Poverty Reduction Through Social Entrepreneurship (Present) Act

Senate Office of the socactary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -4 P1:11 SENATE RECEIVED B S. No._ Introduced by Senator Loren Legarda AN ACT INSTITUTIONALIZING THE POVERTY REDUCTION THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM, PROMOTING SOCIAL ENTERPRISES WITH THE POOR AS PRIMARY STAKEHOLDERS, AND STRENGTHENING SUPPORT SYSTEMS FOR SOCIAL IMPACT ECONOMIES EXPLANATORY NOTE Social enterprises are a growing global force for inclusive and sustainable development. These mission-driven organizations combine entrepreneurial discipline with a social purpose engaging the poor not as passive beneficiaries but as active stakeholders in wealth creation and community transformation. In the Philippine context, social enterprises have long operated at the grassroots, often filling gaps left by traditional business and state interventions, particularly in agriculture, artisanal trades, informal work, and disaster-affected communities. According to a study by the British Council and Philippine Social Enterprise Network, there are an estimated 164,000 social enterprises across the country, many of which remain under-supported by current legal and institutional frameworks. While the government provides various forms of assistance to micro, small, and medium enterprises (MSMEs), these programs are not specifically designed to address the dual challenges faced by social enterprises: achieving commercial viability while fulfilling a measurable social mission. This bill seeks to institutionalize the Poverty Reduction through Social Entrepreneurship (PRESENT) Program as a flagship national strategy to harness the potential of social enterprises for inclusive growth, poverty reduction, and resilience building. It recognizes social enterprises that reinvest a majority of their profits toward

improving the lives of marginalized groups-including farmers, fisherfolk, women, persons with disabilities, indigenous peoples, and informal workers. Among the key features of this bill are: • The creation of a National Social Enterprise Registry, and the accreditation of Certified SEs based on clear impact thresholds and annual reporting requirements; • A dedicated Social Enterprise Development Fund (SEDF) to provide grants, financing, guarantees, and ecosystem-building support; • Mandatory credit windows in government financial institutions and a guarantee facility managed by the Small Business Corporation (SB Corp.) to de-risk social enterprise lending; • Preferential access to government procurement, particularly for SEs producing goods or delivering services aligned with public needs; • The integration of social entrepreneurship education in curricula at all levels through DepEd, CHED, and TESDA; • The recognition and prioritization of women-led SEs and those supporting the formalization of informal workers; • Alignment with the Sustainable Development Goals (SDGs), the Nationally Determined Contributions (NDCs) under the Paris Agreement, and the gender equity mandates of the Magna Carta of Women. This version builds on earlier legislative proposals and stakeholder drafts but introduces improvements to strengthen institutional alignment, monitoring and evaluation, and fiscal feasibility. It simplifies governance by assigning leadership to the Department of Trade and Industry (DTI), in coordination with the National Anti-Poverty Commission (NAPC), and avoids unnecessary duplication by leveraging existing MSME structures and oversight mechanisms. By enacting this measure, we put in place a durable policy framework that recognizes the transformative role of social enterprises in building a just economy-one that puts the poor at the center of development, not at the margins. In view of the foregoing, the urgent passage of this bill is sought. LOREN LEGARDA

Seante an Office of the e. etary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) 25 AUG -4 P1:11 First Regular Session RECER/ED BY SENATE S. No. 789 Introduced by Senator Loren Legarda AN ACT INSTITUTIONALIZING THE POVERTY REDUCTION THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM, PROMOTING SOCIAL ENTERPRISES WITH THE POOR AS PRIMARY STAKEHOLDERS, AND STRENGTHENING SUPPORT SYSTEMS FOR SOCIAL IMPACT ECONOMIES 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 "Poverty Reduction

2 through Social Entrepreneurship (PRESENT) Act."

Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to

4 promote a just, inclusive, and sustainable economic system that empowers the poor 5 and marginalized to become productive contributors to national development. The State recognizes the role of social enterprises as mission-driven organizations that 7 pursue economic activities primarily to uplift the conditions of disadvantaged groups 8 by engaging them as workers, suppliers, owners, or clients and reinvesting the 9 majority of their profits to further their social mission. To this end, the State shall: a) Create an enabling environment that supports the development, growth, and sustainability of social enterprises; b) Facilitate the integration of social enterprises into government poverty reduction and local economic development plans; c) Ensure access to finance, markets, technology, and capacity-building for social enterprises;

d) Promote inclusive, equitable, and environmentally sustainable business models; e) Encourage innovation in addressing systemic social problems through entrepreneurship; f) Rationalize and align support mechanisms from government agencies to avoid fragmentation and duplication of poverty reduction programs; g) Promote the rights of women and marginalized sectors by advancing gender equality, social equity, and environmental justice through enterprise-based solutions.

Sec. 3. Definition of Terms. - For purposes of this Act:

a) "Social Enterprise (SE)" refers to any legally registered organization, regardless of form, that pursues a primary mission of addressing poverty or social exclusion through economic activity, and reinvests at least sixty percent (60%) of its net profits into programs that benefit the poor and marginalized. Such entities must demonstrate active engagement of the poor as workers, suppliers, owners, or beneficiaries. b) "Certified SE" refers to a social enterprise that has been accredited by the Department of Trade and Industry (DTI) upon satisfying defined impact and operational criteria, and is duly registered in the National Social Enterprise Registry. c) "Marginalized Sectors" refer to groups identified in Republic Act No. 8425 (Social Reform and Poverty Alleviation Act) and Republic Act No. 9710 (Magna Carta of Women), including but not limited to: farmers, fisherfolk, women, informal workers, persons with disabilities, indigenous peoples, senior citizens, urban poor, and disaster-affected populations. d) "Social Enterprise Resource Institutions (SERI)" refer to academic institutions, non-governmental organizations, cooperatives, or enterprises that provide support services-such as training, research, market development, or technology transfer-to social enterprises.

e) "Social Enterprise Development Fund (SEDF)" refers to the fund established under this Act to support grants, financing, insurance, and ecosystem-building activities for social enterprises.

Sec. 4. PRESENT Program. - The Poverty Reduction through Social

5 Entrepreneurship (PRESENT) Program is hereby institutionalized as a flagship program 6 of the government to support the emergence and scaling up of social enterprises 7 across the country. The DTI, through its Bureau of Micro, Small and Medium Enterprise 8 (MSME) Development, and in coordination with the National Anti-Poverty Commission 9 (NAPC), shall serve as the lead implementing agency. The PRESENT Program shall: a) Identify and support social enterprises operating in strategic economic subsectors with high potential for inclusive growth; b) Provide access to business development services, technical assistance, market linkages, and digital transformation; c) Integrate social enterprises into national and local development planning, including Local Development Investment Plans; d) Promote inclusive and sustainable value chains that enhance the participation and benefit of the poor and marginalized; e) Recognize the role of social enterprises in achieving the Sustainable Development Goals, particularly zero poverty, gender equality, decent work, reduced inequalities, and responsible consumption and production; f) Strengthen the resilience and preparedness of social enterprises for disaster risk reduction, climate change adaptation, and recovery from crises or shocks, including pandemics.

Sec. 5. Accreditation and Registry. - The DTI shall establish and maintain a

National Social Enterprise Registry. Only Certified SEs listed in this registry shall be eligible to access the benefits and support provided under this Act. Accreditation shall be based on the following minimum criteria: a) Demonstrated reinvestment of at least sixty percent (60%) of net profits for the benefit of marginalized stakeholders;

b) Evidence of direct engagement of marginalized groups in enterprise operations or governance; c) Submission of annual impact and financial reports, including data on beneficiaries, employment generated, and community outcomes; d) Verification by a third-party validator or community-based certification mechanism, as may be defined in the implementing rules and regulations.

Sec. 6. Access to Finance.

a) Government financial institutions, including the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), and other government-owned or -controlled banks, shall allocate at least five percent (5%) of their loanable funds for special credit facilities for Certified SEs. These facilities shall feature flexible terms, low collateral requirements, and interest rates below prevailing market levels. b) A Social Enterprise Guarantee Fund shall be established and administered by the Small Business Corporation (SBC) to guarantee non- collateralized loans extended to Certified SEs, including performance bond guarantees for government procurement participation. c) DTI, in partnership with the private sector and multilateral institutions, shall promote hybrid financing options combining grants, equity investments, and concessional loans to fund social enterprise growth and innovation.

Sec. 7. Incentives and Support.

a) Certified SEs shall be eligible to access the following: i. Startup and capacity-building grants under the Social Enterprise Development Fund; ii. Preferential access to at least ten percent (10%) of government procurement, subject to guidelines issued by the Government Procurement Policy Board (GPPB); and iii. Access to microinsurance and customized insurance products endorsed by the Insurance Commission (IC);

b) SEs that are women-led or actively engage informal workers in their formalization efforts shall be prioritized for technical support, tax incentives, and partnerships with local governments and cooperatives.

Sec. 8. Education and Awareness. - The Department of Education (DepEd), the

5 Commission on Higher Education (CHED), and the Technical Education and Skills 6 Development Authority (TESDA) shall incorporate social entrepreneurship education 7 in appropriate academic and vocational curricula. Continuing education programs shall 8 also be developed for community-based learners and out-of-school youth, focusing on 9 inclusive business models, sustainability, and value-based enterprise development. 10 The social enterprise curriculum shall include concepts such as fair trade, 11 environmental stewardship, gender justice, and community transformation.

Sec. 9. Monitoring and Accountability. - An Independent Social Enterprise

13 Impact Committee shall be created under the Congressional Oversight Committee on 14 MSMEs. It shall: a) Review and assess annual implementation reports submitted by the Department of Trade and Industry, including budget utilization and outcomes achieved; b) Oversee the integrity of the accreditation and registry process; c) Evaluate compliance by government agencies and financial institutions with the mandates of this Act; and d) Recommend policy or budgetary adjustments to improve program delivery.

Sec. 10. Appropriations. - An initial amount of One Billion Pesos

(P1,000,000,000.00) shall be appropriated from the current year's budget of the DTI for the implementation of this Act. The fund may be augmented from the following sources: a) A minimum of two percent (2%) of annual collections from sin tax revenues and Tourism Infrastructure and Enterprise Zone Authority earnings, subject to existing laws; b) Official development assistance, foreign grants, and donations from private foundations and philanthropies;and

c) Undisbursed portions of the fund from the preceding fiscal year, which shall be carried over to the succeeding year.

Sec. 11. Implementing Rules and Regulations. - Within ninety (90) days from

4 the effectivity of this Act, the DTI, in consultation with the NAPC, Department of 5 Finance (DOF), Bangko Sentral ng Pilipinas (BSP), Department of Budget and Management (DBM), GPPB, IC, and accredited social enterprise stakeholders, shall 7 promulgate the necessary implementing rules and regulations to carry out the 8 provisions of this Act.

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

unconstitutional or invalid, the remaining provisions shall remain in full force and effect.

Sec. 13. Repealing Clause. - All laws, presidential decrees, executive orders,

rules and regulations, or parts thereof inconsistent with the provisions of this Act are hereby repealed or amended accordingly.

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

publication in the Official Gazette or in at least two (2) national newspapers of general circulation. Approved,