Pondo Sa Pagbabago at Pag-asenso (P3) Act
Filed on July 14, 2025, and referred to the Committees on Trade, Commerce and Entrepreneurship; Economic Affairs; and Finance; it has been pending in committee since March 10, 2026, with no recorded action since then.
The bill addresses the financing needs of micro enterprises, which are crucial for local economic development.
The bill responds to the ongoing challenges faced by micro enterprises in accessing affordable financing.
Pondo Sa Pagbabago at Pag-asenso (P3) Act
The Pondo sa Pagbabago at Pag-asenso (P3) Act aims to establish a socialized micro financing program for micro enterprises, promoting entrepreneurship by providing affordable loans and assistance to micro and small enterprises (MSEs).
Compared with current law:
Micro enterprises face high interest rates from informal lenders.
The P3 Act will provide loans at a maximum interest rate of 1% per month for direct lending and 2.5% for lending through PFIs.
Access to financing is limited for many micro enterprises.
The P3 Act will create a structured program to provide affordable loans and cash assistance.
Micro enterprises often lack technical support.
The P3 Act includes capacity building components to offer free technical and administrative support.
The P3 Act aims to provide a socialized micro financing program for micro enterprises, promoting entrepreneurship by offering affordable loans and assistance to micro and small enterprises.
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 six months since the last joint committee meetings on March 10, 2026, with no further action recorded.
No floor deliberations yet — this measure has not reached plenary. Its committee-stage actions appear under Legislative history above.
- Gide of ica TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES P4:15 25 JUL 14 First Regular Session SENATE RECEWED sU S. No. _ Introduced by SENATOR MARK A. VILLAR PROVIDING A SOCTALIZED MICRO FINANCING PROGRAM FOR MICRO ENTERPRISES, THEREBY PROMOTING ENTREPRENEURSHIP EXPLANATORY NOTE The Pondo sa Pagbabago at Pag-asenso (P3) Program of the Department of Trade and Industry (DTI) is a landmark government initiative that provides an alternative source of cheap and convenient microloans, where micro-entrepreneurs like market vendors, sari-sari store owners, and stall owners can avail of loans of varying amounts depending on their size and ability to pay. The P3 Program seeks to address and eliminate informal lending, locally known as "5-6 lending". These lenders typically charge exorbitant interest rates and monitor payments more frequently than formal financing and credit programs. Despite the drawbacks, small businesses prefer borrowing from informal lenders due to high collateral and voluminous documentary requirements of formal lending institutions. Thus, the P3 Program protects micro-entrepreneurs from usurious lenders. At present, there remains a need to institutionalize the P3 Program so that the thrust in providing cheaper and more convenient financing to microenterprises may be maintained. In view of the foregoing, the approval of this bill is earnestly sought. MARK A. VILLAR ROC
Car ofte TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) JUL 14 P4:15 First Regular Session SENATE RECEIVEN OY. S. No.. Introduced by Senator MARK A. VILLAR AN ACT PROVIDING A SOCIALIZED MICRO FINANCING PROGRAM FOR MICRO ENTERPRISES, THEREBY PROMOTING ENTREPRENEURSHIP 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 Act" or the "P3 Act".
Sec. 2. Declaration of Policy. - It is the declared policy of the State to foster
4 comprehensive national development and inclusive growth and reduce poverty by promoting the growth of Micro and Small Enterprises (MSEs), which facilitate local job 6 creation, production, and trade in the country. Towards this end, the State shall 7 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 2 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) Fund. - 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 defined in Republic 11 24 Act No. 6977, as amended, or the "Magna Carta for Micro, Small, and Medium 12 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- governmental organizations, or lending companies.
Sec. 5. Microfinance or Credit Component of the P3 Program. - The SBCorp
18 and PFis shall be guided by the following principles in the implementation of the 19 Microfinance or Credit Component of the P3 program: (a) The loanable amount ceiling for individual loans shall be set initially at 21 Two million pesos (Php2,000,000.00) for direct lending and Three hundred thousand 22 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 2 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. 6. Leading Implementing Agency. - The Small Business Corporation
(SBCorp), as the financing arm of the Department of Trade and Industry (DTI), shall be the lead implementing agency for the Fund. The SBC shall manage the delivery of proceeds from the Fund to its beneficiaries through either: (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 SCorp 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. 7. Cash Assistance and capacity Building Components of the P3 Program.
19 - 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
1 employees, number of years in business, financial hardship, and such other criteria as 2 may be determined by SBCorp. The SCorp is hereby authorized to adjust these 3 amounts to meet present market demand after the mandatory review provided in this 4 Act; (c) Priority shall be given to MSEs classified under the priority business areas 6 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 Cash Assistance. - The applicants of the Cash Assistance
must comply with the following eligibility requirements: (a) Must be an owner of a registered MSE who is at least eighteen (18) years old; Must not have availed of the cash assistance regardless of the number b) of businesses owned; (c) 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; (d) The institution shall have a mechanism whereby cash assistance is made on a weekly or monthly basis (e) Must submit a comprehensive feasibility study of the business proposal; (f) Must attend a DTl-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
1 of the Philippines and to Congress, through the Congressional Oversight Committee 2 on Micro, Small, and Medium Enterprise Development (COC MSMED) Council.
Sec. 11. Appropriations. - The total amount of One hundred billion pesos
4 (Php100,000,000,000.00), for the next two (2) years, upon effectivity of this Act, or Fifty billion pesos (Php50,000,000,000.00) per year for the next two (2) years upon 6 effectivity of this Act shall be appropriated for the initial implementation of the P3 Program for microfinance, cash assistance, and capacity building program. Thereafter, 8 such sums as may be necessary shall be included in the annual General Appropriations 9 Act. In addition, the amount of Five hundred million pesos (Php500,000,000.00) is hereby appropriated as a special development fund to support the initial implementation of this Act. The funds shall be held in trust by the DTI in collaboration with the Development Bank of the Philippines (DBP), the Land Bank of the Philippines (LBP), and other government financial institutions.
Sec. 12. Implementing Rules and Regulations. - Within ninety (90) days from
the approval of this Act, the DTI shall formulate and promulgate the necessary rules and regulations to implement the provisions of this Act.
Sec. 13. Separability Clause. - If any provision of this Act is declared
unconstitutional, the remainder thereof not otherwise affected shall remain in full force and effect.
Sec. 14. Repealing Clause. - All laws, executive orders, rules and regulations,
or parts thereof inconsistent with any provision hereof are hereby repealed or modified accordingly
Sec. 15. Effectivity. - This Act shall take effect after fifteen (15) days from its
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.