 

municipality for its streamlined business permit licensing and renewal services, or its business 

one stop shop, made possible through computerization. Carmona was later presented with an 

eGov4MD award in September 2010. By 2010, eBPLS had been set up in 60 municipalities, 

resulting in a 5 percent to 6 percent increase in business revenue, faster and more transparent 

processing, and increased customer satisfaction. 

3.2 BPLS INITIATIVES SINCE 2010 

Momentum for BPLS reforms accelerated during the administration of President Benigno Aquino 

III. New secretaries of the DTI and DILG personally championed scaling up the BPLS program, 

which was launched barely a month after the President’s oath taking in July 2010. This renewed 

interest triggered activities that gave the program a new perspective: clear policy directives set 

service standards for business registration, identified targeted LGUs, and set up an institutional 

mechanism to oversee the program. Some of the BPLS-related activities undertaken during the 

Aquino administration are described below. 

Training of BPLS Coaches 

With a goal of having 108 LGUs reform their BPLS systems, DTI and DILG agreed to conduct 

massive training of staff expected to roll out the reforms. Coordinated by the Local Government 

Academy, the training of trainers project was funded by USAID, GIZ, AECID, and IFC. A total 

of 453 personnel from DTI, DILG, business permit and licensing offices (BPLOs), private 

businesses, and academia participated in the workshops, which were conducted in the second 

semester of 2010. This training was the first to disseminate BPLS standards and related policy 

directives. To prepare for the workshops, a team of consultants and facilitators produced 

operations manuals and training modules. 

10 Luzon: Region 1- Pangasinan, Ilocos Sur and Ilocos Norte; Region 2- Cagayan, Isabela, Nueva Vizcaya, 

Quirino; Region 3-Aurora, Bulacan, Pampanga, Bataan, Zambales, Tarlac, Nueva Ecija; Region 4-A- 

Cavite, Quezon; Visayas-Northern Samar & Palawan; and Mindanao- Zamboanga Sibugay, Surigao del 

Norte, Davao del Sur, Davao del Norte, Davao Oriental, Agusan del Sur, Bukidnon, Compostela Valley.


Expanded BPLS Implementation 

BPLS standards were rolled out in the third and fourth quarters of 2010. Table shows the 

progress of streamlining as of July 31, 2011; the overall accomplishment rate is 38 percent. NCR 

and Regions 5 and 13 have completed reforming the targeted LGUs. Regions 2, 3, 11 have 

completed 50 percent to 75 percent of their work and are expected to complete reforms by the end 

of 2011. 

The other regions, however, will need to step up activity to meet goals, especially Regions 1, 4A, 

8, 9, and 10 whose level of accomplishment was only 13 percent or less by the end of July 2011. 

Based on the meeting of the BOC on August 18, 2011, the DTI and DILG are targeting the 

completion of the 480 LGUs by the end of 2012. To support this accelerated schedule, both 

agencies have a budget to cover expenses for staff rolling out the reforms. 

Table 3-3 

Status of BPLS Streamlining in Targeted LGUs by Region, July 2011 

Region 

Targeted 

LGUs/ 

Region 

Percentage 

Complete 

(Targeted 

Region) 

Target 

NCR 1 100% 1 

Completed Ongoing 

Nontarget 

Target 

CAR 3 33% 1 2 

Not yet 

Started 

Nontarget 

Target 

Region 1 16 19% 3 2 5 8 

Region 2 7 57% 4 1 3 

Region 3 130 71% 92 38 

Region 4A 142 9% 13 10 

Region 4B 15 27% 4 1 10 1 

Region 5 9 100% 9 6 

Region 6 19 42% 8 3 1 

Region 7 29 45% 13 20 3 10 2 

Region 8 31 10% 3 10 2 1 

Region 9 8 13% 1 3 

Region 10 12 8% 1 8 2 

Region 11 20 75% 15 1 1 

Region 12 32 19% 6 1 1 

Region 13 6 100% 6 10 7 

Total 480 38% 180 41 89 30 13 

SOURCE: Local Government Academy (LGA), DILG, as of 31 July 2011. 

BPLS Reforms in Key Mindanao Cities, 2010 

Given the new service standards set by the government, USAID’s LINC-EG supported BPLS 

reforms in four Mindanao cities, complementing the work of DTI and DILG. The cities—Davao, 

General Santos, Cagayan de Oro and Butuan—were chosen to serve as models to surrounding 

LGUs. Butuan and Cagayan de Oro, where LINC-EG assistance has been completed, have


reported impressive accomplishments (Table 3-4). The number of business registrations increased 

after the reforms by 9 percent to 6,996 in Butuan and by 10 percent to 15,405 in Cagayan de Oro. 

This improvement translated into a 14 percent in increase in fee-related revenue (P66 million) in 

Butuan, and a 10 percent increase (P214.8 million) in Cagayan de Oro City. 

Table 3-4 

Summary of BPLS Accomplishments in Butuan and Cagayan de Oro 

Metrics/Cities 

Steps Processing Time (days) 

2010 2011 % Changes 2010 2011 % Change 

P ROCESSING N EW P ERMITS 

Butuan 10 5 (50) 152 19 (88) 

Cagayan de Oro 12 3 (75) 720 15 (98) 

P ROCESSING B USINESS R ENEWALS 

Butuan 6 5 (17) 80 min 19 min (76) 

Cagayan de Oro 7 3 (57) 520 min 15 min (97) 

New BPLS Studies 

The successful roll-out of BPLS reforms encouraged the government to extend the reform process 

to other registration processes and to think of measures to sustain the reform process. 

Accordingly, the following studies were started soon after the Aquino administration took over: 

• Study of Proposed Business Models for BPLS. In support of the BOC, the GIZ 

commissioned a study to develop a business model to advance BPLS reform. 

Recommended strategic steps include publicizing BPLS gains and successes; applying 

streamlining in all LGUS; accrediting trainers and coaches; computerizing BPLS as 

appropriate to LGU circumstances; incentivizing BPLS reform; strengthening monitoring 

and evaluation; institutionalizing a feedback mechanism from the business sector; and 

ensuring sustainability. 

• eBPLS Planning and Implementation Guide. The National Computer Center, with 

funding from USAID’s LINC-EG, is preparing guidelines to aid LGUs in managing 

automation. The Center, DTI, and DILG are expected to disseminate the guidelines to 

LGUs through forums and information materials. 

• eBPLS Baseline Design Guide. The BPLS baseline design developed by the National 

Computer Center with funding from USAID’s LINC-EG will facilitate the formulation of 

a software package compliant with service standards set by LGU and private sector 

developers. 

• BPLS Reform Program Guide. Prepared with funding from USAID’s LINC-EG, this 

guide will document the BPLS program to aid the government in devising reform 

advocacy programs. 

• BPLS Reforms Communication Plan. This plan will help the Local Government Academy 

prepare communication materials and plan advocacy programs for the regional offices of 

DTI and DILG. The goal is to encourage LGUs to participate in the BPLS program.


3.3 LESSONS LEARNED 

Over the past ten years the “knowhow” or technology of BPLS reform has been defined and 

crystallized in the course of various reform initiatives. Many tools are now available for 

implementing, monitoring, and evaluating reforms. A variety of approaches have produced 

positive results. Several useful lessons learned in the experience are presented below. 

Identifying Reforms Champions 

The success of the BPLS program can be attributed partly to the leadership exerted by DTI and 

DILG at the national level since 2009 and by LCEs at the local level. DTI and DILG harmonized 

BPLS initiatives and organized them into a coherent program that included standards for business 

registration processes and mechanisms for sustaining the program. Each agency had clearly 

delineated responsibilities. DTI engaged the private sector, such as local business groups, while 

DILG engaged LCEs, such as the LGU leagues. Together, their local offices implemented the 

program based on the functional delineation in the JDAO. 

Equally important was the support of the LCEs, who needed to be convinced to contribute 

manpower and financial resources to the program. The LCEs facilitated the support of the local 

council and other public stakeholders in the LGU (i.e., the BPLO, the Office of the Building 

Official, the Health and Sanitation Office, the Planning and Development Office, among others) 

and the offices of the national government agencies (i.e., the Bureau of Fire Protection). 

LCEs were convinced to support the program through one-on-one meetings, multimedia, and 

advocacy events. In sum, generating interest among LCEs and other stakeholders requires a 

deliberate information, education, and communication (IEC) campaign. IEC in the BPLS process 

involves informing potential and existing customers about the requirements, procedures, and 

service delivery levels involved in the business permit and renewal process. 

Harmonizing Assistance from the Development Community 

In addition to the home-grown projects of LGUs with DTI and DILG were the reform projects of 

development partners. These projects played a catalytic role and helped achieve consensus on the 

direction of BPLS reforms. Improvements in business registration processes attributable to donor 

assistance were adopted by the government in designing the current BPLS program. Donors’ 

technical and financial assistance jumpstarted the streamlining of business processes in LGUs, 

especially those with capacity and resource constraints. At the national level, the BPLS program 

was piloted with the funding of several donors and then later through the national budget. The 

project aligned government priorities with development assistance and harmonized donor 

assistance to prevent the duplication and competition typical of other official development 

assistance programs. Table 3-5 summarizes BPLS assistance from development partners.


Table 3-5 

Summary of Official Development Assistance to BPLS Reforms 

Development 

Partner 

AECID (Support for Local 

Reform Project) 

CIDA (Local Government 

Support Program for Local 

Economic Development) 

GTZ/GIZ (Decentralization 

Project & Private Sector 

Participation Project) 

IFC (Regulatory 

Simplification Project & 

Simplified Business 

Registration Process) 

USAID (Local 

Implementation for National 

Competitiveness for 

Economic Growth) 

Capacity Building 

Activities 

Training of Trainers (TOT) in 

Region 5 including hiring of 

training team (2010) 

Training of selected LGUs in 

Region 5 and CARAGA 

(2010) 

Piloting in Visayas LGUs 

(2006-2007) 

Workshops for DTI and 

DILG on streamlining of 

processes for business 

renewals in Regions 3 and 4A 

and the Visayas (2009) 

BPLS M&E of 12 pilot LGUs 

(2010) 

TOT in Luzon, Visayas, and 

CARAGA 

BPLS streamlining of Quezon 

City, Marikina, Mandaluyong 

and Manila 

TOT for NCR, Regions 3 and 

4A (2010) 

Workshops for DTI and 

DILG on the streamlining of 

processes for business 

renewals in the Mindanao 

regions (2009) 

TOT for Mindanao regions 

BPLS streamlining for 

Butuan, Cagayan de Oro, 

General Santos and Davao 

(ongoing for the last two) 

Form of Assistance 

Knowledge 

Products Others 

BPLS training modules for 

the TOT 

BPLS Manual 

Training of Local 

Government Academy for the 

maintenance of the BPLS 

Help Desk 

Streamlining Business 

Registration in LGUs: Good 

Practices (2006) 

Simplifying Business Permits 

and Licensing Process (Red 

Book) (2008) 

Towards ONE Business 

Permit and Licensing System 

(2008) 

BPLS Inspectorate Team 

Operations Manual: A Guide 

for Local Government Units 

(2009) 

Streamlining BPLS in LGUs 

(Learning Modules & 

Training Manual) (2010) 

Training Modules of TOT 

Toolkit on Regulatory 

Simplification 

Policy Notes on Inspection 

Study on Setting up of 

Business friendly Local 

Inspection Study (with 

guidelines for LGUs) – 

Guidelines on BPLS 

Computerization 

Systems Flow and Base 

Specifications for BPLS 

BPLS Policy Note 

BPLS Communication Plan 

Hiring of software developer 

to review e-BPLS 

Study on the Proposed 

Business Model for BPLS 

(2011) 

Hiring of BPLS Coordinator 

and Training Teams for 

BPLS TOT (2010) 

Developing Institutional Capacities to Implement BPLS Reform 

In rolling-out reforms to 480 LGUs, the capacity of LGUs to undertake reform needed to be 

assured. It was too costly to depend on consultants so in 2010 DILG and DTI designed a training 

the trainers program—a difficult task because neither agency is a BPLS practitioner. Still, an 

institutional mechanism was established to ensure that LGUs can ask for technical assistance as 

they go through the reform process. An online help desk ensures that DILG and DTI “coaches’ 

have feedback on problems in rolling out reforms.


Reform-minded local governments also do not need to reinvent the wheel: it is sufficient to start 

with reforms implemented successfully in other cities. Many LGUs have practices worth 

emulating. In fact, the DBS 2011 report cites some good practices of Philippine LGUs. These 

include the one-stop shop in Manila, established through the standard business registration and 

permit processes; the one-time assessment of fees introduced in Davao City and Valenzuela; and 

Pasay’s waiver of separate applications for zoning clearance and fire and mechanical permits 

when the building in which a new business plans to operate has such permits already. 

It is now possible to draw up a menu of model practices for LGU wanting to make BPLS reforms 

but without full technical capacity just yet. Such a menu can help them decide which sites to visit 

as part of their pre-reform study program. 

Engaging Stakeholders in Reform 

BPLS reform involves both duty bearers and claim holders. The latter, however, are often left out 

of reform processes. Claim holders are citizens who directly benefit from better permitting 

services (e.g., businesses) as well as citizens at large, often represented by civil society groups 

that seek transparent and accountable governance. Claim holders’ early engagement in BPLS 

reform sets a foundation for reform ownership and sustainability. 

Early BPLS projects recommended the participation of stakeholders, including civil society 

groups in addition to the business sector. 11 Multisector alliances are needed to advocate for BPLS 

reforms. Civil society groups and the business community can act as watchdogs to ensure that the 

reforms comply with service standards and respond to the needs of the private sector. Publicprivate 

partnerships can accelerate and sustain BPLS reform. 

Setting up Institutional Structures and Mechanisms 

Reform requires appropriately mandated institutions. The Philippines has a National 

Competitiveness Council, but its mandate is advocacy not implementation. 12 The BPLS 

experience brought to light the lack of institutions positioned and empowered to oversee reform 

on a nationwide scale. The gap was filled when the DTI and DILG were selected to lead in their 

capacity as members of the Philippine Development Forum, particularly the working group on 

growth and investment climate. The WG-GIC chose BPLS improvement as a way to enhance 

growth and the investment climate, effectively putting DTI and DILG in charge. A BPLS 

Oversight Committee (BOC), composed of these two key players plus donor representatives, was 

then formalized to orchestrate policy actions and programmatic interventions nationwide. 

Similarly, the BPLS Coordination Committee (BCC) was established at the local level to perform 

the BOC national oversight and coordination functions on the ground. The BOC was to move for 

wide scale capacity development of implementing partners in BPLS streamlining and for 

mobilization of resources and harmonization of external aid to support BPLS reform. 

11 Refer to the TAG project recommendations. 

12 BPLS-related institutional mechanisms are described in Understanding BPLS Reforms.


Establishing a Monitoring & Evaluation System 

After piloting reforms of business renewal processes in 2009, DTI and DILG regional offices 

followed up by monitoring reform implementation at the pilot LGUs. This consisted of 

monitoring compliance with standards and action plans formulated by LGUs. This simple 

monitoring kept DTI and DILG aware of the success of the pilot and led to a scaling up of the 

program to cover 480 LGUs. 

Given the program’s present scale, DTI and DILG need to advance M&E. The LGA, as 

coordinator of the BPLS program, did a validation exercise to check the submissions of the BCC 

on the progress of BPLS implementation. A more elaborate monitoring system is being planned 

with IFC assistance. The system would establish and define success criteria and indicators based 

on performance standards now enforceable as a matter of national policy. In setting up the M&E 

system, three points should be considered: 

• The business community should be more involved through linkages and engagement of 

local chambers of commerce or equivalent to ensure institutionalized feedback to LGUs. 

• The monitoring framework should enable measurement of outcomes and impact in 

addition to generating information and evidence for future actions. 

• Cost-effective methods for gathering information should be identified; customer 

satisfaction surveys are useful but can be expensive. 

Using IT solutions for BPLS Reforms 

Computerization or the use of hardware and software in the BPL process, particularly for 

purposes of assessment, payment, and data banking, is an advance in reform. Many LGUs that 

adopted eBPLS and other software have reported impressive accomplishments. 

Some words of caution are on order. First, processes must be streamlined before they are 

automated. Second, the costs and benefits of computerization must be understood before any 

decision to automate. Small towns and municipalities must be circumspect in purchasing 

computer hardware, especially if the local business sector is underdeveloped. This is why the 

National Computer Center has prepared guidelines for LGUs wishing to automate their BPLS. 

BPLS reform entails change management involving policy, people, processes, programs, and 

institutions. But all change begins with the will to change. The key factor in successful BPLS 

reform is firm political resolve to introduce reforms. This is evident in the cities and 

municipalities that have reformed, such as San Fernando City in Pampanga, Carmona, Cavite and 

Sta. Rosa, Laguna. Political will must be matched with institutional knowledge and resources.

4. Accelerating BPLS Reforms 

Ten years of reform have generated a good store of knowledge, especially of service standards, 

good practices, lessons learned, expertise, and tools, to guide the adoption of reforms nationwide. 

But reform has spawned numerous challenges as well. To complete the critical mass of reform in 

480 LGUs between 2011-2012, certain implementation issues need to be resolved. 

4.1 CHALLENGES 

Slow Implementation 

As of July 31, 2011, only 38 percent (180) of the 480 targeted LGUs have complied with BPLS 

standards. Another 41 (not targeted) have completed reforms, but an even greater number of 

LCEs in the more progressive LGUs are indifferent to the central government’s call for reforms. 

Completing reform in the 480 LGUs will require more aggressive measures by the central 

government. The inaction of some LGUs signals that BPLS reforms are not considered important 

and/or that there is no awareness of the what, why and how of reform. Some LGUs are not even 

aware that reforms have occured and that there are concrete examples that can be replicated. 

Unresolved Policy Issues at National Level 

BPLS programs have focused on the procedural inefficiencies of local business permitting. But 

part of the problem lies with requirements imposed by national government agencies, most of 

which are prerequisites for filing an application at an LGU. These requirements include the 

following: 

1. Securing a Fire Safety Inspection Certificate (FSIC) before a Mayor’s permit is granted. 

The amended Fire Code of 2008 requires business registration applicants to secure an 

FSIC from the Bureau of Fire before the LGU can issue a Mayor’s permit. This 

requirement adds two or three steps to the BPLS standard of five steps, not to mention the 

processing time. The issue could be resolved by amending the implementing Fire Code’s 

rules and regulations. 

2. Getting clearance from the social security agencies like the SSS, Philhealth, and Pag- 

IBIG. The social security agencies impose requirements and leverage the permitting 

system to catch erring employers. In the JMC 2009, SSS agreed to work out a database 

system wherein enrollment of business establishments with SSS will automatically mean 

membership with Phil Health and Pag-IBIG. 

3. Implementing the Philippine Business Registry (PBR), a database system with the DTI 

that aims to facilitate business registration through a central repository of information


coming from various government agencies, such as the Department of Trade and 

Industry, Securities and Exchange Commission, Bureau of Internal Revenue, Social 

Security System, Philippine Health Insurance Corporation, Pagtutulungan sa 

Kinabukasan: Ikaw, Bangko, Industria at Gobyerno (Pag-IBIG), and LGUs. Linking up 

with the PBR will facilitate the processing of permits. 

4. Streamlining permitting requirements related to BPLS, (e.g., business name registration) 

from the DTI, SEC, or CDA and other sector permits (e.g., Bureau of Food and Drug 

Administration). There are efforts to automate and streamline the NGA processes. Indepth 

studies are needed to address the duplicative and extended processing time 

hampering the business sector. 

5. Streamlining inspection procedures for business enterprises, which has become part of 

the permitting process imposed by LGUs. While some of these procedures are mandated, 

others are local impositions that should be reviewed and streamlined. Inspection 

procedures are often duplicative, tedious, and disorganized and provide opportunities for 

corruption. DILG, with assistance from USAID’s LINC-EG, produced “Guidelines for a 

Business-Friendly Local Inspection System,” a manual that presents recommendations 

for improving the current inspection system associated with BPLS. 

Weak Support for Other BPLS Components 

The government program to scale up the streamlining of BPLS reforms focused on process reengineering, 

the first component of the program, that ensures compliance with the four standards 

for business registration processing (i.e., reduced steps, processing time, and signatures, and 

adoption of a unified application form). More definitive capacity building programs are needed 

for the other three components (i.e., computerization, institutionalization of reform, and better 

customer relations) as well as other support to BPLS reforms such as the setting up of business 

one-stop shops. 

In addition, many LGUs that have undertaken BPLS streamlining have expressed their intention 

to automate operations but need guidance on how to do so. The National Computer Center has 

prepared guidelines for BPLS computerization with an accompanying systems and base 

specification. 

Scaling Up BPLS Standards and Other Related Processes 

The BPLS reform program, including standards conceptualized in 2009-2010, can come closer 

still to the standards of ASEAN countries. Recently set standards should be reviewed and perhaps 

raised to the level of the more progressive ASEAN countries, especially in highly urbanized cities 

where the bulk of business enterprises reside in the Philippines. 

Weak Stakeholder Support for Local BPLS Reforms 

While business groups and LGU leagues at the national level have issued resolutions of support 

to the BPLS reform program, there is no concrete program to engage private business, especially 

local chambers of commerce, academia, and civil society in the program. Although some local 

chambers have sat in on BPLS technical working groups, there is no evidence that this practice is 

widespread in reform roll-out. Given the limited resources of the DTI and DILG, concentrating

A CCELERATING BPLS R EFORMS 35 

the abilities of academia, local research groups, and local chambers of commerce to assist LGUs 

with reforms will ensure sustainability of the programs. On the government side, not much is 

known about how much the BPLS Coordination Committees are doing in the targeted cities. 

4.2 NEXT STEPS 

While the government’s BPLS program has achieved successes, an immediate challenge is to 

accelerate adoption of BPLS by LCEs and to build on reform momentum by overcoming the 

challenges described above. Recommendations for moving forward are presented below. 

Accelerate the Scaling Up of BPLS Reforms 

Step up advocacy and marketing efforts for BPLS streamlining, and implement a concerted 

communication and advocacy program. Special attention should be given to the popularization of 

the service standards and the existence of the nationwide BPLS streamlining project among 

LCEs. This will show them that there is a “community of practice” to which they could belong. 

Furthermore, the following practical tasks should be undertaken: 

1. Assemble a corps of local champions by island groupings to be briefed and then 

mobilized to deliver talks in the LGUs in the region. Link these champions to the 

National Competitiveness Council, which will spearhead the campaign at the national and 

local level. DTI regional and provincial offices, in collaboration with the DILG, should 

identify local events where BPLS reform can be publicized in the next six months. 

Provide presentations on BPLS reform efforts in the meetings of municipal and city 

councils (Sanggunian), and distribute policy briefs to the LCEs and city/municipal 

council members. 

2. Organize the National Forum on Local Government around the theme of BPLS reform, 

showcasing successes and benefits. Success stories should highlight compliance with 

standards; and documents, data, and other evidence of enhanced LGU competitiveness 

should be cited. DILG regional offices, particularly the BPLS Coordination Committees, 

should organize roundtable discussions to replicate the national forum discussions. 

3. Integrate BPLS reforms into training courses and programs offered by the government, 

development partners, and the private sector. Examples are the courses on local economic 

development offered by the Local Government Support Program for Economic 

Development (LGSP-LED), the local and regional economic development (LRED) 

courses of GIZ, and the area business conferences of PCCI. Special events are 

encouraged, such as the celebration of the signing of the Local Government Code in 

October 2011, and the Annual Conference of National Competitiveness Council in 

December 2011. 

Incentivize BPLS Reforms 

A twin measure to the communication program is to “incentivize” BPLS reform so that it 

becomes a brand of good governance that LCEs want to have. BPLS reforms can be used as a 

qualifying criterion for the Performance Challenge Fund and a seal of good housekeeping. The 

incentive and award system should take into account the following:


• Level of Impact. Evidence of the impact of the reform on enterprise development, poverty 

reduction, economic growth, and competitiveness. 

• Sustainability. Successful projects/programs that show clear signs of gaining 

independence from external financial, technical, or organizational inputs by donors. 

• Participation and Partnership. Efforts to engage and forge partnerships with stakeholders 

in implementing and sustaining reforms. 

• Coordination and Harmonization. Successful reform programs should demonstrate 

efforts to coordinate with and complement the work of other development partners (e.g., 

donor agencies, governments, private sector agencies, civil society). 

• Local Government Performance Monitoring System. LGPMS, currently used as a 

monitoring tool in DILG’s Performance Challenge Fund, can be reviewed to explore how 

it can be used in advocating BPLS reform. 

Establish a National Standard for Inspection Policies 

Unresolved issues of national policy have delayed the implementation of BPLS. These issues 

pertain to fire safety inspection, the inspection processes required by the LGUs, and the 

organization of joint inspection teams. The DILG study on the setting up of business-friendly 

local inspection systems should be reviewed and recommendations presented to the appropriate 

committees, especially the BPLS Oversight Committee. 

Strengthen Local BPLS Institutional Mechanisms 

At the local level, the Joint Department Administrative (JDAO) of August 6, 2010 called for the 

organization of a local counterpart for the BPLS Oversight Committee, the BPLS Coordination 

Committee, but with a different organizational structure. The order stipulated that the regional 

directors of DILG and DTI co-chair the committee with membership from the local chambers, the 

LGUs, and academia. There is a need to track whether or not BPLS coordination committees are 

being set up and harnessed in instituting BPLS reform. 

Establish an Accreditation Scheme for Trainers 

The LGA is developing an accreditation scheme and is considering local business colleges and 

universities to become certified service providers; it is working out an accreditation scheme for 

future service providers. 

Enhance the Monitoring and Evaluation of BPLS reforms 

Tracking progress, measuring outcomes and impacts on national competitiveness, and detecting 

implementation issues and policy bottlenecks requires methodical monitoring. It is important to 

check whether or not BPL systems are meeting service standards. Success stories and good 

practices are best documented through a systematic monitoring system. The DILG and DTI must 

hold dialogues with the Philippine Chamber of Commerce and Industry (PCCI), the LGUs, and 

local chambers of commerce to identify what the business sector can do in monitoring and 

sustaining the reforms, particularly in collecting and channeling feedback to the LGUs.

A CCELERATING BPLS R EFORMS 37 

Monitoring and evaluation processes must check compliance with BPLS standards, and analyze 

constraints on the roll out process. A comparative study of unsuccessful LGUs, successful LGUs, 

and “backsliders” (i.e. those that initially rolled out but were unable to sustain their reform 

initiatives) could provide insight on the sustainability of BPLS streamlining.

References 

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Licensing System (BPLS) Model Joint Study. Makati City: Philippines. GTZ Private Sector 

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http://www.smedsep.ph/Download/BPLS_upscaling_mission.pdf 

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LINC-EG. BPLS Inspections Guide: A Guidebook for Local Governments on the Conduct of 

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Local Government Academy. 2011. Nationwide Streamlining of Business Permits and Licensing 

System (BPLS) in the Philippines. http://www.lga.gov.ph/bpls 

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http://www.competitive.org.ph/files/downloads/NCC_Press_Release_2_06-08-2011.pdf 

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23-2001/


Organisation for Economic Co-operation and Development (OECD). 2005/2008. Paris 

Declaration for Aid Effectiveness and the ACCRA Agenda for Action. Available at 

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Pilarca, Rita. 2008. Cutting Red Tape, Boosting Business: The NERBAC in Cebu. Manila, 

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Schwab. Geneva: World Economic Forum.

Appendix A. BPLS Unified Form

A - 2 A PPENDIX A

Appendix B. Assessing 

Business Processes 

The first step to computerizing BPLS is for the LGU to arrive at a clear understanding of the 

operating environment that will be computerized. The assessment of business processes is 

intended to help the LGU establish a baseline of current processes and the level of effort required 

to bring its processes into compliance with the JMC standards. 

There are many approaches to analyzing the current LGU system for business registration. In the 

BPLS manual prepared by the Local Government Academy, there are basically three steps 

involved in the analysis: (1) preparing the current BPLS process table, (2) conducting the BPLS 

process assessment, and (3) formulating an action plan for BPLS reforms. 

PREPARING THE BPLS PROCESS TABLE 

As an initial step in diagnosing the current BPLS in an LGU, the BPLS Streamlining Team 

should document answers to diagnostic questions in the Process Table (see Table B-1). 

ASSESSING THE BPLS PROCESS 

After the process table is complete, the current BPLS process is analyzed in comparison with 

established standards using Table B-2. The processes or areas of concerns (i.e. number of steps, 

number of documents required, number of signatories and processing time) are listed in Column 

I. For each area or concern the existing practice, the benchmark/standards, the gap between actual 

practices and established standards are listed in the following three columns. For each identified 

gap, the areas of reform and the strategies of putting those reforms in place have to be indicated. 

In documented best practices, the BPLS reform strategies are typically geared towards 

simplifying the processes to meet the standards (i.e., proper sequencing of the steps; setting-up 

business one-stop-shop as common venue of BPLS transactions; making the joint inspection team 

work; running information, education and communication campaigns; modernizing BPLS 

technology; building capacity of staff; and setting the legal framework in institutionalizing 

BPLS). These are gaps and areas for reform that are brought forward to the next stage of analysis.

B - 2 A PPENDIX B 

Table B-1 

BPLS Process Table Template and Diagnostic Questions for Analyzing the BPLS Process 

PROCESS TABLE 

Description Input Process Output 

Question Column 

1. What steps does the applicant need to take to apply for registration? 1 and 2 

2. What is the purpose (legal basis) of each step? 3 

3. What documents does the applicant need to submit for every step? 4, 5 

4. What is the cost for each requirement in the step? 6 

5. In what office does the applicant accomplish the step? Where is it located (incl. floor number)? 7, 8 

6. Excluding the applicant, how many persons from each office are involved in processing the step? 9 

7. What activities or tasks are the persons in the office doing in processing the step? 10 

8. How long (at the minimum, in minutes) does it take an applicant to walk to each office? How 

long does s/he have to wait in line for an LGU staff member from whom something is needed (e.g., 

line number)? How long did it take for the LGU to process the transaction? 

9. What does the applicant get (document or information) from the step? 12 

Table B-2 

BPLS Process Assessment Template 

Areas of 

Concerns 

Steps 

Documents 

Signatory 

Time 

Step 

No. 

Name 

of the 

Step 

Purpose No. of 

Forms 

(I) (II) (III) (IV) (V) 

Existing 

Practice 

Documents 

Required 

Benchmark/ 

Standards 

Cost Office Location No. of 

Signatories 

Identified 

Gaps 

Areas of 

Reforms 

Action Time to 

Process 

(1) 

1 

2 

3 

4 

5 

6 

7 

Total 

(2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 

Output 

11 

Reform 

Strategy

A SSESSING B USINESS P ROCESSES B - 3 

PREPARING THE ACTION PLAN 

The format for preparing the action plan is shown in Table B-3, which draws from the BPLS 

reform strategies formulated in the assessment table above. The first step in preparing the action 

plan is to lift the strategies from the assessment table. As this is done, each activity in the second 

column should be categorized according to its schedule of implementation (i.e., one month, one 

quarter, one semester). In addition, it is important to identify units/persons responsible for 

implementing the activities, as well as the amount and type of resources and support needed to 

pursue the strategy. 

Table B-3 

BPLS Reform Action Plan Template 

Reform 

Strategy 

List from 

previous 

exercise 

according to 

timetable. 

Immediate – 

within 1 month 

Short-term – 

1 quarter 

Medium-term - 

1 semester 

Long-term 

Specific 

Activity 

What steps 

to take? 

Expected 

Results 

What will 

result from 

the steps? 

Date of 

Implementation 

When are activities 

to be done? 

Responsible 

Unit/Person 

Who is on top? 

For whom 

activities are 

done? 

Resources 

Needed 

What are the 

inputs are 

needed? 

The business process assessment activity is complete when the LGU is able to provide the 

following items in detail: 

Support 

Needed 

What 

internal/external 

supports to do this? 

• The number of steps required by the LGU to process a new business permit and the 

number of process steps that need to be reduced to comply with the JMC. 

• The number of steps required by the LGU to process a business permit renewal and the 

number of process steps that need to be reduced to comply with the JMC. 

• The average number of days of processing from application to the issuance of a business 

permit, the requirements to comply with the 10-day limit prescribed by the JMC for new 

business applications and business renewals, respectively, and the documented reasons 

behind the current BPLO operations that promote/inhibit the ability of the BPLO to 

comply with the standards. 

To reduce the number of process steps in compliance to the BPLS-JMC, the LGU needs to review 

the following areas related to business registration: 

• The number of forms containing redundant data or data that is repeatedly entered (such as 

personal information) in every form.

B - 4 A PPENDIX B 

• The amount of non-related data reflected on the registration form that will require 

additional processing (recording, routing, or filing). 

• The means and efficiency of communication between the BPLO and other agencies and 

departments along with the effectiveness of Inspection Teams. 

• The ordinances that hamper efficient processing of business registration by affecting the 

number of signatures (and signatories) that need to be secured for the LCE to approve an 

application.

Appendix C. Milestones in the 

BPLS Reforms Program 

Year Milestones Outputs 

2011 • Ongoing studies for BPLS computerization 

• Studies on Joint Inspection commissioned by LINC-EG (August 

2011) 

• Study on Communication Program and Advocacy Strategy 

commissioned by LINC-EG (August 2011) 

• 3 rd meeting of the BPLS Oversight Committee at Fraser Place, 

Makati City on 30 March 2011 

• GIZ commissioned study to draw up a Business Model: Moving 

BPLS Forward 

• Preparation of Help Desk and Website 

2010 • Performance standards for business registration processes were 

publicly announced during the BPLS Upscaling Project on 6 

August 2010 by the Secretaries of DILG and DTI. 

• Signing of Memorandum of Agreement (MOA) between DTI and 

DILG on the organization of the Sub-working Group on Local 

Investment Reforms (LIR); 

• Joint Memorandum Circular (JMC) No. 1 between DTI and DILG 

setting the Guidelines in Implementing the Standards in Processing 

Business Permits and Licenses in All Cities and Municipalities 

• Joint DILG-DTI Administrative Order No. 1 on Guidelines in 

Implementing the Nationwide Upscaling of Reforms in Processing 

Business Permits and Licenses in All Cities and Municipalities. 

• August 2010 GTZ supported the public launch of the BPLS 

Upscaling project and the conduct of seven (7) Training of 

Trainers (TOT) workshops at CAR, Regions 1, 2, 6, 7, 8 and 

CARAGA. 

2009 • GTZ assisted LGUs in the Visayas to upscale the BPLS 

streamlining. 

Website; FAQ and the webbased 

helpline to assist in the 

coaching process for the roll 

out of BPLS reforms. (2010) 

Policy issuance: Standards 

officially adopted with JMC 01, 

Series 2010 

. 

• A manual of standards and a 

TOT manual (2009) – 

supported by AECID 

• Regional action plans for the 

roll out of the BPLS 

streamlining reforms.

C - 2 A PPENDIX C 

Year Milestones Outputs 

2008 • GTZ developed a good practice model and published Toolkit 

Simplifying Business Permit and Licensing Process of Local 

Government 

• GTZ, through the PSP/SMEDSEP and the DP, commissioned a 

study in September 2008 to develop, apply and replicate a model 

on how to streamline BPLS in the Visayas. This was to come up 

with a workable and sustainable mechanism to upscale the BPLS 

model for wider outreach, better impact, and improved 

sustainability. 

• Replication of the model in Region 7, covering 12 LGUs 

• IFC project on Regulatory Simplification started in four cities: 

Mandaluyong, Manila, Marikina and Quezon City 

• Discussion on the proposed single registration form for SSS, 

PhilHealth, and Pag-ibig; 13 LGUs in Cebu signed up for capacity 

building for the latter 

2007 • Streamlining BPLS in the municipalities of Barili and Consolacion 

as pilot areas in Region 7 with GTZ support 

• Replication of the streamlining BPLS model to other LGUs in 

Region 6 and Region 8 (GTZ) 

2006 • Continuation of the Pilot BPLS streamlining in the cities of Ormoc 

(Region 8), Bacolod (Region 6), and Palompon (Region 8). 

2005 • BPLS streamlining in the pilot cities of Ormoc (Region 8), 

Bacolod (Region 6), and Palompon (Region 8) 

2004 • GTZ-Private Sector Promotion program (PSP), in cooperation with 

DTI, starts streamlining BPLS in the pilot cities of Ormoc (Region 

8), Bacolod (Region 6), and Palompon (Region 8). The pilot was 

held from December 2004 to April 2006 in various municipalities. 

2003 • Malacanang Memorandum Order No. 117 (September 15) 

• Local authorities tasked with simplifying and rationalizing their 

civil application systems with support from the Secretary of DILG 

and DTI in facilitating the streamlining of procedures in the 

issuance of permits and licenses. 

2002 • Provincial governors of Region 3 sign covenant; 8 LGU cities 

initiate BPLS reforms 

• The Asia Foundation’s Project on Transparency and Accountable 

Governance in Mindanao 

2001 • Region 3 BPLS Initiative sponsored by the Central Luzon Growth 

Corridor Foundation Inc. 

• Simplifying Business Permit 

and Licensing Process of 

Local Governments: A 

Toolkit (2008) 

• Launched two manuals on 

BPLS toolkit and Towards 

One BPLS 

Streamlining Business 

Registration in LGUs (2006) 

Reforms initiated in Visayas 

Policy issuance 

Covenant 

Funding pool

BPLS Reform Program Guide - National Computer Center

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