A CASE STUDY ON THE 72-HOUR TRANSACTION POLICY

OF THE CITY GOVERNMENT OF DAVAO

In Partial Fulfillment of the Requirements for

Public Policy Making, Philosophy and Practice (PA 306)

by

JAMAE CONCEPCION R. GARCIA

Submitted to

ROSALINDO R. COLASITO, DPA

March 18, 2014

Introduction

After Davao City Mayor Rodrigo R. Duterte took his oath of office on June 30, 2013, one of his
first marching orders for the departments in the City Government was to act on all permit
applications within 72 hours. This policy was to take immediate effect the following day, July 31,
2013.

The directive of the Mayor was issued verbally with the Anti Red Tape Act (ARTA) of 2007 or
RA 9485 cited as the legal basis. The 72-hour policy was further justified as a means to curb
corruption in the different departments of the City Government tasked with permits issuance
(e.g. Business Bureau, City Planning and Development Office, Office of the City Building
Official). In particular, the Office of the City Building Official (OCBO) was singled out and named
by the Mayor as one of the most corrupt and most complained-about departments on
unprocessed permits (SunStar, June 30, 2013).

As a background information, the Office of the City Building Official was created by virtue of
Executive Order No. 26, Series of 2011, “An Order Creating and Organizing An Ad Hoc Office of
the Building Official as a Separate and Distinct Department from the Office of the City Engineer,
Defining its Functions and for Other Purposes” of Mayor Sara Z. Duterte who preceded her
father as Davao City’s Chief Local Executive from 2010 to 2013. The OCBO was composed of
the building permit, electrical engineering and mechanical engineering divisions of the City
Engineer’s Office (CEO) that was then plagued by allegations of corruption when the younger
Duterte took the reins of the City.

Since its creation, the OCBO operated as an independent office from the CEO with the mandate
to carry out the provisions of the National Building Code of the Philippines or PD 1096 and the
enforcement of orders and decisions made pursuant to the said law (Sec. 305, PD 1096).
Specifically, the OCBO handled the processing of applications of building permits, accessory
and ancillary permits (e.g. electrical, mechanical, electronics, plumbing/ sanitary, sign) and
corresponding certificates (e.g. occupancy, use, operation). As reported by Mayor Sara Z.
Duterte in her State of the City Address on June 11, 2013, the OCBO has been posting
significant increase in collection from building permit and other fees and in the number of
permits issued from May 2011 to May 2013 (davaocity.gov.ph).

Notwithstanding OCBO’s performance report for the said period, its Acting Department Head
was replaced by the end of July 2013. Although most of the city department heads were also
replaced as part of the reorganization and reshuffling of the new local government, it was
notable that the newly-designated Acting Head of the OCBO was also the Acting Head of the
CEO. This raised the question, if not confusion whether the OCBO would continue operating as
an independent office pursuant to EO 26 of the former Mayor or was aggregately returned as
component divisions of the CEO.

Meanwhile, as the 72-hour directive of Mayor Rodrigo Duterte took full effect, the Mayor issued
an additional directive to both the departments tasked with permits issuances and to the
transacting public, which is to forward permit(s) application to the Office of the City Mayor when

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the 72 hours timeframe has lapsed without the appropriate action (issuance or denial) from the
concerned department (Sunstar, July 7, 2013).

The 72-hour Transaction Policy vis-à-vis the Policy Cycle

There are seven stages of the policy cycle, namely: agenda setting, policy formulation, policy
adoption, policy implementation, policy evaluation, policy change and policy termination. These
stages are neither neatly segmented nor always chronological in order but are woven together
and are interlapping at times (Steward, et. al., 2008).

This case study illustrates how the agenda, formulation, adoption and implementation of the 72-
hour transaction of the City Government of Davao came about through a top-down approach
determined by the the institutional agenda of the Local Chief Executive and his administration
who holds the power and authority over the city departments and the people of Davao City in
general. Moreover, this paper shows how the adoption and implementation of a policy is
expedited when willed by the so-called political elites.

Agenda Setting

Agenda setting is the first stage of policy cycle and an agenda is set “when the government
pays serious attention to an issue” (Steward, et. al., 2008). Cobb and Elder differentiate
between systemic agendas as “issues that might be considered for governmental action” and
institutional agendas as “issues explicitly up for active and serious consideration by decision-
making bodies” (Gupta, 2011). The 72-hour transaction policy is a clear example of an
institutional agenda since it was the first directive issued by the Mayor upon his assumption to
office and it was implemented at once or on the next working day, to be exact.

The 72-hour transaction policy was anchored on the issue of corruption in the City Government.
Unsurprisingly, the policy attracted strong public support for it was packaged and presented to
the public as a mechanism against corrupt and highly-bureaucratic processes, which affect
everyone who at one point or another has to transact and /or access the frontline services of a
given city department. It was also promoted as a policy for “the better good as it requires quick
service even for ordinary people” (Sunstar, July 7, 2013). Thus, the benefit of the policy to the
public was effectively underscored and its implementation was presented as a necessity.

Policy Formulation

Ideally, after an agenda is set, lawmakers specify the objectives, policy alternatives and adopt
the one that will give the best results (Steward, et. al., 2008). In the case of the 72-hour
transaction policy that was announced on the day of the incumbent Mayor’s oath taking
ceremony and implemented the following day, it is then reasonable to ask whether the policy
went through proper consultation/s with the concerned departments that will be the
implementers of the policy and with other parties that will be affected by the new policy. While
the policy may be justified as a way to address endemic corruption in the City Government, it is
still worth asking how the policy was formulated and if practical considerations were given
careful attention before a 72-hour deadline on permits processing was set.

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For example, the ARTA of 2007 was used as the general basis for the 72 hours deadline but the
relevant provisions of the ARTA in the delivery of frontline services were left out from the policy.
Under the ARTA, all applications and/ or requests in frontline services have to be acted upon as
prescribed by the agency’s Citizen Charter and the action should not take longer than 5 days for
simple transactions and 10 days for complex transactions from the day the application / request
was received (DILG MC, Nov. 4, 2008). As used in the ARTA, simple transactions “refer to
requests or applications submitted by clients of a government office or agency which only
require ministerial actions on the part of the public officer or employee, or that which present
only inconsequential issues for the resolution by an officer or employee of said government
office (Section 4a, RA 9485) and complex transactions “refer to requests or applications
submitted by clients of a government office which necessitate the use of discretion in the
resolution of complicated issues by an officer or employee of said government office, such
transaction to be determined by the office concerned” (Section 4b, RA 9485). Clearly, whether
permit application (of whatever nature) should be classified as simple or complex transaction
was a matter that became inconsequential when the 72-hour transaction policy was formulated
because as the name of the policy goes, neither the threshold for the simple nor the complex
transaction was adopted.

Inter-government transaction as a component step of permit issuance is another consideration

that was overlooked in the formulation of the 72-hour directive as far as the processing of
building and ancillary permits is concerned. Presented below is the building permit application
process flow before the 72-hour policy was issued:

Source: OCBO PowerPoint slides, July 2013

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As shown, a permit application goes through different offices like the City Planning and
Development Office (CPDO), Bureau of Fire Protection (BFP), and depending on the location
and/or height of the proposed building, the Department of Public Works and Highways (DPWH),
Department of Environment and Natural Resources (DENR) and Civil Aviation Authority of the
Philippines (CAAP). Granting for the sake of argument that the 72 hours countdown starts as
soon as the application is received by the OCBO (Step 2), still, the OCBO or even the City
Government has no authority over the BFP as to how many days it would take the latter to issue
a fire safety inspection certificate. BFP is a national agency with the Fire Code of the Philippines
as its legal basis and it normally takes this agency 5 days to issue a certificate. In the same
way, the local government has no authority over the other national agencies that issue
clearances as necessary like DPWH, DENR and CAAP, given their own legal bases and
process flows. Even the building permit for a 1-storey residential building that would only need a
BFP certificate could not be processed within 72 hours given the actual days of processing.

In contrast, the directive issued was only specific about one thing: that a permit must be issued
(or denied) within 72 hours upon receipt. It did not elaborate if the inter-government transactions
are counted or excluded in the given timeframe. Neither was it considered that the issuance or
denial of a permit is dependent if the applicant has secured the required clearances and
submitted the pertinent supporting documents. In a sense, the directive proved as a good
sound bite but was misleading.

Policy Adoption and Implementation

As mentioned in the preceding sections, the 72-hour transaction policy was adopted and
implemented as soon as it was issued. According to key informants, the OCBO through its then
Acting Department Head tried to comply with the directive and presented this amended
flowchart in a meeting with the Acting City Administrator sometime July 2013:

Source: OCBO powerpoint slides, July 2013

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Some OCBO staff who were present in the said meeting claimed that the above proposal was
dismissed as insufficient to the directive of the Local Chief Executive and in the following days,
the Acting Department Head of the OCBO was relieved of his post. He was replaced by the
Acting Head of the City Engineer’s Office.

With the change of leadership, the OCBO struggled on two fronts: complying with the 72-hour
transaction policy of the City Mayor and adjusting with the new internal systems and policies put
in place by the new Department Head. Compounding the challenges brought about by the
changes taking place in the office was the question if OCBO remained a separate and distinct
office from the CEO or if it was recategorized (again) as component divisions of the CEO in view
of the two offices having one and the same Department Head.

Key informants would later claim that the proposal shown above is more or less the same
process flow the OCBO adopted with the assumption of the new Department Head and that with
the movement of personnel from CEO to OCBO and vice-versa and with the Administrative
Division of the CEO taking control over personnel and management matters, it can be said that
the OCBO was aggregately returned as component divisions of the CEO.

Alternative Solutions: Policy Evaluation and Policy Change

As discussed, the implementation of the policy is problematic both to the implementing office
(OCBO) and to the consumers or the public applying for building, accessory and ancillary
permits.

Setting aside the questions of OCBO’s independence and zeroing-in on this policy meant to
curb corruption, the alternative solution is to conduct consultations with the aforementioned
national agencies so that agreements can be reached and systems for effectively carrying out
the directive be put in place if the end-goal is the faithful (meaning that a permit application
including all inter-government transactions is either approved or denied within 72 hours) and
long-term implementation of the 72-hour transaction policy.

While consultations are underway or say for instance, the local government and the concerned
national agencies do not come to terms with an agreement for the compliance of the Mayor’s
directive, then it should be made clear to the public that the 72-hour policy is only applicable
when the permit application is with the departments under the City Government and that the
countdown should be halted when the same is endorsed to national agencies, as needed.
Through this clarification, the service delivery of the concerned department levels off with the
expectations of its clients. At the same time, the objective to expedite processing of permits in
the City Government to eliminate the opportunity for corrupt government workers to ask grease
money or other compensation from clients in exchange for fast service is met.

Recommendation

Therefore, my stand is that the 72-hour transaction policy as implemented in the Office of the
City Building Official needs to be evaluated and changed based on the alternative solution
presented above.

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The evaluation of this policy should also take into consideration the following aspects that are
vital to office operations: availability of manpower resources, technical know-how and capacities
of the existing manpower, office supplies and equipment (e.g. computer, engineering and other
filed operations equipment) and service vehicles, among others. Specific plans and programs
should be put into place and implemented to strengthen the capacity of the OCBO to respond
effectively not only to the Mayor’s directive but as well as to the fast-paced development of
Davao City that is bringing in more and rapid infrastructure development.

Another important aspect to look at in evaluating this policy is whether standards as set forth by
the National Building Code of the Philippines and other laws regulating the operations of
agencies involved in the processing of permits are not compromised in favor of speed of
transactions. For example, more premium should be placed on ensuring the structural integrity
of a building or the strength of its foundation than the number of hours it took for the approval of
its permit. Performance evaluation as measured by the number of permits issued, collection
efficiency and number of inspections conducted in a given period of time should likewise be
considered.

By and large, this case study on the 72-hour transaction policy of the City Government of Davao
illustrates that a policy borne from a top-down approach has its advantages in terms of
immediate adoption and implementation. However, when the formulation of a policy is
haphazard, problems for the implementers and policy consumers inevitably arise during the
implementation stage. More than a year after this directive was issued by the City Mayor, it is
high time to evaluate its impact to the needs of the people and to the agenda or goal set by the
government.

References:

Casas, Arianne. Duterte imposes 72-hour transaction policy. (June 30, 2013) Retrieved March
2014 from: http://www.sunstar.com.ph/davao/local-news/2013/06/30/duterte-imposes-
72-hour-transaction-policy-290041

Gupta, Dipak. Analyzing Public Policy, Concepts and Techniques. (2 nd ed.) (2011). CQ Press Inc.

Steward, J. et. al. Public Policy: An Evolutionary Approach. (3rd ed.) (2008)

DILG MC 2006-164. (Nov. 4, 2008). Retrieved March 2014 from:

http://www.dilg10.org/v1/issuances/central/mc/2008/MC2008_164.pdf

Mayor Sarah Duterte gives SOCA. (June 2013) Retrieved March 2014 from:
http://www.davaocity.gov.ph/dcipc/newsimages/SOCAforweb20130614092135.pdf

National Building Code of the Philippines. Retrieved March 2014 from:

http://www.chanrobles.com/republicactno6541.htm#.UyhiN6iSy6w

72-hour deadline ‘to curb corruption’. (July 7, 2013) Retrieved March 2014 from:
http://www.sunstar.com.ph/davao/local-news/2013/07/07/72-hour-deadline-curb-corruption-
291293