Government Relations and Public Policy

Competitiveness of LGUs

By November 14, 2019 November 21st, 2019 No Comments

This post was originally published with The Manila Times on November 14, 2019.

A few weeks ago, I had the honor of judging the Philippine Chamber of Commerce and Industry’s (PCCI) search for the Most Business-Friendly LGU (local government unit). Toward the end of October, I also gave the speech on behalf of Anti-Red Tape Authority (ARTA) Director-General Belgica at the Department of Trade and Industry 7th Regional Competitiveness Summit.

At both events, one thing was made clear — local government competitiveness is on the rise. Provinces, cities and municipalities of all economic standings are taking significant steps in improving their own business landscapes, focusing on reforms and attractions for investments and business ventures. These LGUs are too many to mention, and here are three of my personal favorites:

Quezon City
The former nation’s capital continues its stellar performance, after having been awarded the most competitive Highly Urbanized City (HUC) for the fourth year and also won top spots in the HUC category for Most Efficient LGU and Infrastructure-Sufficient LGU.

Through ARTA, we work a lot with the Quezon City government, led by Mayor Joy Belmonte, in improving the overall ranking of the country in a number of indicators of the World Bank Doing Business Report, an annual publication that assesses an economy throughout the entire business life cycle. As the city with the most number of business registrations and renewals, Quezon City is the model LGU that the World Bank assesses.

Incidentally, the Philippines’ rank in the 2019 Doing Business report was abysmal — 124th place among 190 countries. Recently released, and in fact announced first by Trade Secretary Ramon Lopez in the 7th Regional Competitiveness Summit, were the results for next year’s report. Through some reforms, the country jumped a massive 29 spots, now ranked 95th out of the 190 countries.

Given this phenomenal performance combined with Belmonte’s strong support for reforms, we hope for an even better ranking in the following years.

The City of Valenzuela is taking great strides in improving its business permitting systems. It was awarded Most Improved LGU for HUCs, tied with Malabon City.

Just recently, Valenzuela launched the Paspas Permit system, taking the city government’s business and licensing functions online, where permits can be issued in as short as ten seconds.

Yes, you read that right — ten seconds — only a little longer than the time it took many of our readers to wonder if I made a typographical error there, and double-check what I indeed wrote.

How does it work, you may ask? Valenzuela, through Mayor Rex Gatchalian, does an absolute paradigm shift — applicants with complete requirements get their permits issued now, and any spot or site inspections occur on a post-audit means, thereby allowing the business to run as early as possible. This is a total reversal from the norm, where a permit would not be issued until all the previous steps were complied with, including occupancy and fire inspections.

The Paspas Permit system also goes the e-commerce and fintech route to efficiency. Online payment functions through Land Bank of the Philippines, Development Bank of the Philippines, credit or debit cards, and PayMaya. Once issued and paid for, the permits can also be delivered via Grab and Worldwide Express couriers.

Cauayan, Isabela
The judging of the PCCI’s Most Business-Friendly LGU was a full- day event. One after another, we assessed province after province and city after city, listening to their presentations, examining their submissions, and grading the performances.

It had already been a long day, when a lone presenter appeared in the form of Mayor Bernard Faustino Dy, who presented the city of Cauayan in Isabela. Putting it simply, we were amazed. The third class city has gone digital, with kiosks and apps for the benefit of their constituents. Currently, the app features key information of the LGU, such as ordinances and resolutions, a city calendar, general information, etc. It is soon expected that the app will also be the digital medium for submission and payment of business permits, taxes, and other necessary dealings with government.

I recall that fellow judge and colleague Bill Luz from across the table said that this is the perfect model that ARTA may promote for the rest of the country.

As a final word, one may ask how these LGUs are leading the way for greater governmental reforms? In my opinion, it all boils down to a single significant paradigm shift – treating the constituent as a client. In business, we value our clients and aim to provide the best products or services for them, or else we could lose their business and close shop. That has never been the mentality in government — until now. Let’s put true “service” in the concept of public service, combined with the right reforms and proper automation, and we could truly make inefficient government services a thing of the past.

The author is chief of staff at the Anti-Red Tape Authority and founder of Caucus Inc., a multi-industry, multi-disciplinary management consultancy firm. He graduated MBA (De La Salle University), Juris Doctor (Far Eastern University), and Masters of Law in International Commercial Law (Honours, University of Nottingham, United Kingdom). He also studied Mandarin Chinese Language and Culture in Fuzhou, China, was a Chevening-HSBC UK Government Scholar, a Confucius Institute Scholar, an alumnus of the US State Department’s International Visitor Leadership Program, and a Fellow of the Asia Global Institute-University of Hong Kong. The author may be emailed at

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