Guidelines on the Regulatory Reform for LGUS Pursuant to the Ease of doing Business and Efficient Government Service Delivery (EODB-EGSD) Act of 2018

December 10, 2019

DILG-ARTA JOINT MEMORANDUM CIRCULAR NO. 01 S. 2019

GUIDELINES ON THE REGULATORY REFORM FOR LGUs PURSUANT TO THE EASE OF DOING BUSINESS AND EFFICIENT GOVERNMENT SERVICE DELIVERY (EODB-EGSD) ACT OF 2018

1. Background

Pursuant to Section 5 of Republic Act No. 11032, otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, "All offices and agencies which provide government services are hereby mandated to regularly undertake cost compliance analysis, time and motion studies, undergo evaluation and improvement of their transaction systems and procedures and reengineer the same if deemed necessary to reduce bureaucratic red tape and processing time." HTcADC

In support to the implementation of the abovementioned Act and its specific provisions, and in view of the Philippine Development Plan 2017-2022 that ensures People-Centered, Clean, and Efficient Governance through seamless service delivery, the Department of the Interior and Local Government (DILG) issued Memorandum Circular No. 2018-214, series of 2018 entitled, "Reengineering of LGU Systems and Procedures on EODB-EGSD Act of 2018" that enjoins LGUs to initiate reengineering of its operations and procedures.

To assist LGUs in complying with the standards of the Act, the Department, with the support of the Anti-Red Tape Authority (ARTA), provides these guidelines pursuant to the ProjectRepeal Framework that was launched by the Competitiveness Bureau (CB) of the Department of Trade and Industry (DTI). These guidelines aim to improve the delivery of government services in the country by reviewing business and nonbusiness-related local ordinances, issuances, and resolutions then recommend the repeal, amendment, consolidation, or retention, as may be deemed necessary, to eliminate unnecessary burden to business and non-business related transactions.

2. Purpose

2.1 Generally, these guidelines aim to ensure good regulatory practices in the policy making process of local government units.

2.2 Specifically, these guidelines aim to enjoin LGUs to:

2.2.1 Review business and nonbusiness-related local ordinances, issuances, and resolutions, that affect the country's global competitiveness ranking and investment climate;

2.2.2 Improve business-friendliness and competitiveness by enhancing efficiency in issuing permits, licenses, clearances and other similar documents, and by lowering the cost of compliance for businesses and the transacting public to repeal or amend unnecessary, costly, burdensome, outdated, irrelevant and/or confusing rules;

2.2.3 Institutionalize an evidence-based repeal/amendment system ultimately towards a coherent and better regulations; and

2.2.4 Democratize regulatory reform process through public consultation and participation.

3. Legal Compliance

3.1 Republic Act No. 11032 dated 28 May 2018, "An Act Promoting Ease of Doing Business and Efficient Delivery of Government Services," amending for the purpose, Republic Act No. 9485 otherwise known as the "Anti-Red Tape Act of 2007."

3.1.1 Section 3. Coverage. — "This act shall apply to all government offices and agencies including local government units (LGUs), government-owned and controlled corporations and other government instrumentalities, whether located in the Philippines or abroad, that provide services covering business and non-business related transactions as defined in this Act."

3.1.2 Section 5. Reengineering of Systems and Procedures. — "All offices and agencies which provide government services are hereby mandated to regularly undertake cost compliance analysis, time and motion studies, undergo evaluation and improvement of their transaction systems and procedures and reengineer the same if deemed necessary to reduce bureaucratic red tape and processing time." aScITE

3.1.2.1 Paragraph 2 of Section 5, "The Anti-Red Tape Authority, created in this Act, shall coordinate with all government offices covered under Section 3 of this Act in the review of existing laws, executive issuances and local ordinances, and recommend the repeal of the same if deemed outdated, redundant, and adds undue regulatory burden to the transacting public."

3.2 DTI-ARTA-CSC Joint Memorandum Circular No. 2019-001, The Implementing Rules and Regulations of Republic Act No. 11032 otherwise known as the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018."

3.3 DILG Memorandum Circular 2019-177, "Guidelines in the Integration of the Issuance of Barangay Clearance in the Permitting Processes of Cities and Municipalities."

3.4 DILG-DOF Joint Memorandum Circular No. 2019-01, "Guidelines for the Review, Adjustment, Setting and/or Adoption of Reasonable Regulatory Fees and Charges of Local Government Units."

3.5 DILG Memorandum Circular (MC) No. 2018-214, "Reengineering of LGU Systems and Procedures in Compliance to EODB-EGSD Act of 2018."

3.6 DILG-DPWH-DICT-DTI Joint Memorandum Circular 2018-01, "Guidelines in Streamlining the Processes for the Issuance of Building Permits and Certificate of Occupancy."

3.7 DILG-DTI-DICT Joint Memorandum Circular No. 2016-01, "Revised Standards in Processing Business Permits and Licenses in All Cities and Municipalities."

3.8 Executive Order No. 292, "Instituting the Administrative Code of 1987."

Chapter 2, Section 3, Paragraph (1) of the same Order, Filing — "Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from that date shall not thereafter be the basis of any sanction against any party or persons."

3.9 Philippine Development Plan 2017-2022

Chapter 5: Ensuring People-Centered, Clean, and Efficient Governance, Subsector Outcome 2: Seamless service delivery achieved — "Adopt a whole-of-government approach in the delivery of key services, implement regulatory reforms, and improve productivity of the public sector."

4. Scope/Coverage

These guidelines cover all Provincial Governors, City and Municipal Mayors, Punong Barangays, Members of the Sangguniang Panlalawigan, Panlungsod, Bayan, and Barangay; DILG Regional, Provincial Directors, Filed Officers; and others concerned.

5. Definition of Terms

5.1 Amend: modify or alter an enacted law, ordinance, or issuance.

5.2 Business-related Transactions: a set of regulatory requirements that a business entity must comply with to engage, operate or continue to operate a business, such as but not limited to, collection or preparation of a number of documents, submission to national and local government authorities, approval of application submitted, and receipt of a formal certificate or certificates, permits, licenses which include primary and secondary, clearances and such similar authorization or documents which confer eligibility to operate, continue to operate, or to cease operation as a legitimate business (Source: R.A. 11032 or the Ease of Doing Business and Efficient Delivery of Government Services Act of 2018 and its Implementing Rules and Regulations).

5.3 Circulars: issuances prescribing policies, rules and regulations, and procedures promulgated pursuant to law, applicable to individuals and organizations outside the Government and designed to supplement provisions of the law or to provide means for carrying them out, including information relating thereto.

5.4 Consolidate: to integrate multiple similar laws or issuances into one legal document.

5.5 Implementing Rules and Regulations (IRR): rules and regulations drafted by the implementing agency to fill-in the gaps of its charter, subject to public consultation. At times, the charter clearly provides agencies and entities that the implementing agency should coordinate in creating its IRR. Notably, it cannot go beyond the powers and functions that were granted to the agency under its charter.

5.6 Issuances: rules or guidelines issued by the LGUs to implement a law or to lay regulations for the public, in accordance with the law (e.g., Executive Orders, Department Orders, Administrative Orders). For the purpose of this policy, internal administrative orders should not be included in the inventory list.

5.7 Non-business transactions: all other government transactions not falling under Section 4 (c) of RA 11032 and also no need of the Certificate of Fire Incidents for Fire Insurance under Rule I, Section 4 (o) of its Implementing Rules and Regulations.

5.8 Orders: issuances directed to particular offices, officials, or employees, concerning specific matters including assignments, detail and transfer of personnel, for observance or compliance by all concerned.

5.9 Ordinances: a legislative of a general and permanent character enacted by the local Sanggunian.

5.10 Philippine Business Regulation Information System (PBRIS): a web-based platform providing accessible information on business regulations issued by the Philippine government. It was established pursuant to Section 17 (k) of the Republic Act No. 11032 stating that the ARTA shall: "ensure the dissemination of and public access to information on regulatory management system and changes in laws and regulations relevant to the public by establishing the Philippine Business Regulations Information System (PBRIS)."

5.11 Regulations: legal instruments that give effect to a government policy intervention and includes licensing, imposing information obligation, compliance to standards or payment of any form fee, levy, charge or any other statutory and regulatory requirements necessary to carry out an activity. (Source: R.A. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018)

5.12 Regulatory Reform:

(a) refers to changes that improve regulatory quality that will enhance the performance, cost-effectiveness, or legal quality of regulations and related government formalities;

(b) may also mean revision of a single regulation, the scrapping and rebuilding of an entire regulatory regime and its institutions, or improvement of processes for making regulations and managing reform. (Source: Regulatory Reform: A Synthesis, OECD, Paris, 1997, page 6); and

(c) is to evaluate past and current laws, local ordinances and issuances and subsequently taking the necessary policy option for each.

5.13 Reform: to change into an improved form or condition.

5.14 Repeal: to revoke laws, local ordinances, or issuances.

5.15 Resolution: an expression of the sentiments: declaration of a will; opinion on position being rendered by the members of a deliberative body on certain issues and matters of public interests and having no permanent value but only temporary in character. (Source: Handbook in Local Legislation by Reverendo M. Dihan)

5.16 Retain: to keep laws, local ordinances, and issuances which are still effective in its current form.

5.17 Stakeholders: public or private, individuals or organizations, business community, employees, interest groups, and professional organisations who can affect and/or be affected/impacted by a particular regulation.

5.18 Stocktaking: inventory of all local ordinances, issuances, and resolutions made by the LGU.

6. Policy Content and Guidelines

The following are the general guidelines of the policy:

Regulatory Reform Framework. The Regulatory Reform Framework shall provide a set of procedures pursuant to the anti-red tape program implementation. It is composed of eight (8) elements, namely: (a) stakeholder engagement and participation; (b) creation of the Regulatory Reform Team; (c) stocktaking of regulations; (d) policy review and analysis; (e) policy option; (f) monitoring and evaluation; (g) digitization; and (h) capacity building.

6.1.1  Stakeholder engagement and participation. The public, as the primary stakeholder affected by government policies, should be consulted in the formulation and modification of regulations and other reforms on LGU policies.

6.1.1.1  LGUs may reach stakeholders through the following approaches:

a) Conduct of consultations/focus group discussions (FGD) with business groups, chambers, industry representatives, critical national government agencies, local government unit leagues, legal and technical experts, cooperatives, and civil society organizations.

b) Crowdsourcing through conduct of online surveys, segmented by business entity type and by industry. Options on mode of implementation are as follows:

i. In-house creation of online platform.

ii. Outsourcing of consultant to develop online platform.

iii. Conduct of real time assessment through face-to-face interview from randomly and purposively selected clientele base.

6.1.1.2  Stakeholder analysis 1 may be used as a tool to guide LGUs in mapping out interests, concerns, and issues of all relevant stakeholders. aDSIHc

6.1.2 The Regulatory Reform Team (RRT)

6.1.2.1  Creation and Designation of the Team. In order to facilitate the activities of the Regulatory Reform, the Local Chief Executives (LCEs) shall issue an executive order designating the heads and members of the Departments/Offices as part of the RRT. It is recommended that members of the RRT should come from the following Departments/Offices, but not limited to:

 

For Provinces
Head	Provincial Governor
Co-head	Provincial Vice Governor
Members	• Sangguniang Panlalawigan Members (at least 3 members of any related committee to be designated by the Sanggunian through a resolution) • Provincial Administrator (as representative of each Department and offices) • Provincial Planning and Development Coordinator • Provincial Legal Officer • Chief Records Office • Representative of Civil Society Organization (CSO)/NGO/Private or Business Sector
Secretariat	• Secretary to the Sanggunian (Head) • Provincial Governor Staff
For Cities/Municipalities
Head	City/Municipal Mayor
Co-head	City/Municipal Vice Mayor
Members	• Sangguniang Panlungsod (SP)/Sangguniang Bayan (SB) Members (at least 3 members of any related committee to be designated by the Sanggunian through a resolution) • C/M Administrator (as representative of each Department and offices) • C/M Planning and Development Coordinator (C/MPDC) • C/M Legal Officer • C/M Records Office • Representative of CSO/NGO/Private or Business Sector
Secretariat	• Secretary to the Sanggunian (Head) • C/M Mayor's Staff
For Barangay
Head	Punong Barangay
Members	• Sangguniang Barangay Members (at least 3 members of any related committee to be designated by the Sanggunian through a resolution) • Barangay Treasurer • Representative of CSO/NGO/Private or Business Sector
Secretariat	Barangay Secretary (Head)

*LGU has the option to increase the members of the RRT depends on their needs.

 

6.1.2.2  Functions of the Team. The team shall be responsible for the following:

a) Stocktake all existing local ordinances and issuances made by LGUs solely or jointly made with other LGUs or NGAs;

b) Conduct public dialogues with stakeholders such as NGAs, CSOs and the private sector, to identify cumbersome regulations and determine priority ordinances and issuances for review/assessment.

c) Review/assess prioritized local ordinances, issuances, and resolutions, if it is redundant, outdated, or unnecessary using the Four-way Test. 2

d) Recommend policy options that may be adopted by the LGU;

e) Draft policies based on the result of assessment;

f) Accomplish the Regulatory Reform Technical Report (RRTR); 3

g) Create a Monitoring and Evaluation System;

h) Create and/or update the database systems and the LGU website. The website shall include, all local ordinances, issuances and resolutions with their corresponding amendments; the most current and updated Citizen's Charter with all services offered classified as Simple, Complex, and Highly Technical. It should be business-friendly and accessible.

i) Establish regulatory management procedures and methodologies in the modification, adoption, implementation, and evaluation of existing local ordinances, issuances, and resolutions of LGU;

j) Conduct studies/reviews in the promotion of efficient government services and ease of doing business; ETHIDa

k) Conduct quarterly meeting and as need arises with proper documentation; and

l) Ensure regular and timely submission to DILG and ARTA.

The Regulatory Reform Team (RRT) shall conduct regular stocktaking, monitoring and recommendation of policy options using the same process and forms.

6.1.3 Stocktaking. Upon creation of the Regulatory Reform Team (RRT), its first agenda is to conduct an inventory of all existing issuances, ordinances, or resolutions implemented by the LGU. Use Annex 4: Regulatory Map.

There are three (3) approaches in stocktaking of local ordinances, issuances, and resolutions, to wit:

6.1.3.1  Assign the Secretary to Sanggunian and Records Department.

6.1.3.2  Request from all operational units.

6.1.3.3  Outsource the development of a database.

6.1.4 Review of local ordinances, issuances, and resolutions. The RRT may create a Regulatory Map 4 which provides an overview of the regulatory environment through identifying the correlation between and among the regulations. In addition to the Four-way Test provided herein, the Regulatory Map may also assist the RRT in assessing whether the policy is cumbersome, unnecessary, outdated and/or redundant.

In case that the local government is well capacitated in Regulatory Impact Assessment (RIA), the RRT shall conduct RIA and upload/submit the supplementary reports according to the guidelines to be released by ARTA.

6.1.5 Policy Option. Based on its review and assessment, the RRT shall recommend the repeal, amendment, consolidation, or retention of the regulation/s submitted for review. The RRT shall submit its recommendation to the Local Chief Executives for executive issuances, to the Vice Governor or the Vice Mayor for ordinances and resolutions. The recommendation shall be considered by the Sanggunian concerned in repealing or amending ordinances/issuances/resolutions.

6.1.6 Monitoring and Evaluation (M & E) System. M & E on policy review must be undertaken for all local ordinances, issuances, and resolutions to analyse whether the policy has achieved its desired objectives. The RRT may use the M & E to develop recommendations for future policy improvement.

6.1.7 Digitization and Use of Information and Communications Technology

6.1.7.1  DILG-ARTA Regulatory Reform Information System for LGUs or the Regulatory Reform for LGUs (RR4LGUs). DILG Field Offices shall be provided with accounts to access the RR4LGUs. All forms are downloadable on RR4LGUs. Accomplished forms shall be uploaded in the system for the accessibility of DILG-BLGD and ARTA.

6.1.7.2  Philippine Business Regulations Information System (PBRIS). All submitted inventories of business-related and business-affecting local issuances, ordinances and resolutions shall be uploaded in PBRIS pursuant to Sec. 17 (k) of R.A. 11032. Reference forms are Annex 4. Regulatory Map and Annex 5. New Issuances.

The PBRIS shall serve as primary data repository and as the public's source of information on updated regulations.

6.1.7.3  Website. It is recommended that LGUs shall utilize their respective official websites as an online repository of local ordinances, issuances, and resolutions for the purpose of transparency. The publication and posting requirement of local ordinances, issuances, and resolutions shall be complied with pursuant to the Local Government Code of 1991 and other existing laws, rules and regulations.

6.1.8 Capacity Building. LGUs or the RRT must attend various related training especially on EODB like regulatory impact analysis and others to strengthen their skills and understanding on the issuance, review and formulation of policies and regulations for their constituents.

7. Filing of Regulations

The RRT Secretariat shall furnish a copy of approved local ordinances, issuances, and resolutions to the University of the Philippines (UP) Office of the National Administrative Register (ONAR), pursuant to Administrative Code of 1987.

8. Roles and Responsibilities

8.1 The Department of the Interior and Local Government (DILG), shall:

8.1.1 Publicize the issuance of the Joint Memorandum Circular on Regulatory Reforms;

8.1.2 Develop and maintain the DILG-ARTA Regulatory Reforms Information System for LGUs or the Regulatory Reform for LGUs (RR4LGUs);

8.1.3 Conduct necessary orientations, workshops, capacity buildings to DILG Field Offices and LGUs on the Regulatory Reform Guidelines and system;

8.1.4 Ensure and monitor compliance of LGUs on the Regulatory Reform Guidelines;

8.1.5 Consolidate/filter all outputs in the RR4LGUs;

8.1.6 Notify ARTA of the submission in the RR4LGUs every last month of each quarter.

8.2 The Anti-Red Tape Authority shall:

8.2.1 Assist in the conduct of necessary orientations, workshops, capacity buildings to DILG Field Offices and LGUs on the Regulatory Reform Guidelines;

8.2.2 ARTA shall assess the outputs uploaded in the RR4LGUs pursuant to Section 5, paragraph 2 of R.A. 11032 and directly inform the relevant LGU on the result of the assessment;

8.2.3 Publish inventories of ordinances, issuances, and resolutions in PBRIS;

8.2.4 Prepare regulatory management manuals for LGUs as stipulated in Section 17 (g) of RA 11032. AIDSTE

9. Forms

9.1 Annex 1. Stakeholder Analysis. The Stakeholder Analysis provides a map of all the relevant stakeholders to determine the group or class where they belong, their willingness to engage, and their potential contribution to the implementation of local ordinances, resolutions, and issuances.

9.2 Annex 2. Four-way Test. Developed during the fourth cycle of Project Repeal, these guide questions that may assist the RRT in the decision-making process.

9.3 Annex 3. Regulatory Reform Technical Report. The Regulatory Reform Technical Report encompasses three (3) types of tertiary regulations: local ordinances, issuances, and resolutions whereby separate technical reports shall be created for each type. The RRTR shall include the recommended policy option, the list of other regulations it affects, the rationale for the policy option, and their possible impact of when adopted.

9.4 Annex 4. Regulatory Map. The form includes all pertinent information of the ordinances, issuances, and resolutions deemed for policy reform. The Regulatory Map may assist the RRT through outlining the local regulatory ecosystem.

9.5 Annex 5. New Issuances. The form is the list of new issuances, ordinances or resolutions after it was repealed, amended and consolidated including the retained one.

10. Submission of Reports and other Requirements

10.1 Downloading of forms. LGUs can download all the forms in the "Regulatory Reforms for Information System for LGUs or Regulatory Reforms for LGUs (RR4LGUs)."

10.2 Submission of accomplished forms.

10.2.1 LGUs shall submit soft copies of accomplished forms to their respective DILG Field Offices.

10.2.2 LGUs shall submit hard copies of accomplished forms directly to ARTA and copy furnish respective DILG Field offices. Hard copies must be duly signed by the Barangay, Local Chief Executive, in case of Administrative issuances; or Vice Governor/Vice Mayor in case of Ordinances and Resolutions.

10.3 DILG-BLGD shall consolidate/filter all outputs in the RR4LGUs. ARTA, who shall be notified by the former on the last month of each quarter, will assess the outputs uploaded in the system pursuant to Section 5 of R.A. 11032.

10.4 Likewise, DILG Regional and Provincial Offices shall consolidate all forms through the RR4LGUs and submit consolidated outputs to DILG-BLGD.

10.5 Deadline of Submission. To ensure compliance to the EODB and EGSD Act of 2018 and monitor implementation of the Regulatory Reform Guidelines in the localities, deadlines for submission of deliverables to be submitted to ARTA are hereby prescribed:

 

Phase	Element	Submission deadline	Output
1	Formation of Regulatory Reform Team	starting 2020	Executive Order/Resolution on the formation of the team
2	Stocktaking/	1st Quarter	Inventory of business related and non-business related ordinances/resolutions and issuances (2016-Present) *use Annex 4 Template
3	2nd Quarter	Inventory of business related and non-business related ordinances/resolutions and issuances (2005-2015) *use Annex 4 form
4	3rd Quarter	Inventory of business related and non-business related ordinances/resolutions and issuances (1995-2004) *use Annex 4 form
5	4th Quarter	Inventory of business related and non-business related ordinances/resolutions and issuances (1994 and older) *use Annex 4 form
6	Recommendation of Policy Option	regularly	Regulatory Reform Technical Report with Regulatory Impact Statement *use Annex 3 form

• The RRT can conduct regular regulatory reform every year using the same process and forms.

 

11. References

11.1 Republic Act 11032 or the "Ease of Doing Business and Efficient Delivery of Government Services (EODB-EDGS) Act of 2018" and its Implementing Rules and Regulations. AaCTcI

11.2 DILG Memorandum Circular No. 2018-214, dated 27 December 2018, "Reengineering of LGU Systems and Procedures in Compliance to EODB-EGSD Act of 2018."

11.3 DILG-DOF Joint Memorandum Circular No. 2019-01, dated 17 May 2019, "Guidelines for the Review, Adjustment, Setting and/or Adoption of Reasonable Regulatory Fees and Charges of Local Government Units."

11.4 UK Foreign & Commonwealth Office, Anti-Red Tape Authority, and Department of Trade and Industry. (December 2018). Project Repeal Guidebook: A Guidebook for the Pursuit of Regulatory Reform in National Government Agencies. Manila, Philippines.

11.5 Regulatory Reform: A Synthesis, OECD, Paris, 1997, page 11.

11.6 Executive Order No. 292 or "Instituting the Administrative Code of 1987."

12. Annexes

Annex 1: Stakeholders Analysis Template

Annex 2: Four-way Test

Annex 3: Regulatory Reform Technical Report Template

Annex 4: Regulatory Mapping Template

Annex 5: New Issuances

13. Effectivity

This Joint Memorandum Circular shall take effect immediately.

14. Approving Authority

Recommending Approval:

(SGD.) EPIMACO V. DENSING IIIUndersecretary, DILG

(SGD.) ATTY. ERNESTO V. PEREZDeputy Director General

Approved by:

(SGD.) GEN. EDUARDO M. AÑO (RET.)Secretary, DILG

(SGD.) ATTY. JEREMIAH BELGICA, REB, EnPDirector General, ARTA

15. Feedback

For appropriate action, inquiries and concerns regarding this policy should be directed/addressed to: EcTCAD

 

BLGD Director		ARTA Director General
Telephone number: (02) 925-0356	and/or	Telephone number: (02) 478-5091
Email: [email protected]		Email: [email protected]

 

ANNEX 1

Stakeholder Analysis

ANNEX 2

Four-way Test

ANNEX 3

Regulatory Reform Technical Report

ANNEX 4

Regulatory Mapping and Summary of Recommended Policy Option

ANNEX 5

New Issuances

Footnotes

1. See Annex 1: Stakeholder Analysis.

2. See Annex 2: Four-way test.

3. See Annex 3: Regulatory Reform Technical Report.

4. See Annex 4: Regulatory Map.