Institutionalizing the Shared Service Facilities Project for MSMES

Benaie Office of the Sceretary TWENTIETH CONGRESS OF THE ) 26 FEB -5 P3:48 REPUBLIC OF THE PHILIPPINES First Regular Session SENATE RECEIVED BY: Senate Bill No. 1777 INTRODUCED BY SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO 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 Micro, Small, and Medium Enterprises (MSMEs) serve as the backbone of the Philippine economy, accounting for the majority of businesses and providing substantial employment opportunities across various sectors. Despite their vital role in national development, many MSMEs continue to face challenges that limit their competitiveness, particularly in access to modern technology, efficient production facilities, and innovative processes. To address these constraints and strengthen the productivity of MSMEs, the Department of Trade and Industry (DTI) implemented the Shared Service Facilities (SSF) Program, a strategic initiative that provides MSMEs access to common service facilities equipped with advanced tools, machinery, and technology. These facilities enable enterprises to improve product quality, increase production efficiency, and comply with market standards both locally and internationally.

This proposed measure seeks to institutionalize the Shared Service Facilities (SSF) Program to ensure its continuity, sustainability, and expansion across the country. By establishing SSFs as a permanent government program, MSMEs can benefit from a consistent and well-supported platform for innovation, skills development, and technological upgrading. The institutionalization of the SSF Program aims to close the gaps in the production value chain by creating common service centers that cater to the specific needs of industries and local communities. These facilities will enhance collaboration among MSMES, cooperatives, and local producers, promoting efficiency and reducing the duplication of costs and efforts. Moreover, the measure underscores the importance of fostering innovation and value addition among MSMEs. Through access to better equipment and production technologies, enterprises will be empowered to develop sophisticated and diverse products and services, thereby strengthening their competitiveness in both domestic and global markets. The bill also envisions stronger partnerships between national government agencies, local government units, academic institutions, and private sector organizations to ensure the effective implementation and sustainability of SSF projects. Such cooperation is vital in creating an enabling environment for MSMEs to grow and contribute to inclusive economic progress. In view of the foregoing, the immediate passage of this measure is earnestly sought. SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO

Senate Office of the Greetary TWENTIETH CONGRESS OF THE 26 FEB -5 P3:48 REPUBLIC OF THE PHILIPPINES ) First Regular Session ) RECEIVED BY: SENATE Senate Bill No. 1777 INTRODUCED BY SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO 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 the succeeding sections shall be re-numbered 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 SSS 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, AND 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, colleges 9 and universities, and government academic training institutions where the 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. Thereafter, the funds necessary for the continuous implementation of this Act shall be included in the annual 15 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,