1) Why this topic is confusing in practice

In the Philippines, clinics often sit at the intersection of three overlapping regulatory ideas:

Local regulation of businesses (Mayor’s/Business Permit, local fees, zoning, fire safety, sanitation, signage, etc.).
Regulation of health facilities and the practice of professions (licensing, accreditation, professional regulation).
National “ease of doing business” policies that standardize and limit what local governments may require.

Because of this overlap, many clinics encounter conflicting statements such as: “Doctors are professionals so they’re exempt,” versus “Any clinic is a business so it needs a Mayor’s Permit,” versus “DILG said it’s streamlined.” The reality is that the correct answer depends on the clinic’s legal/operational set-up, and on the current LGU ordinance and the latest administrative issuances applicable to LGUs.

2) What Department of the Interior and Local Government (DILG) circulars can and cannot do

What DILG circulars can do

DILG issuances (often styled as Memorandum Circulars, and sometimes joint issuances with other agencies) commonly do the following:

Standardize procedures for Business Permits and Licensing Systems (BPLS) across LGUs (e.g., checklists, steps, timelines, one-stop shops).
Enforce national policy limits on what LGUs may demand (e.g., discouraging “redundant” requirements; requiring transparency of fees).
Clarify how LGUs should treat certain applicants or scenarios (e.g., renewal vs. new, online processing, inspection scheduling).
Direct compliance with laws like the Ease of Doing Business/Anti-Red Tape framework (processing times, automatic approval rules subject to conditions).

What DILG circulars generally cannot do

Create a tax exemption or fee exemption that the law does not allow. Local revenue powers are governed primarily by the Local Government Code and the LGU’s own revenue ordinances. A circular can guide, but a true exemption must be traceable to a statute and/or a valid local ordinance implementing that authority.
Override an LGU ordinance outright unless the ordinance is unlawful and successfully challenged through proper channels.
Eliminate national health facility licensing requirements imposed by agencies that regulate health facilities.

Practical takeaway: If someone claims “DILG exempted clinics from business permits,” treat that as an overstatement until you identify: (a) the exact issuance; (b) the exact clinic scenario covered; and (c) whether the claimed exemption is actually a procedural streamlining (less paperwork) rather than a legal exemption (no permit/fee at all).

3) Distinguish “business permit exemption” from “less paperwork”

A lot of disputes come from mixing these concepts:

Exemption from business permit: The clinic truly does not need a Mayor’s/Business Permit (or does not need a specific class of local permit/fee).
Exemption from a requirement: The clinic still needs the permit, but is excused from submitting a particular document (e.g., repetitive submissions, notarized copies when originals already on file).
Streamlined/conditional processing: The clinic may submit fewer items initially, with post-audit or scheduled inspection later.
Different permit category: Not a business permit, but an LGU may require professional tax receipt / occupational permit depending on local rules, especially for individual professional practice.

You must identify which of the above is actually being claimed.

4) The legal framework clinics must navigate

A. Local Government regulation (core for “Mayor’s Permit”)

LGUs regulate businesses operating within their territory, commonly through:

A Business Permit (Mayor’s Permit) requirement via local ordinance.
A Local Revenue Code that imposes local taxes/fees (business tax, regulatory fees, sanitation fees, garbage fees, signage fees, etc.).
Police power regulation (zoning, health and safety, nuisance control), including inspections.

Even when an operator is a licensed professional, once there is an establishment—a clinic with a place of business, staff, equipment, patient flow, or a corporate vehicle—LGUs frequently treat it as a business subject to permit and regulatory oversight.

B. National health facility licensing / regulation

Health-related establishments may also need national licensing and compliance from Department of Health (DOH) or other regulators, depending on services:

Facility licensing/registration classifications (varies by service: consultation clinic, diagnostic facility, ambulatory surgical clinic, dialysis, etc.).
Sanitation and infection control standards.
Laboratory and imaging rules for regulated services.

Important: A national license is usually not a substitute for a local business permit; LGUs often treat it as one compliance document among others.

C. Ease of Doing Business / anti-red tape

National policy pushes LGUs to:

Publish complete checklists and fees.
Reduce steps, consolidate permits when allowed, enforce time limits.
Avoid requiring unnecessary documents.

This environment often produces DILG-led guidance that is mistakenly described as “exemptions.”

5) Clinic scenarios and how “exemption” claims usually arise

Below are the most common clinic configurations—each with different permit logic.

Scenario 1: Purely individual professional practice with no “clinic establishment”

Examples: a doctor provides consultations by appointment only, without a staffed clinic, no signage, minimal equipment, possibly home-based with no patient traffic.

Some LGUs treat this as primarily the exercise of profession and may focus on professional tax/occupational requirements rather than a full business permit.
Other LGUs still require a business permit if there is a dedicated place of business open to the public.

Verification point: This is where “exemption” claims are most common—and most variable by city/municipality.

Scenario 2: A small clinic as an establishment (with staff, signage, regular hours)

Even if owned by a physician, once it operates as an establishment (employees, reception, posted clinic hours, equipment, patient queue), many LGUs require a mayor’s permit and classify it as a business.

Verification point: Here, “exemption” usually means “reduced documentary requirements” or “fast-track processing,” not “no permit.”

Scenario 3: Clinics owned by a corporation/partnership, or multi-specialty centers

This is typically treated as a business entity. Claims of total exemption from business permitting are less credible.

Scenario 4: Clinics located inside a hospital, mall, or another permitted establishment

Sometimes the issue becomes whether:

the clinic is a separate business (needs its own permit), or
it is merely a department/unit of the host facility (covered under host permits).

Verification point: Look at the lease/contract, signage, receipts, SEC/DTI registrations, and whether the clinic bills separately.

Scenario 5: Special status operators (BMBE, cooperative, charitable institution)

Some operators may qualify for statutory or ordinance-based incentives affecting taxes and sometimes fees, but the scope is narrow and paperwork-heavy.

BMBE status may change treatment for certain taxes/fees, depending on implementing rules and local ordinances.
Cooperatives may have exemptions under cooperative law and local implementation, but the scope and proof requirements matter.
Charitable/non-stock entities can sometimes claim exemptions on certain taxes, but regulatory fees and permits may still apply.

Verification point: Even when there is tax exemption, LGUs may still require a permit for regulatory oversight (but should reflect the correct tax treatment).

6) What to look for in “DILG circulars” that mention exemptions

When you obtain the issuance, read it with four filters:

Is it a DILG-only circular, or a joint issuance with agencies like Department of Trade and Industry (DTI) or Anti-Red Tape Authority (ARTA)? Joint issuances often relate to BPLS streamlining and document limits.
Does it use the word “exempt,” or does it actually say “shall no longer be required to submit”? The second is often a documentary simplification, not a permit exemption.
Is it limited to a narrow category (e.g., a kind of activity, a kind of applicant, or a kind of fee), and does it require proof?
Does it cite a legal basis (statute/IRR) that actually authorizes the exemption? If the circular does not anchor the exemption in law/ordinance, treat it as guidance, not a blanket exemption.

7) The verification workflow: how to confirm the current rule

This is the practical, defensible method to verify what applies today in a specific LGU.

Step 1: Identify the clinic’s “regulatory identity”

Write down:

Operator type: individual / corporation / partnership / non-stock.
Scope of services: consultation only vs. diagnostics/lab/imaging vs. procedures.
Location and footprint: stand-alone vs. inside another facility.
Staffing and public-facing operations: employees, posted clinic hours, signage.
Billing/receipts: professional fee only vs. facility fee and itemized services.

This determines whether the clinic resembles professional practice or a business establishment.

Step 2: Secure the controlling local ordinances (not just a checklist)

You need the LGU’s:

Business permitting ordinance / BPLS ordinance (if separate),
Revenue Code / Tax Ordinance (business tax, regulatory fees),
Any health/sanitation ordinance affecting clinics,
Zoning ordinance and relevant local clearances rules.

Why this matters: Many “exemptions” are actually created (or limited) by the LGU’s own ordinance, and the BPLO’s checklist may be only a summary.

Step 3: Obtain the exact DILG issuance being relied on (current version)

Do not rely on screenshots, forwarded messages, or old PDFs without provenance. Obtain:

The issuance title/number/date,
Full text with attachments/annexes,
Confirmation whether it has been amended, superseded, or replaced.

Step 4: Check whether the issuance is (a) procedural or (b) substantive

Procedural: steps, timelines, documentary simplification, inspections sequencing.
Substantive: true exemption from a permit, fee, or tax.

If it’s substantive, it must have a strong legal anchor.

Step 5: Map “what is required” vs. “what can be waived”

Create a two-column list:

Column A: requirements demanded by the LGU (permit + each clearance/document + each fee).
Column B: legal basis for each (ordinance section, statute, circular section).

Anything in Column A without a clear basis is the pressure point for challenge/clarification.

Step 6: Get a written, LGU-issued determination

Verbal assurances are unreliable. Ask for:

A written assessment from the BPLO/City or Municipal Legal Office citing the basis of any claimed exemption, or
A notation in the application/assessment that specific taxes/fees are “not applicable” and why.

If the LGU refuses to issue a written position, document your request and the response.

Step 7: Validate national licensing implications (if applicable)

If the clinic is in a category that needs DOH licensing/registration, confirm:

Whether the LGU is asking for proof of national licensing as a precondition,
Whether the clinic is applying as “new” or “renewal,”
Whether the requested documents are relevant to the clinic’s classification.

8) Red flags: when an “exemption” claim is likely wrong

The claim is based on a social media post or a one-page checklist, not the issuance/ordinance text.
The “exemption” is described broadly (“all clinics are exempt”), with no clinic type limitation.
The issuance is very old and the LGU’s current process clearly evolved (new online portal, new revenue code, new ordinances).
The clinic is run through a corporation or operates like a facility (staff, signage, multiple doctors, equipment) yet claims total exemption from permits.
The exemption is said to be from all fees, including regulatory fees; true “all-in” exemptions are uncommon and usually narrow.

9) Practical checklist for clinic operators

Use this to self-audit before confronting the issue at the BPLO:

Do you have a separate place of business open to the public?
Do you have employees (receptionist/nurse/tech) or outsourced staff under your control?
Do you charge facility fees (not just professional fees)?
Do you have signage and regular business hours?
Are you operating under DTI/SEC registration as a business name/entity?
Are you offering regulated services (lab, imaging, dialysis, ambulatory surgery, etc.)?
Are you located inside another establishment, and do you bill separately?

The more “yes” answers, the less plausible a total business permit exemption becomes—though documentary streamlining may still apply.

10) Documenting and preserving your position (for disputes)

If you need to contest an assessment or requirement:

Keep copies of:
- the LGU ordinance sections relied upon,
- the full DILG issuance,
- your application and the assessment form,
- receipts and prior-year permits,
- written correspondence.
Frame arguments as:
1. lack of legal basis (no ordinance/statute authorizing the requirement), or
2. conflict with controlling rules (national streamlining policy), or
3. misclassification (the clinic is being assessed under the wrong category).

Avoid framing it as “discretion”; permitting and assessments should be rule-based.

11) Key idea to remember

For clinics, “business permit exemptions” are rarely blanket. What is common is:

classification disputes (professional practice vs. business establishment), and
streamlining rules (limited documentary requirements, faster processing, standardized checklists).

To verify the current rule, you must always anchor the answer in: (1) the clinic’s facts + (2) the LGU’s current ordinances + (3) the full, current text of the relevant DILG issuance (and any joint BPLS issuances), including whether it has been superseded.