The Role of the Business Chambers in

Local Governance of Bacolod City

Thesis by:
Aletheia Baribar
Juwilyn Demonteverde
Zion Espinosa
Genevive Mendoza
Nishal Nandwani

for
the completion of Political Science Research
as part of the curriculum of the Political Science course
in the University of St. La Salle-Bacolod
 CHAPTER I
INTRODUCTION

Background of the Study

The relationship between business and politics is necessary in a functional society.
Since the factors of production are generated by the business sector, its role in politics is
inseparable, integral and intrinsic. This study is focused on the local business sector’s
political role in the local economy.
By virtue of past recognitions, such as awards and inclusion into top ten lists for
its state of business environment, the local government of Bacolod City should be one of
the most accommodating to businesses among other cities, being popularly known as a
“business-friendly city.”
From ocular inspection, the business sector of Bacolod City is growing. An array
of new businesses emerged such as call centers and malls. Restaurant ventures are
regularly being tried and many succeed. Bacolod City, from Barangay Punta Taytay to
Barangay Banago is covered with businesses from electronic stores to pawnshops. The
main thoroughfare Lacson Street on both sides, from sidewalks to property lots are now
occupied by an array of businesses. The downtown area is filled with hundreds of narrow
boutiques and in every barangay of the city, there are still smaller shops and an
unimaginable sprouting of “sari-sari” stores. The business life of the city is growing fast,
no doubt, the city’s governance relies on this sector for its financial and fiscal survival.
The contributions of the business sector to the City of Bacolod are vital. Such
contributions include employment and taxes. Employment, taxation, and the sales of
businesses are important part of a political economy. This study will focus on the
importance and relational dynamics of business and governance within the local political
economy of Bacolod.
The contribution of the business sector to a city as harnessed by a local
government is an aspect of a two-way “social contract.” While businesses offer
employment and pay taxes, the government must also contribute to the business sector by
allowing the owners or operators to profit in the best way and to let their businesses grow.
By allowing business owners to grow, the government achieves more employment and
gain more from taxation. Thus, the study will find out what the business owners or
operators seek in Bacolod City and out of its local government, and what constantly
keeps them interested in owning or operating a business in Bacolod. Subsequently, the
study will describe the extent of local governance’ effectiveness in providing a positive
business climate for businesses to grow.
Because of the dynamic relationship between business and government, the
relationship has complex variances. The relationship is perceived “friendly,” when
government protects local businesses from foreign exploitation by supplying them with
advice on markets, technical assistance and soft loans to export sales. The relationship is
perceived adversarial when government is seen as a police officer controlling business
and abusive as a regulator. The government itself, however, is a customer, buying from
makers, industries, farmers, and other big providers to supply consumer demands.
According to Wilson (endnotes), in all cases, government can be the object of business
persuasion and even political pressure. This pressure from business will be studied as
well and if this is true in the local setting of Bacolod City.

Statement of the Problem

The political economy is a significant part of a civilized society; it keeps people
moving through their daily jobs and their daily lives. In Bacolod City, the business sector
is perhaps the most important and influential unit of its political economy. It is therefore
the purpose of this study to see how well does the local government unit of Bacolod City
respond in the best way to the needs of the business sector within the political economy.
Questions that need to be answered in order to accomplish this purpose are:
1. How much do business operators actually contribute to the employment of people in
Bacolod City? Is this level of employment adequate to making a city run smoothly?
2. Do the taxes on businesses return to business operators in a beneficial way?
3. What are the laws and policies that the government sets to regulate certain business
functions and operations? What are the governing purposes of these laws and
policies?
4. What do Bacolod business operators seek most from the local government in order to
have a sufficiently profitable business? Is the local government accommodating to the
entire environment of a business society?
5. What are the reasons/ bases of the participation of the business sector on the local
governance in Bacolod City?
6. What are the forms/ methods and strategies used by the business sector in its
participation in politics?

Scope and Limitation

This study will focus on the political role of the business sector in the local
economy—how businesses and the government unit form the local political economy,
how the business sector involves itself in city development plans, how government
policies affect the local business sector in increasing employment towards local economic
stability?.
Participants in this study are limited to respondents coming from the Metro
Bacolod Chamber of Commerce and Industry, Inc. classified into major business sectors
—manufacturing, financial and banking, agribusiness, and service—and from several
private business enterprise owners or operators around Bacolod. Confidentiality of the
respondents may serve as a limitation to the study. Newspaper articles and other media
records will be used depending on the availability of these records. If available, local
graphs and statistics will be used to measure employment levels, taxation percentages,
and local economic indicators.
The local government code will be looked into in order to see the jurisdiction and
influences it has on the City of Bacolod and to know if through this code, the local
government is accommodating enough for businesses to thrive and for the political
economy to improve.

Significance of the Study

The study is most significant because the business sector is the most influential
force in the political economy along with the local government unit. This study on the
political role of the business sector in the local economy is useful as scientific tool for the
business sector itself to act accordingly in correcting policy directions of Bacolod City as
a stakeholder in the political economy. Additionally, the business sector itself will
understand their social responsibility in effecting good local governance and how their
actions result into the public good and stability or instability of the local political
economy.
This study is significant for the academic community to determine in specific
terms what students ought to learn and lead them beyond a generalized understanding
within the four square walls of the classroom.
The Bacolod City local government unit, this study will provide better
understanding on how it can positively improve its relationship with the business sector
as a determining factor for good politics and quality governance. Government officials
wishing to know how to improve the economy of a city may turn to this study in order to
analyze the information and conceptualize solutions between the business sector and the
government unit.
This is also the first time the nature of business in the political economy will be
studied in thesis form by students of the University of St. La Salle-Bacolod. Thus, it will
be a useful addition to the catalogue of University Political Science theses. As business
works hand-in-hand with the government to build a civil political society, the results of
this study will never go out-of-style for students of political science.

Definition of Terms
The following terms are important to the study; hence, they are defined here
conceptually and operationally.
Business sectors - it is the social group that forms part of the society that
provides goods and services involving financial, commercial and industrial aspects.
Business operators - one who has legal title to something; an owner. One who
owns or owns and manages a business or other such establishment.
Local Government Units (LGUs) - a governing institution which has authority
over a sub national territorially defined area; in federal systems, a sub state territorially
defined area. Local government's authority springs from its elected basis, a factor which
also facilitates considerable variation in its behaviors both between and within countries.

Local governments - are administrative offices that are smaller than a state. The
term is used to contrast with offices at nation-state level, which are referred to as the
central government, national government, or (where appropriate) federal government.
They usually have some power to raise taxes, though these may be limited by central
legislation. Common names for local government entities include state, province, region,
department, county, prefecture, district, city, township, town, borough, parish,
municipality, shire and village
Pressure group - it is an interest group that endeavors to influence public policy
and especially governmental legislation, regarding its particular concerns and priorities.
Pressure groups are different from political parties. Political parties seek to create change
by being elected to public office, while pressure groups attempt to influence political
parties.
Business - a business (also called a firm or an enterprise) is a legally recognized
organization designed to provide goods and/or services to consumers, governments or
other businesses.
Politics - is the process by which groups of people make decisions. The term is
generally applied to behaviors within civil governments, but politics has been observed in
all human group interactions, including corporate, academic, and religious institutions. It
consists of "social relations involving authority or power" and refers to the regulation of a
political unit, and to the methods and tactics used to formulate and apply policy.
Interest groups - organizations that seek to influence in politics. They are often
active in political process. They may have both well defined political agendas and
financial resources necessary to exert broad influence on the political and regulatory
process.
Metro Bacolod Chamber of Commerce and Industry (MBBCI) - is the pulse
of business in Bacolod City. The organization is the leader in addressing a wide range of
issues that helps businesses succeed. From programs to publications, trade and business
delegations, to advocacy work and provide an invaluable service to its members.
Theoretical Framework
Nowadays, local governments increasingly perceive poverty and inequality as
problems to be confronted more efficiently through the creation of alliances between
them and the private sector. As stated in the article II Section 20 of the 1987 Philippine
constitution: “The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed investments;” and article
II Section 23: “The State shall encourage non-governmental, community based, or
sectoral organizations that promote the welfare of the nation”
(http://www.pcij.org/blog/wp-docs/1987-Philippine-Constitution.pdf).
Moreover, more transparent, participatory, and efficient governments open to
participation and public scrutiny, have become a high priority. Good governance, of
which the main elements are participation, transparency and accountability, can provide
more productive investment, spur faster economic growth, and alleviate poverty. The
participation of the private sector may be regarded as the process by which citizen
concerns, needs, values, expectations, and problems are taken into account into the
governmental decision-making process. It is a two-way communication process between
the government and citizens, with the overall goal of better decisions that are supported
by the public, the increased well-being of the population, and the reduction of poverty.
Participation of the private sector builds collective action between government authorities
and citizens, and it raises awareness on development responsibilities by civil society and
its involvement in public policy design. It contributes toward a more open, inclusive, and
transparent society, and it strengthens democratic institutions. Nowadays, civic
participation contributes to the public agenda, to the fight against corruption, and to the
development process of higher living standards.
Governance, therefore, includes the State (that is subdivided into Local
Government Units), but also transcends it--by including civil society or private sectors. In
order to create an encouraging political and legal environment, it needs the support of the
private sector like the business groups or the non-governmental organizations to facilitate
political and social interactions, such as mobilizing groups to participate in economic,
social and political activities. It also needs the private sector to activate the market and
generate jobs and income. In fact, for good governance to be sustainable, it requires
partnerships between government and civil society.
Citizens participate mainly when they feel they are an integral part of the process,
they have the necessary information, and they see their demands take shape. (Kaufmann,
Kraay and Zoido, 1999) In line with this, pressure groups will form. A pressure group is a
body, organized or unorganized, that actively seeks to promote its particular interests
within a society by exerting pressure on public officials and agencies. Pressure groups
direct their efforts toward influencing legislative and executive branches of government,
political parties, and sometimes general public opinion. Because any particular pressure
group reflects the interests of only a part of the population, it is argued that such
organizations are contrary to the interests of the general public. However, it is pointed out
that some interest groups supply legislators with much needed information, while others,
such as the labor unions, perform a broad representative function. The power of an
interest group is usually dependent on the size of its membership, the socioeconomic
status of its members, and its financial resources. (www.encarta.com)
Business sectors are considered one of the pressure groups in a local government
unit. However, because influencing public policy rather than electing a certain candidate
is the aim of an interest group, most groups avoid heavy involvement with one party and
generally remain at least formally nonpartisan. Some large pressure groups make a
considerable effort to mold public opinion by means of mailing campaigns, advertising,
and use of the communications media. On the other hand, there are other groups,
especially the more powerful organizations representing narrow interests that prefer to
have their activities and influence go unnoticed by the public at large.
 Conceptual Framework
ROLE OF BUSINESS SECTOR IN LOCAL GOVERNANCE

ACTIVATION OF
BUSINESS SECTOR
MARKET
EARN PROFIT LOCAL GOVERNANCE
PROVIDE
USE RESOURCES POLITICAL &
EMPLOYMENT AND
FOR COMPANY LEGAL ENVIRONMENT
GENERATE INCOME
PROFIT PROGRESS
THRU PROJECTS
USE RESOURCES HEALING
PROVIDE
FOR COMMUNITY SOCIAL PROBLEMS
INVESTMENT
DEVELOPMENT HELPING
CLIMATE
USE RESOURCES CITIZENS AND COUNTRY
STIMULATE THE
FOR PUBLIC
ECONOMY
CHARITY
ALLEVIATE