Barangay clearance requirement

THE DEPARTMENTS of Trade and Industry, Interior and Local Government and Information and Communications Technology recently signed a joint memorandum circular ordering all cities and municipalities to streamline business permits and licensing systems using revised standards.

Under the circular, local government units (LGUs) should process applications for business registrations within two days, while renewals should be completed in one day.

For this purpose, new registrations and renewals should have a maximum of three steps to accomplish. In addition, LGUs have to use uniform print and electronic forms, with only two signatories needed for business permits.

The circular is aimed at improving the business climate in the country and encourage the entry of foreign investors who have complained about the difficulty of securing the licenses and permits needed to do business in our cities and municipalities.

Although there have been considerable improvements in the business registration process in the national level and the majority of highly urbanized LGUs, a lot of problems still persist in many of  the barangays.

Authority

The Local Government Code authorizes barangays to levy taxes, fees and charges on certain businesses in their territory that shall exclusively accrue to them.

Corollary to this authority, the law provides that “no city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the barangay where such business or activity is located or conducted. For such clearance, the sangguniang barangay may impose a reasonable fee.”

The barangay is obliged to act on the license or permit application within seven working days from its filing. In case the license or permit is not issued within that period, the city or municipality may issue the said license or permit.

The reality on the ground though is, for political reasons, city or municipal officials are averse to the idea of overriding barangay officials on this matter unless they belong to different political camps.

Although the law has imposed strict conditions on the taxing power of barangays to prevent their abuse, some barangays have come up with imaginative ways to go around the restrictions.

They enact ordinances disguised as regulatory measures to promote the public welfare but are, in reality, revenue-raising in character, or aimed at soliciting additional funds for the barangay.

Or make expanded interpretations on how certain laws or municipal ordinances should be enforced in their jurisdiction.

Response

The barangay clearance requirement is a virtual gold mine for enterprising barangay officials.

Any profit-making activity in the barangay is susceptible to the clearance requirement on the pretext that its regulation is necessary to protect the welfare of the residents.

Questioning the validity of this requirement before municipal or city officials concerned would be an exercise in futility because the latter will not dare step on the toes of the people whose support they will need during election time.

And forget the idea of seeking judicial relief because the barangay officials will take that action as an affront to their integrity that would justify a strong retaliatory response.

In barangays whose officials have “political kingpin” attitudes, affronts of this nature could result in the person who dared question the actions being declared persona non grata and barred from doing business.

Under these circumstances, if a businessman feels strongly about doing business the right way, he just have to comply with all the clearance requirements, no matter how unreasonable they may be.

If doing so would not be worth the effort and time spent, he can always come up with the right amount of arguments to convince the barangay officials to issue the requested clearance.

Interference

That’s the easy part. Besides receiving facilitation fees, some barangay officials want to have a piece of the action in the business that seeks clearance to operate in their area.

If the business, say, wants to post a security guard in its premises, the barangay chair would recommend the security agency to do the job.

The reason often given to justify the suggestion is to ensure that only trustworthy guards are assigned to the barangay. On the side though, he gets a commission from the security agency if his recommendation is favorably acted upon.

Failure to grant the barangay chair’s request could result in destructive nocturnal activities or pilferages in the business premises.

If the business has transportation or hauling requirements, the barangay chair will be happy to offer the services of his or his friends’ private vehicles for that purpose.

Turning down the proposal may see the business operator’s motor vehicles being occasionally stopped or questioned for violation of the barangay’s traffic regulations.

The challenge to the Department of Interior and Local Government is to make barangay officials understand that the speedy processing of license and permits applications within their areas of responsibility will redound to the best interests of their constituencies.

Hopefully, the subject circular will meet the expectations of its signatories and not suffer the same fate as the memoranda of agreement or joint undertakings that government offices routinely enter into whenever a new administration takes over the government.

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