January 0f To SUBJECT MEMORANDUM CIRCULAR NO. 2020-01 8, 2020 ALL PROVINCIAL GOVERNORS, CITY AND MUNICIPAL MAYORS REQUIRING RISK-PROFILING AND REMOVING LOCATIONAL, CLEARANCE AS A REQUIREMENT FOR INITIAL APPLICATION IRENEWAL OF BUSINESS PERMIT OF COMMERCIAL ESTABLISHMENTS LOCATED IN SHOPPING MALLS AND CENTRAL BUSINESS DISTRICTS BACKGROUND AND LEGAL BASES 1A. 1.2. 13, 14. 15. 16. In the 2020 World Bank Doing Business Report, the Philippines ranks 17st out of 190 Economies in Starting A Business (SAB). The SAB indicator is the lowest amongst the ten (10) indicators of the report, hence, there is an urgent need to improve its score and the Philippine performance through improvement of service delivery by reducing documentary requirements, processing time and signatories for transactions. ‘As stipulated in 0+10 Socio-Economic agenda and as highlighted in the Philippine Development Plan 2017-2022, the Duterte Administration is pursuing increasing competitiveness and ease of doing business in the Philippines through a people centered, clean, efficient and effective government. Republic Act No. 11032 or The Ease of Doing Business and Efficient Services Delivery Act of 2018, signed by the President on May 28, 2018, and its Implementing Rules and Regulations effective on August 4. 2019, covers all government offices and agencies including local government units. F Section 5 of R.A. No. 11032, mandates all offices and agencies which provide government services 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. ‘The aforesaid provision also requires all the foregoing offices and agencies to coordinate with the Anti-Red Tape Authority (ARTA) 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the review of existing laws, ‘executive issuances and local ordinances, and recommend the repeal of the same if deemed outdated, redundant, and adds undue regulatory burden to the transacting public’. Section 17(f) of RA. 11032 empowers ARTA to “recommend policies, processes and systems to improve regulatory management to increase the productivity, efficiency, and effectiveness of business permitting and licensing agencies"4, PURPOSE This Memorandum Circular is issued to further simplify and expedite the processing, approval of initial and/or renewal of business permits for commercial establishments. located in shopping malls and central business districts, thereby reducing unnecessary regulatory burden to applicants or requesting parties, in compliance with R.A. No. 11032 and its IRR. SCOPEICOVERAGE This Memorandum Circular shall apply to the issuance of locational clearance or zoning permits, or an equivalent permit which has similar functions thereof as provided in the definition below, required of commercial establishments in shopping malls and central business districts for the issuance of an initial and/or renewal of business permits by all local government units (LGUs) DEFINITION OF TERMS 4.1. Applicant : is any individual, firm, partnership, corporation, head of any government or private institution, organization of any character applying for the issuance of locational clearance (DILG-DPWH-DICT-DT! JMC 2018-01); 4.2, Authority : refers to the Anti-Red Tape Authority created under Section 17 of R.A. No. 11032 4.3. Business Permit : is a document that must be secured from the city or municipal government, usually through its Business Permits and Licensing Office (BPLO) for a business to legally operate in the locality (IRR of RA 11032); 4.4, Commercial Establishment : is an existing or aspiring business entity that wishes to lease business space/s and operate within a Shopping Mall or Central Business Districts 4.5. Central Business Districts : areas designated principally for trade, services and business purposes as specified in the Comprehensive Land Use Plans of Local Governments (House and Land Use Regulatory Board, Comprehensive Land Use Plan Guidebook); 4.8. Central Business District Management : private individuals or entities, associations, cooperatives, institutions or corporations that oversee the major urban development and Land Planning of the Central Business District; 4.7. Comprehensive Land Use Plan : The Comprehensive Land Use Plan (CLUP) refers to the document, formulated by the local government in consultation with its stakeholders, that defines or provides guidelines on the allocation, utilization, development and management of all lands within a given territory or jurisdiction according to the inherent qualities of the land itself and supportive economic, demographic, socio-cultural and environmental objectives (Republic Act No. 11201 or the Department of Human Settlements and Urban Development Act); 4.8. Locational Clearance : is a clearance issued by the Zoning Administrator/Zoning Officer to a project that is allowed under the provisions of an ordinance of a particular City/Municipality. It is a requirement for the issuance of Building Permit 2and Business Permit (House and Land Use Regulatory Board, Comprehensive Land Use Plan Guidebook); 4.9. Mall Management : private individuals or entities, cooperatives, institutions or corporations that own, operate andior manage the shopping mall 4.10. Shopping Malls : is @ large establishment containing many offices or retail spaces to be used for a variety of business enterprises. These spaces are usually owned by the private management offered in a lease agreement to the tenants. 5. POLICY DIRECTION ‘As directed by President Rodrigo Roa Duterte in his fourth State of the Nation Address last July 22, 2019, all government agencies are required to ‘simplify’ government services and permits. Following the review of the documentary requirements needed to apply for or renew business permits, the Authority deems that the locational clearance required from commercial establishments is redundant and adds undue regulatory burden. The fact that a commercial establishment is already operating or proposes to operate within a commercial building (e.g. malls, commercial centers, etc.) or at a declared central business district necessarily means that it is located in a commercial area wherein the appropriate locational clearance was previously submitted by the mall owner or management concerned. Requiting this further from the commercial establishments only results in a redundancy and additional cost to the public. To address this redundant and undue regulatory burden, all Cities and Municipalities shall ‘observe the following standards in the issuance of locational clearance as a requirement for the issuance/renewal of business permit of all local government units: 5.1. Availability and Accessibility of Local Government Comprehensive Land Use Plan The local government unit should ensure the availability and accessibility ofits CLUP and relevant Zoning/District Plans to the public.. The plans should be posted in the LGU website and must be readily available in the City Planning and Development Office or other counterpart office. 5.2. Risk-Profiling of Business Permits Applications/Renewal based on geographic location The local government unit is prescribed to strictly categorize business applications and/or renewals basing on the applicant's proposed business address, type of business activity, and the LGU's comprehensive land use plan. The address and type of business activity should be specified in the unified business application form. 5.3. Business Permits Applications/Renewals exempted from Locational Clearance Commercial establishments located: within Shopping Malls and Central Business Districts as determined in the Risk-Profiing of Business Permit Applications/Renewals, are not required to secure locational clearances or zoning ordinances for the initial application/renewal of business permits from their respective territorial Local Government Unit.5.4. Prior to the occupation of aspiring commercial establishment, Mall Management and Central Business District Management are presumed to have already complied with, the locational clearances/zoning ordinances required of them. Thereby, the business spaces are automatically presumed to have already undergone the same requirement. As such, the submission of the contract of lease, concession agreement, or any other equivalent contract or agreement between the Mall Management and Central Business District Management and the commercial establishment shall be sufficient basis for the issuance of the business permit applied for by the latter. Mall Management and Central Business District Management are expected to strictly ‘observe and comply with the locational clearances or zoning ordinances and ensure the same compliance of aspiring commercial establishments in registering a business under their properties. Failure to ensure the compliance of tenants is tantamount to dereliction to local zoning laws and ordinances. Post Auditing of Business Tenants located within Shopping Malls and Central Business Districts To ensure compliance to the local zoning ordinances, adherence to the CLUP, and the accuracy of information given regarding a business activity, the LGU is authorized to conduct annual post-audit inspections of commercial establishments in coordination with the “Mall Management and/or Central Business District Management. The business permits of commercial establishments determined to be non-compliant to local zoning ordinances will be automatically revoked, This is without prejudice to the prosecution for any criminal violation which the applicant may have committed for any malicious misrepresentation and wrongful information given in the process of applying for an initial or renewal of business permit. PENAL PROVISIONS Non-compliance with this Memorandum Circular is tantamount to dereliction of duty and shall be dealt with accordingly under pertinent laws, rules, and regulations. FEEDBACK All inquiries and concerns should be coursed through the Authority through any of the following means: Telephone Number — (02) 478 5099 E-mail Address — info@arta.gov.ph ‘Website — www.arta.gov.ph Facebook - Anti-Red Tape Authority Twitter — @ARTAgovph Instagram — @ARTAgovph Hard copies of letters and documents should be addressed to the Authority at 395 G/F HPGV Building, Senator Gil Puyat Avenue, Makati City, Philippines 1200.8, EFFECTIVITY This Circular shall take effect immediately and will be implemented simultaneousty with the effectivity of the Implementing Rules and Regulations of the RA. 11032.