Senaic Office of the Sentictarp TWENTIETH CONGRESS OF THE 25 NOV 18 P6:01 REPUBLIC OF THE PHILIPPINES ) First Regular Session RECEIVED BY: SENATE 1539 Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT PROMOTING ENTREPRENEURSHIP BY ESTABLISHING A SUSTAINABLE FINANCING PROGRAM FOR MICRO ENTERPRISES THROUGH THE PONDO SA PAGBABAGO AT PAG-ASENSO PROGRAM AND APPROPRIATING FUNDS THEREFOR EXPLANATORY NOTE Of the 1,246,373 business enterprises operating in the country in 2023, 99.63% are micro, small and medium enterprises (MSMEs). Of these, 1,127,058 or 90.43% of total establishments are micro enterprises. In the same year, MSMEs generated 6.35 million jobs, with micro enterprises accounting for the largest share, contributing 33.95% to the country's total employment. 1 Even with its vast potential to drive job creation and reduce poverty and inequality, the sector still faces a myriad of issues including low productivity, slow growth, and unstable operations.? According to the World Bank, limited access to finance is a major issue that hinders the sector's development, being the second most cited obstacle to grow small businesses in emerging markets and developing countries.3 To assist micro enterprises by providing an alternative and accessible source of financing, the Department of Trade and Industry (DTI), through its financing arm the Small Business Corporation (SB Corp.), launched the Pondo sa Pagbabago at Pag- asenso (P3) Program in 2017. The program provides accessible and cheap loans with DTI. 2023 Philippine MSME Statistics. Available at https://www.dti.gov.ph/resources/msme-statistics/. Accessed on 30 June 2025. 2 Raquiza, M. V. R. (n.d.). Micro, small, and medium enterprise (MSME) sector financing: Issues and Challenges. UP CIDS Discussion Paper Series 2021-1. Available at https://cids.up.edu.ph/wp-content/uploads/2022/02/UP- CIDS-Discussion-Paper-2021-01.pdf. Accessed on 30 June 2025. World Bank. Small and Medium Enterprises (SME) Finance. Available at https://www.worldbank.org/en/topic/smefinance. Accessed on 30 June 2025.
minimal requirements to micro enterprises to boost the sector and stabilize informal lending, known to many as 5-6 lending. As of 2024, it has already assisted approximately 81,000 MSMEs, with at least P6.73 billion total amount of loans disbursed.* Under the 2025 annual budget, the program has a budget of P500 million. To ensure the availability and accessibility of microfinancing to millions of micro entrepreneurs, such as market vendors, sari-sari store owners, and stall owners, this measure aims to institutionalize the P3 Program. By supporting the country's largest group of MSMEs and helping them scale up into larger enterprises, this bill will contribute to strengthening and promoting the growth of the sector, creating more jobs, increasing income opportunities, and ultimately, reducing poverty nationwide. In view of the foregoing, the passage of this bill is earnestly sought. JOEL, VILLANUEVA q DTI Annual at https://dtiwebfiles.s3.ap-southeast-1.amazonaws.com/e- ibrary/Main #Publications/Annual + Report/D TI+ Annual + Report +2024-paf. Accessed on 30 June 2025
Spitaie Offire of the Secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES NOV 18 P6:01 First Regular Session RECEIVED BY: SENATE 1539 Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT PROMOTING ENTREPRENEURSHIP BY ESTABLISHING A SUSTAINABLE FINANCING PROGRAM FOR MICRO ENTERPRISES THROUGH THE PONDO SA PAGBABAGO AT PAG-ASENSO PROGRAM AND APPROPRIATING FUNDS THEREFOR Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the "Pondo sa Pagbabago
at Pag-asenso (P3) Act."
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State
to promote comprehensive national development and free the Filipino people from poverty by supporting micro enterprises that facilitate local job creation, production, 6 and trade in the country. Towards this end, the State shall encourage entrepreneurial 7 activities and develop programs, activities, and projects aimed at helping micro enterprises, particularly on access to financing.
SEC. 3. Objectives. - The objectives of this Act are as follows:
(a) To provide an affordable, accessible, and simple microfinancing program for the country's micro enterprises; (b) To provide a better alternative to the informal lenders or the so-called "5-6" money lending system availed of by micro enterprises; and (c) To bring down the interest rate at which micro finance is made available to micro enterprises.
SEC. 4. Creation of the Pondo sa Pagbabago at Pag-asenso (P3) Fund.
2 - There is hereby created the Pondo sa Pagbabago at Pag-asenso Fund, hereinafter referred to as the "P3 Fund," which shall be made available to qualified micro enterprises under such terms and conditions that will meet the purpose of this Act. The beneficiaries of the P3 Fund shall be micro enterprises as defined under 6 Republic Act No. 6977, otherwise known as the Magna Carta for Micro, Small and 7 Medium Enterprises (MSMEs), as amended.
SEC. 5. Lead Implementing Agency. - The Small Business Corporation (SB
9 Corp.), the financing arm of the Department of Trade and Industry (DTI), shall be the lead implementing agency of this Act. The SB Corp. shall handle the fund delivery to micro enterprises through the following modes: (a) Direct lending; and (b) Lending through accredited partner financial institutions (PFIs). Accredited PFIs shall be limited to rural banks, cooperatives, micro financing institutions, or lending companies duly licensed to lend by the Bangko Sentral ng Pilipinas (BSP), Cooperative Development Authority (CDA), or the Securities and Exchange Commission (SEC), as may be required by law. To support the administrative and operating expenses of the SB Corp., an amount not more than five percent (5%) of the total loans disbursed shall be provided annually to the SB Corp., to be sourced from the General Appropriations Act (GAA).
SEC. 6. Features of the P3 Fund. - The P3 Fund shall have the following
features: (a) The interest rate to be imposed on the loan availed of by the P3 Fund beneficiaries shall not exceed two percent (2%) per month; (b) The interest earnings shall accrue to the P3 Fund; (c) There shall be no collateral requirement from the P3 Fund beneficiaries; and (d) The total loanable amount from the P3 Fund shall be set and regularly reviewed by the Micro, Small and Medium Enterprises Development (MSMED) Council.
SEC. 7. Policy Oversight Function. - The MSMED Council shall monitor the
utilization and disbursement of the P3 Fund. It shall submit to the President of the Philippines and to Congress, through the Committee on Trade, Commerce and
1 Entrepreneurship of the Senate and the Committee on Trade and Industry of the House of Representatives, an annual report on the status of the P3 Fund.
SEC. 8. Role of the Department of Labor and Employment (DOLE). - The
DOLE shall engage in labor market interventions that shall provide adequate protection and enable the transition of workers in micro enterprises to formal work 6 arrangements. It shall also ensure timely and immediate action on job generation and 7 other labor concerns in the MSME sector.
SEC. 9. Appropriations. - The amount necessary to carry out the provisions
9 of this Act shall be charged against the appropriations released for the purpose under the GAA for the SB Corp. Thereafter, such sums as may be necessary for the continued implementation of this Act shall be included in the annual GAA.
SEC. 10. Implementing Rules and Regulations. - Within sixty (60) days
from the approval of this Act, the SB Corp. and the DTI, in consultation with relevant government agencies and other stakeholders, shall promulgate the implementing rules and regulations (IRR) to implement the provisions of this Act. Failure of the relevant government agencies to promulgate the IRR within the specified period shall subject the heads of these government agencies to administrative penalties under applicable civil service laws. Should the IRR contain provisions that are contrary to this Act, the heads of the government agencies responsible for such provision, when done in bad faith or with gross negligence, shall be held administratively liable.
SEC. 11. Separability Clause. - If any portion or provision of this Act is
declared unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.
SEC. 12. Repealing Clause. - Any law, presidential decree or issuance,
executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.
SEC. 13. Effectivity. - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in a newspaper of general circulation. Approved,