TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -6 P2:31 SENATE RECEIVED bY. S. No. 1054 Introduced by Senator Jinggoy Ejercito Estrada AN ACT INSTITUTIONALIZING THE SHARED SERVICE FACILITIES (SSF) PROJECT FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES) BY AMENDING REPUBLIC ACT NO. 6977, OTHERWISE KNOWN AS THE MAGNA CARTA FOR SMALL ENTERPRISES, AS AMENDED BY REPUBLIC ACT NO. 9501, OTHERWISE KNOWN AS THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES EXPLANATORY NOTE According to the 2023 List of Establishments of the Philippine Statistics Authority (PSA), 99.63% of the total number of businesses in the country are considered as micro, small and medium enterprises (MSMEs), and collectively, they generated 6.35 million jobs which is equivalent to 66.97% of the country's total employment. 1 These figures illustrate the significant contribution of the MSMEs to the country's progress, as they are considered the "growth engines of the national economy." This bill, which was reported out by the Committee on Trade, Commerce and Entrepreneurship and already approved on Third Reading by the Senate during the 19th Congress, aims to strengthen the support of the national government to this vital sector through the institutionalization of the Shared Service Facilities (SSF) program of the Department of Trade and Industry (DTI). Under the said project, the DTI 1 2023 Philippine MSME Statistics. Accessed through https://www.dti.gov.ph/resources/msme-statistics/
provides MSMEs access to technology by granting eligible cooperators (which can be government agencies, local government units, state universities and colleges, or private entities such as cooperatives, private schools, non-government organizations, etc.) with machinery, equipment, tools, and other auxiliary items, skills and knowledge to be used by MSMEs and other potential entrepreneurs under a shared system. As of December 2024, the government has allocated P3.7 billion since 2013 and funded the establishment of 3,651 facilities with over 700,000 MSMEs and other users assisted. In 2013, KAAGAP Development Multi-Purpose Cooperative (KAAGAPMUCO) in Agusan del Sur was granted PO.5 million worth of SSF (i.e. 85 units of manual twining machine, 10 units of electric twining machine and 13 units loom weaving equipment) by the DTI to aid them in their coco-coir processing. The intervention resulted in the increase in monthly production of coco net from 50 to 300 rolls. In 2014, their sales amounted to P8 million, and further rose to P12 million in 2015.3 San Jose Vendors Multi-Purpose Cooperative (SJVMPC) in Occidental Mindoro was provided Computerized Embroidery Machines through the SSF Project in 2015 and in 2018. SJVMPC demonstrated success in its bag-making operations, achieving 194% increase in sales and 75% increase in the number of beneficiaries.* Their business has since expanded to other ventures and their number of full-time employees tripled. The Abaca Processing Facility in Zamboanga del Norte, built in partnership with the Santa Fe Upland Farmers Association, was given decorticating and spindle machines under the DTI's SSF project. This resulted to a scaled-up production from 800-1,000 kilograms of abaca fiber and eventually reaching 3,000-4,000 kilograms, and a significant increase in the farmers' income.5 2 Ibid. 3 https://www.dti.gov.ph/regions/caraga/caraga-success-stories/ 4 https://www.dti.gov.ph/archives/regional-archives/mimaropa-success-stories-regional-archives/sewing- dreams-into-reality-san-jose-vendors-multi-purpose-cooperative/ 5 https://pia.gov.ph/helping-msmes-since-2013-dtis-ssf-project-hopes-to-uplift-small-businesses-as-pbbm- paves-way- forward/#:~:text=SSF%20success%20stories%20highlight%20the,one%20of%20these%20success%20stories.
These success stories prove the effectivity of the SSF Program in improving the production capacities of the beneficiaries, which in turn resulted in higher sales, revenues and income, upgrading the value of products, expanding the business, and ultimately uplifting the quality of life of many Filipinos, especially in the countryside. In view of the foregoing, the immediate passage of this bill is earnestly sought. JINGGOY EJERCITO ESTRADA
TWENTIETH CONGRESS OF THE ) ) REPUBLIC OF THE PHILIPPINES First Regular Session AUG -6 P2:31 SENATE RECEIVED SY S. No. 1054 Introduced by Senator Jinggoy Ejercito Estrada AN ACT INSTITUTIONALIZING THE SHARED SERVICE FACILITIES (SSF) PROJECT FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES) BY AMENDING REPUBLIC ACT NO. 6977, OTHERWISE KNOWN AS THE MAGNA CARTA FOR SMALL ENTERPRISES, AS AMENDED BY REPUBLIC ACT NO. 9501, OTHERWISE KNOWN AS THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
Section 1. Republic Act No. 6977, as amended by Republic Act No. 9501, is
2 hereby further amended by inserting new Sections 16 and 17 to read as follows, and renumbering the succeeding sections accordingly: "SEC. 16. ESTABLISHMENT OF SHARED SERVICE FACILITIES (SSF) FOR MSMES. - IN ORDER TO ADDRESS THE GAPS IN THE PRODUCTION VALUE CHAIN, PROMOTE INNOVATION AMONG MSMES AND ENHANCE THEIR CAPACITIES TO PRODUCE AND OFFER SOPHISTICATED AND DIVERSE PRODUCTS AND SERVICES, THE SHARED SERVICE FACILITIES (SSF) PROGRAM OF DEPARTMENT OF TRADE AND INDUSTRY (DTI) IS HEREBY INSTITUTIONALIZED. "THE SSF PROGRAM SHALL ENTAIL SETTING UP COMMON SERVICE FACILITIES OR PRODUCTION
CENTERS FOR CERTAIN PROCESSES TO GIVE MSMES ACCESS TO BETTER TECHNOLOGY AND MORE SOPHISTICATED EQUIPMENT TO ACCELERATE THEIR BID FOR COMPETITIVENESS AND HELP THEM GRADUATE TO A NEXT LEVEL WHERE THEY COULD TAP BETTER AND WIDER MARKETS AND BE INTEGRATED IN THE GLOBAL SUPPLY CHAIN. THE PROJECT MAY BE IMPLEMENTED IN COOPERATION WITH THE DEPARTMENT OF SCIENCE AND TECHNOLOGY (DOST), AND OTHER GOVERNMENT AGENCIES, THE ACADEME, LOCAL GOVERNMENT UNITS (LGUS), AND PRIVATE ORGANIZATIONS. "SHARED SERVICE FACILITIES REFER TO MACHINERY, EQUIPMENT, TOOLS, SYSTEMS, ACCESSORIES, AND OTHER AUXILIARY ITEMS, SKILLS, AND KNOWLEDGE THAT ARE BEING PROVIDED BY THE DTI UNDER A COMBINED AND COLLECTIVE SYSTEM TO ITS TARGET BENEFICIARIES. "THE DTI, IN COORDINATION WITH RELEVANT GOVERNMENT AGENCIES, LGUS, PRIVATE INSTITUTIONS AND STAKEHOLDERS, SHALL ALSO ESTABLISH SSF-FABRICATION LABORATORIES (SSF- FAB LABS), WHICH REFER TO HIGH-END SSFS EQUIPPED WITH AN ARRAY OF FLEXIBLE COMPUTER- CONTROLLED TOOLS THAT COVER SEVERAL DIFFERENT LENGTHS AND SCALE AND VARIOUS MATERIALS, IN AT LEAST ONE (1) STRATEGIC LOCATION IN EVERY PROVINCE TO ASSIST MSMES IN THE MANUFACTURING OF NEEDED ASSETS AND PRODUCTS. THE PRIORITY SHALL BE PROVINCES WITHOUT EXISTING FAB LABS.
"THE SSF-FAB LABS SHALL BE ATTACHED TO STATE UNIVERSITIES AND COLLEGES (SUCS); LOCAL UNIVERSITIES AND COLLEGES (LUCS); PRIVATE SCHOOLS, COLLEGES AND UNIVERSITIES; AND GOVERNMENT ACADEMIC TRAINING INSTITUTIONS OF THE PROVINCE AS DETERMINED BY DTI FOR PROPER MONITORING AND MAINTENANCE: PROVIDED, THAT IN GRANTING SSFS AND SSF-FAB LABS, THE DTI SHALL: "(A) TIMELY PROCESS THE APPLICATIONS FOR THE GRANTING OF SSFS AND SSF-FAB LABS IN COMPLIANCE WITH THE PROVISIONS OF REPUBLIC ACT NO. 11032 OR THE "EASE OF DOING BUSINESS AND EFFICIENT GOVERNMENT SERVICE DELIVERY ACT OF 2018" ON THE MAXIMUM PRESCRIBED PROCESSING TIME DEPENDING ON THE COMPLEXITY OF THE TRANSACTIONS: PROVIDED, THAT THE APPLICATION HAS MET ALL THE REQUIREMENTS INCLUDING AMONG OTHERS THE CONDUCT OF MARKET STUDY AND OTHER RECOMMENDATIONS THAT MAY BE IDENTIFIED BY THE NATIONAL TECHNICAL WORKING GROUP (NTWG); "B) CONSULT WITH THE COOPERATORS ON THE APPROPRIATE PROJECTS TO BE GRANTED TO THEM; "C) ENSURE THAT THE MACHINERY, EQUIPMENT AND TOOLS ARE PROPER, SUITABLE, USABLE, AND APT WITH THE CAPABILITIES AND REQUIREMENTS OF THE FACILITIES; "D) COORDINATE WITH SUCS AND LUCS WHERE THE SSF AND/OR SSF-FAB LABS ARE ESTABLISHED IN SETTING GUIDELINES FOR THE EQUITABLE UTILIZATION OF SAID FACILITIES AMONG USERS
WITHIN AND OUTSIDE THE EDUCATIONAL INSTITUTIONS; "E) CLOSELY COORDINATE AND IMMEDIATELY ASSIST THE COOPERATORS WITH THEIR ISSUES OR CONCERNS REGARDING THE IMPLEMENTATION OF THEIR PROJECTS; AND "F) PARTNER WITH OTHER GOVERNMENT AGENCIES, IF NEEDED, TO HELP ENSURE THE SUCCESS OF THE PROJECTS: PROVIDED, FURTHER, THAT THE DTI SHALL ENSURE THAT THE SSFS AND SSF-FAB LABS CREATED UNDER THIS ACT ARE CONSISTENT WITH THE NATIONAL INNOVATION AGENDA AND STRATEGY DOCUMENT. "SEC. 17. MONITORING OF PRODUCTIVITY OUTCOMES. - THE DTI, IN COORDINATION WITH THE CONCERNED COOPERATORS, LGUS, SUCS, LUCS, PRIVATE SCHOOLS, COLLEGES AND UNIVERSITIES, GOVERNMENT ACADEMIC TRAINING INSTITUTIONS IN WHICH THE SSFS AND THE SSF-FAB LABS ARE SITUATED, SHALL SUBMIT AN ANNUAL PROGRESS REPORT TO CONGRESS DETAILING THE EFFECTIVENESS AND/OR IMPACT OF THE SSFS AND SSF-FAB LABS WHICH SHALL INCLUDE THE BUDGET UTILIZATION OF THE PROJECT, ADDITIONAL JOBS AND INCOME GENERATED, INDUSTRY ENGAGEMENT, TECHNOLOGY TRANSFER, AND OVERALL GROWTH OF THE BUSINESSES WHICH AVAILED OF THE FACILITIES."
Sec. 2. Implementing Rules and Regulations. - Within three (3) months from
the effectivity of this Act, the DTI shall promulgate the necessary implementing rules and regulations for the institutionalization and establishment of the SSFs including the guidelines for the partnership with the cooperators, SUCs, LUCs, private schools,
1 colleges and universities, and government academic training institutions where the 2 SSFs and SSF-Fab labs will be established.
Sec. 3. Appropriations. - The amounts necessary to carry out the
implementation of this Act shall be charged against the current budget of DTI. 5 Thereafter, the funds necessary for the continuous implementation of this Act shall be 6 included in the annual General Appropriations Act (GAA).
Sec. 4. Separability Clause. - If any portion or provision of this Act is declared
unconstitutional, the remainder of this Act or any provision not affected thereby shall remain in full force and effect.
Sec. 5. Repealing Clause. - All laws or parts thereof, decrees, orders, rules and
regulations inconsistent with the provisions of this Act are hereby repealed or modified accordingly.
Sec. 6. Effectivity, - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation. Approved,