Pondo Sa Pagbabago at Pag-asenso (P3) Act of 2026
Filed on February 10, 2026, and referred to the Committees on Trade, Commerce and Entrepreneurship; Economic Affairs; and Finance; it has been pending in committee since April 30, 2026, with no recorded action since then.
The bill addresses the financial challenges faced by micro and small enterprises, which are crucial for local economies.
The bill responds to the urgent need for accessible financing for MSEs, especially in the wake of economic challenges.
Pondo Sa Pagbabago at Pag-asenso (P3) Act of 2026
The Pondo sa Pagbabago at Pag-asenso (P3) Act of 2026 aims to promote entrepreneurship by establishing a financing program for micro and small enterprises (MSEs) in the Philippines, providing accessible loans and cash assistance, and offering capacity-building support.
Compared with current law:
MSEs face high interest rates and lack of access to formal financing.
The P3 Program will provide loans with a maximum interest rate of 1% per month and no collateral requirements.
MSEs often rely on informal lenders with exorbitant rates.
The P3 Program aims to provide a better alternative to informal lending.
MSEs may struggle to recover from disasters without financial support.
The P3 Program includes cash assistance to support business recovery after disasters.
The P3 Act is a proposed law that aims to promote entrepreneurship by providing a financing program for micro and small enterprises (MSEs) in the Philippines, offering loans, cash assistance, and capacity-building support.
Source · full text✦ Dashed tags are AI-suggested nuance; solid tags follow the committee taxonomy.
Stalled: the bill has been pending in committee for over five months with no action since the last technical working group meeting on April 30, 2026.
No floor deliberations yet — this measure has not reached plenary. Its committee-stage actions appear under Legislative history above.
Senatc TWENTIETH CONGRESS OF THE ) Office of the Secretaup REPUBLIC OF THE PHILIPPINES ) FEB 10 P4:42 First Regular Session RECEIVED BY: SENATE Senate Bill No. 1832 Introduced by Senator Erwin T. Tulfo AN ACT PROMOTING ENTREPRENEURSHIP BY INSTITUTIONALIZING A FINANCING PROGRAM FOR MICRO AND SMALL ENTERPRISES THROUGH THE PONDO SA PAGBABAGO AT PAG-ASENSO PROGRAM AND APPROPRIATING FUNDS THEREFOR EXPLANATORY NOTE The strength of the Philippine economy does not lie solely in its large corporations but in the millions of small-scale entrepreneurs who operate in every barangay across the archipelago. Known as the "backbone" of our national development, Micro, Small, and Medium Enterprises (MSMEs) represent a staggering 99.63% of all registered business establishments in the country contributing to 65.1% to employment.' Despite their critical role in poverty alleviation and inclusive growth, many micro-entrepreneurs are excluded from formal banking due to high interest rates and a lack of collateral. Consequently, they are often driven into the arms of informal lenders and predatory "5-6" money-lending systems that charge exorbitant rates, trapping small businesses in a cycle of debt. 1 Barcia, Rhaydz, "MSMEs backbone of PH economy - DTI", July 13, 2025, retrieved from: https://www.manilatimes.net/2025/07/13/regions/msmes-backbone-of-ph-economy-dti/2148208, retrieved on January 23, 2026.
The proposed Pondo sa Pagbabago at Pag-asenso (P3) Act seeks to institutionalize a sustainable solution to this financial exclusion. Key features of this measure include the removal of collateral requirements and the capping of interest rates at 1% per month for direct lending, ensuring that capital remains within reach of those in underserved and poorest populations. Furthermore, the bill introduces a Cash Assistance component ranging from P5,000 to P50,000 to support capital needs and business recovery following disasters. To ensure these funds lead to long-term success, a mandatory capacity building component will provide free technical support in areas such as quality control, marketing, and financial literacy. In view of the foregoing, the immediate passage of this bill is earnestly sought. ERWIN T. TULFO
Senate Office of the Ecretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session FEB 10 P4:42 RECEIVED BY: SENATE Senate Bill No._ 1832 Introduced by Senator Erwin T. Tulfo AN ACT PROMOTING ENTREPRENEURSHIP BY INSTITUTIONALIZING A FINANCING PROGRAM FOR MICRO AND SMALL ENTERPRISES THROUGH THE PONDO SA PAGBABAGO AT PAG-ASENSO PROGRAM AND APPROPRIATING FUNDS THEREFOR Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
SECTION 1. Short Title. - This Act shall be known as "Pondo
sa Pagbabago at Pag-asenso (P3) Act of 2026."
SEC. 2. Declaration of Policy. - It is the declared policy of the
State to foster comprehensive national development and inclusive growth and reduce poverty by promoting the growth of Micro and Small Enterprises (MSEs) which facilitate local job creation, production, and trade in the country. Towards this end, the State shall develop policies, plans, and programs, and initiate means to encourage entrepreneurial activities and ease the constraints and challenges of MSEs, particularly on access to financing.
SEC. 3. Objectives. - The objectives of this Act are:
a) Provide an affordable, accessible, sustainable, and simple financing program for the country's MSEs, especially those in the poorest populations and underserved areas and industries; b) Provide a better alternative to informal lenders or the so-called "5-6" money lending system availed of by MSEs; c) Reduce the interest rate at which financial services are made available to MSEs; d) Encourage the development of entrepreneurship and the Micro, Small and Medium Enterprise (MSME) sector, particularly MSEs; e) Support successful business recovery of MSEs following natural or man-made disasters; and f) Provide cash, technical, and administrative assistance to qualified MSEs.
SEC. 4. Pondo sa Pagbabago at Pag-asenso (P3) Program. -
The Pondo sa Pagbabago at Pag-asenso Program, hereinafter referred to as the "P3 Program", shall assist MSEs in the form of: a) Microfinance or credit; b) Cash assistance; and c) Capacity building. Qualified end-borrowers of the P3 Program shall be MSEs as defined in Republic Act No. 6977, as amended, or the "Magna Carta for Micro, Small, and Medium Enterprises." The P3 Program shall be accessible through the Small Business Corporation (SBCorp.) and through accredited Partner Financial Institutions (PFIs) such as rural banks, thrift banks, cooperatives with a license to lend, microfinance non-government organizations, or lending companies.
SEC. 5. Lead Implementing Agency. - The SBCorp., as the
financing arm of the Department of Trade and Industry (DTI), shall be the lead implementing agency of the P3 Program. The SBCorp. shall handle all fund deliveries to MSEs through the following modes: a) Direct lending. The SBCorp shall prioritize underserved or unserved areas and industries, or those not adequately and effectively served by PFIs, including provinces where poverty incidence remains high based on official poverty statistics from the Philippine Statistics Authority (PSA); and b) Lending through accredited PFIs. The SBCorp may allocate up to five percent (5%) of the total loans disbursed for the period, sourced from the accumulated funding for the P3 Program to cover its annual administrative and operating expenses which shall include the salaries of regular Plantilla personnel involved in the implementation of the P3 Program.
SEC. 6. Microfinance or Credit Component of the P3 Program.
- The SBCorp. and PFIs shall be guided by the following principles in the implementation of the Microfinance or Credit Component of the P3 program: a) The loanable amount ceiling for individual loans shall be set initially at Two million pesos (Php2,000,000.00) for direct lending and Three hundred thousand pesos (Php300,000.00) for lending through accredited PFIs which are regularly reviewed by the Micro, Small and Medium Enterprise Development (MSMED) Council; b) The interest rate shall not exceed one percent (1%) per month for direct lending, and shall not exceed two and a half percent (2.5%) per month for lending through accredited PFIs; c) There shall be no collateral requirement from the P3 Fund borrowers; d) The lenders shall have a collection mechanism, whereby payments are made on a daily, weekly, or monthly basis,
depending on the business income cycle. It shall be the duty of the lender to collect the loan principal and the interest payment from the borrower; and e) Financial technology-enabled systems and processes shall be utilized in the implementation of the P3 Program. Disbursements shall use digital forms of payment for both the disbursement of loan proceeds by the lenders, and the recurring loan payments by the borrowers.
SEC. 7. Cash Assistance and Capacity Building Components of
the P3 Program. - The SBCorp., in consultation with the DTI's Bureau of Micro, Small, and Medium Enterprise Development (BMSMED), National Anti-Poverty Commission (NAPC), and the Bangko Sentral ng Pilipinas (BSP), shall develop a cash assistance program exclusively for MSEs in need of capital. The SBCorp shall provide MSEs under the Capacity Building Component with free technical and administrative support, including but not limited to, product development, skills and leadership training, packaging and design, quality control, market promotion, client or supplier matching, and cash literacy and planning. The SBCorp. shall be guided by the following principles in the implementation of the Cash Assistance and Capacity Building Components of the P3 program: a) The assistance shall be extended only to beneficiaries who have satisfied the requirements under this Act; b) Each cash assistance shall range from Five thousand pesos (Php5,000.00) to Fifty thousand pesos (Php50,000.00), depending on the number of employees, number of years in business, financial hardship, and such other criteria as may be determined by SBCorp. The SBCorp. is hereby authorized to adjust these amounts to meet present market demands after the mandatory review provided in this Act; c) Priority shall be given to MSEs classified under the priority business areas of their respective regions, particularly the
public market vendors to strengthen their financial capabilities and improve public services; and d) There shall be a mandatory review of the Cash Assistance and Capacity Building Components of the P3 program every three (3) years to ensure that they meet-the present market demands.
SEC. 8. Eligibility for P3 Program. - The applicants must
comply with the following eligibility requirements: a) Must be an owner of a registered MSE who is at least eighteen (18) years old; b) For the microfinance or credit, must have no unresolved negative credit findings or past due accounts with the SBCorp, or other formal financial institutions at the time of application; c) For the cash assistance, must not have availed of other cash assistance from other government programs regardless of the number of businesses owned; d) Must be a member in good standing of a duly registered cooperative or association, or a resident of the local government unit (LGU), from which the member intends to avail of the cash assistance; e) Must accomplish the Business Action Plan form provided by the SBCorp. or feasibility study; f) Must attend a DTI-accredited livelihood seminar, as evidenced by a certificate of participation; and g) Must be willing to state under oath the facts establishing the foregoing.
SEC. 9. Registry of MSEs. - The DTI shall create a registry of all
MSMEs per region based on their size category (i.e., micro, small and medium) and business area (i.e., agriculture, livestock, fisheries, food processing, fabric and clothing, eco-tourism activities, pottery and handicrafts, furniture and hardwood, information and technology, etc.).
SEC. 10. Policy Oversight Function. - The MSMED Council
shall monitor the implementation of the P3 Program and shall submit an annual report to the President of the Philippines and to Congress,
through the Congressional Oversight Committee on Micro, Small and 2 Medium Enterprise Development (COC MSMED) Council.
SEC. 11. Appropriations. - The initial amount for the
implementation of this Act shall be charged against the current year's appropriations of the SB Corp. Thereafter, such amount necessary shall be included in the annual General Appropriations Act.
SEC. 12. Implementing Rules and Regulations. - Within sixty
(60) days from the approval of this Act, the DTI shall formulate and promulgate rules and regulations necessary for its implementation.
SEC. 13. Separability Clause. - Should any provision or part of
this Act be declared unconstitutional or invalid, the other provisions and parts hereof, insofar as they are separable from the invalid ones, shall remain in full force and effect.
SEC. 14. Repealing Clause. - All laws, presidential decrees,
executive orders, letters of instruction, proclamations or administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.
SEC. 15. 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,
Reproduced from the Senate document. The official PDF is the authoritative version.