Online Small Enterprise Support Services Act

Sen!!! Difice of the set kurp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session FEB -5 P2:48 SENATE RECEIVED BY: 1755 S. No.. Introduced by Senator Camille A. Villar AN ACT PROVIDING SUPPORT SERVICES FOR SMALL ENTREPRENEURS IN ONLINE SPACES AND PROVIDING MECHANISMS FOR THEIR INTEGRATION INTO THE FORMAL ECONOMY EXPLANATORY NOTE During the pandemic, a lot of our countrymen, especially those belonging to the daily wage earners, lost their jobs. This situation, however, has given rise to "self- employed without any paid employee" entrepreneurs. These "self-employed without any paid employee" are people whose primary activity is self-employment and do not employ others. A number of these entrepreneurs are "online sellers" who use digital platforms and the internet in reaching their consumers. As of February 2024, the Philippine Labor Force Situation shows that the employment share of "self-employed without any paid employee" workers increased to 27.2% from 25.7% the previous month. This data does not include those who are "off-grid" or non-registered online businesses. The "self-employed without any paid employee" sector is a driving force of the economy and a tool in managing our employment rate. The objective of this bill is to provide support services to "small online enterprises" defined as duly-registered small businesses with annual sales not exceeding One Million Pesos (PhP1,000,000.00), and whose consumers access the enterprise's products or services primarily through online channels. This bill aims to: a) Provide adequate capital and credit access for individuals seeking to

operate small online enterprises; b) Facilitate the registration and operation of such enterprises, and streamline government support services relevant to their needs; c) Assist small online enterprises adapt to new trends and developments in the digital space; d) Assist existing businesses migrate to the online space; e) Provide adequate training on the various aspects of online entrepreneurship; and f) Encourage the creation of online enterprises among rural communities and provide farmers and fisherfolk with opportunities for higher income. This bill will incentivize and assist "small online enterprises" to register and formalize their businesses without over-burdening them with the usual bureaucratic, regulatory or tax requirements. In view of the foregoing considerations, the approval of this bill is humbly sought. Cumicacin CAMILLE A. VILLAR

TWENTIETH CONGRESS OF THE Offite of the See arg REPUBLIC OF THE PHILIPPINES First Regular Session 26 FEB -5 P2:49 SENATE RECEIVED BY: 1756 S. No. _ Introduced by Senator Camille A. Villar AN ACT PROVIDING SUPPORT SERVICES FOR SMALL ENTREPRENEURS IN ONLINE SPACES AND PROVIDING MECHANISMS FOR THEIR INTEGRATION INTO THE FORMAL ECONOMY 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 "Online Small Enterprise

2 Support Services Act".

Sec. 2. Objectives. - This Act acknowledges the efforts of Filipino workers to

find decent employment through online small entrepreneurial activities, and seeks to provide them with the support services they need to become formal, duly registered, 6 and taxpaying businesses that create dependable employment for their operators and 7 others, and generate value in their communities. Towards these ends, this Act aims to: a) Provide adequate capital and credit access for individuals seeking to operate small online enterprises; b) Facilitate the registration and operation of such enterprises, and streamline government support services relevant to their needs; c) Assist small online enterprises adapt to new trends and developments in the digital space; d) Assist existing businesses migrate to the online space; e) Provide adequate training on the various aspects of online entrepreneurship; and

f) Encourage the creation of online enterprises among rural communities and provide farmers and fisherfolk with opportunities for higher income.

Sec. 3. Small Online Enterprises. - For purposes of this Act, "small online

enterprises" shall refer to duly-registered small businesses with annual sales not 5 exceeding One Million Pesos (PhP1,000,000.00), and whose consumers access the enterprise's products or services primarily through online channels.

Sec. 4. Access to Capital. - The Landbank of the Philippines (LBP) and the

Development Bank of the Philippines (DBP) shall establish loan products for small online enterprises as defined in this Act, with interest rates which shall not exceed the lowest interest rate for an existing loan product with similar loan tenures offered by the said banks. LBP and DBP shall also establish, within their official websites, online facilities where loan applications may be initiated and evaluated for further action. LBP shall prioritize offering the loans pursuant to this Section to enterprises from rural areas and/or enterprises related to agriculture, fisheries, and forestry. The Department of Finance (DOF), in consultation with LBP and DBP, shall issue the rules and regulations necessary for the implementation of this Section within thirty (30) days upon the effectivity of this Act.

Sec. 5. Consolidation of Support Services. - The Department of Trade and

20 Industry (DTI) shall establish an online portal consolidating all available government support services for small online enterprises. Such services may include, but shall not 22 be limited to, loans from government financial institutions, regulatory relief and 23 extensions, technical training, product development services, marketing assistance, 24 and logistics support. The online portal shall be made publicly accessible within ninety (90) days upon 26 the effectivity of this Act. The DTI shall also establish an "Online Negosyo Center" within the portal, which shall be an information and assistance center dedicated to serving the needs of small online enterprises, and to assisting informal businesses and other interested individuals and businesses regularize into small online enterprises. The DTI shall assist government agencies offering services to small online enterprises in making these services accessible online. Government agencies shall, as

far as practicable, digitalize the processes involved in the provision of these support 2 services. The Department of Information and Communication Technology (DICT) shall provide the necessary assistance in digitalizing small online business support services. The Anti-Red Tape Authority (ARTA) shall ensure that such support services 5 abide by standards set under Republic Act No. 11032, or the Ease of Doing Business Law.

Sec. 6. Free Credit Rating and Appraisal. - The Credit Information Corporation

(CIC) shall provide, without fees or charges, small online enterprises under this Act with their credit report and credit score. As far as practicable, the CIC shall make the 10 application and processing of credit report and credit score requests pursuant to this Section accessible online. The Governance Commission for GOCCS (GCG) shall issue the rules and regulations necessary for the implementation of this Section within thirty (30) days upon the effectivity of this Act.

Sec. 7. Facilitated Regularization. - To encourage small online businesses to

register with the relevant tax and regulatory authorities, the ARTA shall compile an inventory and assessment of processes required for small online enterprises to be fully and duly registered businesses in the Philippines. The ARTA shall conduct an annual assessment and audit of the said processes, which shall be reflected in a report submitted to the President, the heads of relevant agencies, and the Congress. The said report shall assess the compliance of relevant agencies with Republic Act No. 9485, Republic Act No. 11032, and other laws and 23 regulations that aim to streamline frontline and client services of government 24 agencies. The report shall be submitted on or before the thirtieth day of June of every 25 year.

Sec. 8. Entrepreneurship Training. - The Technical Education and Skills

27 Development Authority (TESDA) shall offer practical training programs for small online enterprises, or for individuals seeking to establish small online enterprises. Training programs shall include, but shall not be limited to, supply chain management, 30 marketing, packaging, maintenance of online selling spaces, consumer relations, laws and regulations on online selling, and others.

TESDA programs whose objective is to encourage entrepreneurship shall also include modules on migrating enterprises online. As far as practicable, these training programs shall be made available online, and shall be displayed in the online portal created under Section 5 of this Act. Based on the demonstrated financial need of trainees, and on a competitive basis, the TESDA shall also offer online enterprise grants for successful completers of its online enterprise training programs. The funds necessary for the implementation of this paragraph shall be sourced annually from the General Appropriations Act. Priority for such grants shall be given to recently displaced workers or the unemployed seeking gainful employment. TESDA shall issue the rules and regulations necessary for the implementation of this Section within thirty (30) days upon the effectivity of 12 this Act.

Sec. 9. Online Migration Support services. - The Department of Information

and Communication Technology (DICT), in partnership with the DTI, shall provide support services to assist businesses migrate to the online space, and to support small online entrepreneurs in maintaining their online businesses. The DICT shall designate an office within its agency as the focal office for the delivery of these support services. Such services shall include assistance in obtaining affordable and reliable 19 internet connectivity, securing data privacy and safety of online channels, maintaining 20 digital inventories and ordering systems, securing online payment systems, and such other information and communication technology (ICT) related support services as the 22 DTI may request the DICT to help provide. The support services offered pursuant to this Section shall be made accessible in the online portal created under Section 5 of this Act. The funds necessary for the implementation of this paragraph shall be sourced annually from the General Appropriations Act, under a DICT program specifically intended for the purposes of this Section.

Sec. 10. Rural Online Small Enterprises. - The Department of Agriculture (DA)

shall provide support services to assist farmers and fisherfolk find direct market access in the online space and, whenever practicable, to duly register as enterprises. The DA shall also assist farmers and fisherfolk find partners or markets among the small online entrepreneurs benefiting from the support services provided under this Act. The DA

shall designate an office within its agency as the focal office for the delivery of these support services. The support services offered pursuant to this paragraph shall be made accessible in the online portal created under Section 5 of this Act. In fulfilment of its mandate "to develop special projects to promote innovative financing schemes for small farmers," under Republic Act No. 7607, the Agricultural 6 Credit Policy Council (ACPC) shall also create and develop a credit facility for farmers seeking to become small online entrepreneurs specializing in agricultural products. In addition to traditional application channels, the application for the credit facility created pursuant to this paragraph shall also be made accessible online and shall be displayed in the online portal created under Section 5 of this Act. The funds necessary for the implementation of this Section shall be sourced annually from the General Appropriations Act. The DA shall issue the rules and regulations necessary for the implementation of this Section within ninety (90) days upon the effectivity of this Act.

Sec. 11. Oversight Committee. - The Chairs of House Committee on Micro,

Small and Medium Enterprise Development and the Senate Committee on Trade, Commerce and Entrepreneurship, with five (5) members from each committee, shall jointly convene as the Congressional Oversight Committee on Small Online Entrepreneurs within six (6) months upon the effectivity of this Act to hear updates 20 on the drafting and issuance of rules and regulations mandated under this Act. 21 Thereafter, the Oversight Committee shall convene at least once annually.

Sec. 12. Separability Clause. - If any portion or provision of this Act is declared

unconstitutional or invalid, the remainder of this Act or any provisions hereof not affected thereby shall continue to be in force and effect.

Sec. 13. Repealing Clause. -Any law, presidential decree or issuance, executive

order, letter of instruction, rule or regulation inconsistent or contrary to the provision of this Act is hereby repealed or modified accordingly.

Sec. 14. Effectivity Clause. - This Act shall take effect after fifteen (15) days

following its publication in the Official Gazette or a newspaper of general circulation. Approved,