fi,»

SIXTEENTH CONGRESS ) iF RE
OF THE REPUBLIC OF THE PHILIPPINES ) & RECEIVED
First Regular Session ) OATE 2013

HOUSE OF REPRESENTATIVES

House Bill No__ 3335

Introduced by Representative Susan A. Yap

EXPLANATORY NOTE

A social enterprise is a business undertaking with a noble social purpose. It is operated and managed
‘exactly the way an ordinary business is run, only the profits generated are utilized for poverty alleviation and
other socially-relevant causes. Social enterprises use business to tackle social problems, improve
‘communities, improve people’s life chances, or protect the environment. They create shared wealth and give
people a stake in the economy. In short, they attempt to facilitate meaningful social change.

‘This bill secks to provide social enterprises in the Philippines certain incentives and benefits to
‘encourage more entrepreneurs to engage in them and to sustain their economic viability. They include access
to capital, tax exemptions, support services for marketing, research and systems development, and
preferential right to government procurement, among others. To rationalize the granting of these incentives,
the bill proposes the establishment and implementation of a Poverty Reduction ‘Through Social
Entrepreneurship Program (PRESENT).

“The proposed measure is in accord with the Constitutional duty of the State to promote a just and
dynamic social order that will free the people from poverty through policies that provide adequate social
services and an improved quality of life for all. Likewise, it recognizes the indispensable role of the private
sectot in the nation’s drive for economic development through the provision of incentives to investments,
thus encourage social entrepreneurship.

For the foregoing reasons, the immediate passage of the bill is earnestly requested.

HON. SUS.


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SIXTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESEN AWE

House Bill No.

Introduced by Representative Susan A. Yap

AN ACT
ORDAINING THE PROMOTION AND DEVELOPMENT OF SOCIAL,
ENTERPRISES IN ORDER TO ENSURE POVERTY REDUCTION,
PROVIDING THE MECHANISMS THEREFOR, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and the House of Representatives of the Republic of the Philippines in Congress assembled :
CHAPTER I

GENERAL PROVISIONS

SECTION 1. Tide - This Act shall be known as t

‘Magna Carta for Social Enterprises of 2013,

SECTION 2. Declaration of Policy and Statement of Objectives - \tis hereby de

‘ed the policy of
the State to promote a just and dynamic social order that will ensure the prosperity and independence of the
nation and free the people from poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for all.

Likewise, it is a declared policy of the State that the goals of the national economy are a more equitable

distribution of opportunities, income and wealth; a sustained increase in the amount of goods and services

produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the

quality of life for all, especially the underprivileged and that, in the pursuit of these goals, all sectors of the
economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the
base of their ownership.

Further, all economic agents shall contribute to the common good and that individuals and private groups,
including corporations, cooperatives, shall have the right to own, establish and operate economic enterprises,

subject to the duty of the State to promote distributive justice and to intervene when the common good so

demands,


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‘The State shall, particularly, recognize the important role of entrepreneurship that contributes responsibly to
social and economic goals as embodied in the Agenda 21 of the United Nations Conference on Environment
and Development. Specifically, small and medium-sized entrepreneurs shall be recognized as major agents for
tural development, increasing off-farm employment and providing the waasitional means for improving the
livelihood of women.

Finally, itis declared a policy of the State that the promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and self-reliance.

In furtherance of these policies, the Government shall pursue a poverty reduction program that promotes an
environment conducive to the development and viability of social enterprises with the poor as the primary
stakeholders, establishing the mechanisms essential to realizing their potential and achieving theie full growth,

and extending the as

ince necessary for their advancement.

The Government and all its departments, agencies, subdivisions, branches, and instrumentalities shall ensure

the provision of technical and financial assistance and other services and incentives free from any conditions
‘that might infringe upon the autonomy or organizational integrity of said social enterprises in order for them

to develop into viable anti-poverty agents and thereby result in a strong social entrepreneurship movement

(hat shall be instrumental in bringing about a substantial reduction in poverty in the country.
CHAPTER IL
DEFINITION OF TERMS

SECTION 3. Definition of Terms - For purposes of this Act, the following terms shall mean:

8) Absolute poverty refers to the condition of the household below the food threshold level;

b) Ausets refer to all kinds of properties, real or personal, owned by the social enterprise (SE) as defined in

paragraph (gg) of this Section and used for the conduct of its business: Provided, That for the purpose of
exemption from taxes and to benefit from other incentives under this Act, this term shall mean all kinds

of properties, real or personal, owned and/or used by the SE for the conduct of its business;

©) Basies sectors shall refer to the disadvantaged sectors of Philippine society, namely: _furmer-peasant,
artisanal fisherfolks, workers in the formal sector and migrant workers, workers in the informal sector,
indigenous peoples and cultural communities, women, persons with disability, senior citizens, victims of
calamities and disasters, youth and students, children, and urban poor as defined under Republic Act

(R.A) No. 8425, otherwise known as the “Social Reform and Poverty Alleviation Act”;

4) Bottom line shall refer to the objectives or purposes for which a SE is established, which include, among

others, financial, social and ecological objectives;


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i)

Capability building sball refer to the process of enhancing the viability and sustainability of SEs and pertain

to education, training, coaching and other learning events like study tours; technical, consultancy and

advisory services; assistance in organizational systems development; technology incubation, development

and dissemination; value chain and subsector development; conduct of SE trade fairs and missions;
networking and policy advocacy initiatives and other such activities that enable SEs to be effective and

efficient vehicles for poverty reduction. The term capability building precludes the grant of any loan or

equity funds to the SE and shall inn

way refer (0 the provision of equity investments, seed funding,

partnership’s seed funds, equity participation, start-up funds or any such activity that connotes the
infusion of capital or funds from the government or from the SE Development Fund created under

Section 11 of this Act;

Cinil society orgnizations refer to private voluntary organizations of citizens that are established (0 pursue a
mission, usually involving the interest of the public, marginalized groups or specilic sectors of society

‘They include non-government organizations, socio-civic groups, foundations and people’s organizations;
Commission shall refer to the SE. Commission;

Cooperative shall refer to ai

ronomous and duly registered association of persons, with a common bond
of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and

aspirations by making equitable contributions to the capital required, patronizing their products, and

and accepting a fair share of the risks and benefits of the undertaking in accordance with

accepted cooperative principles as defined in R.A. 6938, as amended by R.A. 9520, otherwise

as the “Philippine Cooperative Code of 2008”;

Corporate Social Responsibility or CSR shall refer to the commitment of a private enterprise or business to
contribute on a voluntary basis to sustainable social and economic development by working with relevant

stakeholders to impro

¢ their lives in ways that are ood for business, the social reform agenda, the

sustainable development agenda, and society at large. CSR-related activities shall include, but not limited
to the following: 1) Charitable programs and projects; 2) Scientific research; 3) Youth’ and sports
development; 4) Cultural or educational promotion; 5) Services to veterans and senior citizens; 6) Social

welfare; 7) Environmental sustainability; 8) Health development; 9) Disaster relief and assistance; and 10)

Employee and worker welfare related CSR activities,

Economic subsectors are networks of related actors and enterprises performing various functions in value
chains. These actors and enterprises transform raw materials into finished products, or development

services, and distribute or provide them through market channels to final consumers; they may be


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identified by key raw material source, by finished product or final services provided. An economic

subsector may be comprised of several competing value chains. By understanding the dynamics of

economic subsectors and using them as units of planning social entreprencurship’ interventions,
government agencies, support institutions and SEs shall more effectively reach and benefit a greater

number of poor in poverty reduction programs;

Empowerment strategy shall mean a development strategy that enables the marginalized sectors to own,
manage, and control SEs in order for them to reap maximum benefits from it and which acts as a

channel for direetly distributing income;

Fair tude shall refer to a trading partnership based on dialogue, transpai

ney and respect and which seeks
greater equity in international trade and the transformation and adaption of trading structures and
practices in favor of the poor and disadvantaged by offering better trading, conditions to, and securing the

rights of, marginalized producers and workers;

Lair trade organizations sball mean enterprises certified by internationally and nationally recognized Fait

‘Trade networks;

Fair trade principles vefer to the values adopted by fair trade organizations in their day-to-day operation,
These include creating opportunities for economically-disadvantaged producers; transparency and

accountability; payment of fair price; ensuring no child labor and forced labor, commitment to non

discrimination, gender equity of association; ensuring good working conditions; providing

capacity building; and respect for the environment;

Foundation shall mean the categorization of a non-profit organ

ation that typically either donates funds

and support to other organi

ions or provide the source of funding for its own charitable purposes
Unlike a company, foundations have no shareholders though they may have a board, an assembly and

voting membership. A foundation may hold assets in its own name for the purposes set out in its

constitutive documents, and its administration and operation are carried out in accordance with its
statutes or articles of association rather than fiduciary principles;
GPDB refers to the Government Procurement Policy Board established in accordance with Article X RA

No. 9164 otherwise known as the “Government Procurement Reform Act;

Infermediation strategy shall refer to a development strategy that provides financial, agricultural, business
development and institutional development services to the entrepreneurial poor and employers of the
poor and provides as well product development and marketing support using the principles of fair trade

to marginalized producers. A SE engaged in intermediation strategy need not be owned by the


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marginalized stakeholders but provide immediate access to services among critical mass of these

marginalized stakeholders;

Marginal

Sector: shall refer to groups of people who are stigmatized or marginalized by virtue of their

physical, psychological, economic, social or cultural circumstance;

Misro-enterprise as defined in R.A. No. 6977, as amended by R.A. No. 9501, otherwise known as the
“Magna Carta for Small Enterprises,” shalll refer to any business activity or enterprise engaged in industay,
agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation
whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular
business entity’s office, plant and equipment are situated, must have a value of not more than ‘Three
Million Pesos ( P 3,000,000.00). This amount is subject to review and adjustments by the Micro, Small
and Medium Enterprises Development (MSMED) Council, taking into account inflation and other
‘economic indicators and may use other variables such as number of employees, equity capital and assets

Mirjinance shall refer to the provision of a broad range of financial services such as deposits, loans,
payment services, money transfers and insurance products to the poor and low-income households and
their microenterprises and small business, to enable them to raise their income levels and improve their

living standards;

Minimum basics needs shall refer to the needs of a Filipino family pertaining to survival (food and nutrition;
health; water; and sanitation), security (shelter; peace and order; public safety, income and livelihood); and

enabling, servi

(basic education and literary, participation in community development, family and

psycho-social eare);

Non-Government Organization or NGO refers to a duly registered non-stock, non-profit organization

focusing on the upliftment of the basic or disadvantage sectors of society by providing advocacy, training,

community organizing, research, access to resources, and other similar activities and, as defined under
Section 34 (EH) (2) (©) of Republic Act No. 8424, as amended, otherwise known as the National Intemal
Revenue Code of 1997, organized and operated exclusively for scientific, research, educational, character-
building and youth and sports development, health, social welfare, cultural or charitable purposes, or a
combination thereof, and no part of the net income of which inures to the benefit of any private

individual;


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w) People’s Organization or PO refers to a self-help group belonging to the basic sectors and/or disadvantaged
groups composed of members having a common bond of interest who voluntarily join together to

achieve a lawful common social or economic end;

x) Persons with Disability shall refer to those suffering from restriction or different abilities, as a result of a
mental, physical or sensory impairment, to perform an activity in the manner or within the ringe

considered normal for a human be

)) Poor shall refer to individuals and families whose income fall below the poverty threshold as defined by

the National Economic and Development Authority and/or are deprived of the means to provide in a

sustained manner their minimum basic needs of food, health, education, housing and other essential

amenities of life, as defined under R.A. 8425

2) Poverty reduction) alleviation shall mean overcoming the income, resources, and capability. deprivation
among the poor as defined in the preceding paragraph and the marginalized sectors as defined in
parageaph (¢) hereof

aa) Private Enterprise shall refer to an organization engaged in a business activity organized for the purposes

of accumulating profit and whose primary stakeholders and beneficiaries are its owners;

bb) Procuring Entity refers to any branch, department, office, agency or instrumentality of the government,
including state universities and colleges, government-owned and/or controlled corporations,
government financial institutions, and local government units procuring goods, consulting services and

infrastructure projects;

&) Resource mobilization strategy shall refer to a development strategy indented to generate income from the sile

of products and services of a SE in order to finance of subsidize the operations of its core development

progr

or development interventions among the marginalized sectors;

dd) SEPPS cefers to a SE. with the poor as primary stakeholders and which is a wealth creating organization

that explicitly de

es and pursues poverty reduction/alleviation or improving the quality of life of

specific segments of the poor as principal objective. A SEPPS engages and invests in the poor to become
effective workers, suppliers, clients and/or owners, and ensures that a substantive part of the wealth
created by the enterprises is distributed to, or benefits, them, in addition to reinvesting its surplus or
profits back to the enterprises co sustain the fulfilment of its social mission, a SEPPS also uses its surplus

or profits and mobilizes other resources to assist the poor to become partners in SE or value chain

manayement/ governance and to become partner in community, sectoral and societal transformation;


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ee) SEGEP refers to the SE Guarantee Fund Pool created under this Act;

f) Social development refers to the continuing process of addressing the needs of society, beginning with the
people’s minimum basic needs, through 2 systematic implementation of socio-economic programs or

packages

49 Socal Enterprise or SE. refers to an organization, whether an association, single proprietorship, partnership,

corporation, or cooperative, whose primary stakeholders and/or beneficiaries are marginalized sectors of

society, engaged in providing goods and services that are directly related to its mission of improving
societal well-being, It generates profit or surplus with due regard to social and environmental costs, and

make a pro-active contribution to resolving social and environmental problems. A

for purposes of

this Act, shall principally mean a SEPPS;

4b) Social Enterprises Services Institution refers to an organization that provides assistance to SE

for them to

become viable and sust

ble and which assistance pertains to supplying needs such as trainings,

education and other capacity-building measures, research and development, and other similar activities;

i) Social Enterprise Advocacy Group refers to an organization whose primary purpose is supporting the cause of
SEs especially with regard to public policy and articulating issues or causes related to social

entrepreneurship;

JD) Sosial entrepreneur refers to an innovative individual or institution that promotes the creation ‘and

operation on of enterprises or livelihiood endeavours for those in need or which address. social

problems and improve societal well-being;

Ak) Social entrepreneurship entails innovations designed to explicitly improve societal well-being, housed within

‘entrepreneurial organizations, which initiate, guide or contribute to change in society;

4) Social Inclusion strategy refers to the development strategy that assists groups of people who are stipmatized
or marginalized by virtue of their physical, psychological, economic, social or cultural circumstances in
order to restore their dignity by not only removing the barriers that limit their access to the delivery of

ba

ic social services and employment, but more importantly, by nurturing work and other environments

that create avenues for their participation as productive members of society;

mm) Sovial Investors are individuals or institutions that choose to put in money to business endeavour or
activity not particularly for financial profit but to fulfil a social mission which may include poverty
reduction, concem for environmental protection, strong organizational governance, and a desire for

more economically just world;


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Sacial reform refers to the continuing process of addressing the basic inequities in society through a

systematic, unified and coordinated delivery of socio-economic programs or packages;

‘Transactional roles vefer to enterprises-related functions performed by the poor that involve an exchange

‘of goods or services for money including being workers, suppliers, clients or owners;

‘Trunsformational roles are functions performed by the poor as conscious agents of change to lift their
‘own selves from poverty and to participate in group efforts to improve the quality of life of their

community, sector or society as a whole;

Transactional services pertain to enterprises or market-driven activities, such as providing. loans,

demonstrating new technologies or conducting trainings that are necessary for the poor in the SE.

system to effectively and efficiently perform their roles as workers, suppliers, clients and own

‘Teanss

ctional services may be fee-based, such as the granting of loans, or non-fee based, such as the
extension of production-related trainings;

‘Transformational services pertain to activities that empower the poor, such as leadership formation of
onganizational development, asset build-up and providing education and experiential learning

opportunities, to become conscious change agents for themselves, for their communities sectors and

society as a whole;

Underemployment shall mean an economic position where an employed person's desire to have
additional hours for work in his/her present job or to have an additional job, or to have a new job with

longer working hours is not met;

Unemployment shall mean economic situation where persons who are 15 years old and over as of theit

t birthday and are 1) without work or have no job or business, 2) available for work and willing to
take up work in paid employment or self-employment, 3) seeking work and had taken specific steps to

look for a job or establish a business but failed to; and,

Viale chuin refers to value-adding economic activities that an enterprise is interlinked with in the
process of producing goods and/or services to serve its chosen market. A value chain typically consists
of : 1) inbound distribution or logistics, 2) manufacturing operations, 3) outbound distribution or
logistics, 4) marketing and selling, and 5) after-sales services. These activities are supported by 6)
purchasing or procurement, 7) research and development, 8) human resonrce development, and 9)

organizational development. A SE that understands and manages its value chain improves its capability


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to create economic, environmental and social values towards improving the position and benefits of
the poor in the value chain and towards ensuring the viability and sustainability of the enterprise.

CHAPTER III

POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES.

SECTION 4. Soci:

Enterprise (SE); General Concept and Coverage ~A SI, for purposes of this Act,
refers principally to a SE with the poor as primary stakeholders, As such, it declares and pursues poverty
reducton/alleviation or the improvement in the quality of life of specific segments of the poor as its principal

objective. It pursues this objective by directly engaging and

sting

the poor to become effective workers
suppliers, clients and/or owners of the SE as well as partners in poverty reduction, economic and social
development. A SE may be collectively owned by the poor in the form of cooperatives or associations where

the poor are the exclusive owners or compose a majority of the members,

In order for the SE to fall under this defin

n, and thereby be eligible for the service, assistance and

incentives set forth hereunder, said SE:

4) shall provide or facilitate the provision of a combination of transactional and/or transformational
services to improve the position and benefits derived by the poor from the SE and the value chain or
economic subsectors where the SE is located, including becoming workers-owners, supplicrs-owners,

supervisors and

anagers, active members and leaders in governing bodies of the SE or its allied

‘organizations;

b) shall invest a substantive part of its surplus, profits or mobilize other resources to

4 the poor 0
become partners in SE or value chain management/governance and/or to become partners. in

community, sectoral and societal transformation;

©) shall make a pro-active contribution to resolving social and environmental problems and generate profit

‘or surplus with due regard to social and environmental costs;

4) shall employ any of the following development strategies in the pursuit of its social mission: 1)

empowerment strate,

2) social inclusion strategy; 3) intermediation strategy; and resource mobilization

strategys
) shall reinvest part of its surplus or profits back to the SE to sustain the fulfilment of its social mission;

) shall be engaged in an economic activity within the sectors of agriculture and fisheries, industry and

services which, for purposes of this Act, shall refer to an activity in any of the economic subsectors;


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) shall ensure that substantive part of the wealth created by the enterprise is distributed to the poor in the
form of services, dividends and other forms of benefits, and payments and incentives for products or

services rendered consistent with the principles of fair trade;

‘h) shall be duly registered with the appropriate agencies as provided under the Corporation Code or the

Cooperitive Code of the Philippines;

i) shall be one hundred percent (100%) owned and capitalized by Filipino citizens if single proprietorship or

part

hip. If the enteepri

is a juridical entity, at least sixty percent (60%) of its capital outstanding

stocks must be owned by Filipino citizens;

j) shall neither be a beanch, subsidiary or di

ion of a private enterprise or by persons who are not owners
or employees of the said SE. Provided, That this shall not preclude a SE. fom accepting subcontractors
from large private enterprises or firms or from joining in cooperative or joint-venture activities with other

SE or foundations practicing CSR.

sistance and incentives set

Only SEs with the poor as their primary stakeholders are entitled to the service:

forth under this Act: Provided , ‘That SE:

at have not achieved financial sustainability may be eligible to avail

of the services assistance and inc«

tives set forth in this Act by presenting a workable strategy t0 achieve

fin

ial sustainability over a reasonable period of time. This is cognizant of the fact that SEs create a

combination of econon

c, environme

al and social values much of which are not easily qualified especially
in financial terms and that these social objectives are primary and cannot be sactificed; thus, it is generally

more difficult for SEs to achiev

¢ financial sustainability. It is further recognized that SEs may be also be

creating positive social value even if they have not achieved financial sustainability.

Micro, small, and medium enterprises established under R.A. No. 6977, as amended by R.A. No. 8299 and
RA. 9150; Barangay Micro Business Enterprises established under RA. 9178; Fair ‘Trade certified
organizations ot certified Pair Trade organizations, Overseas Filipino Workers (OFWs) and their dependents
that are organized and assisted by the Overseas Workers Welfare Administration (OWWA) and the National
Livelihood and Development Corporation (NLDC) under the Livelihood Development Program for OFWs;
Agrarian Reform Beneficiary Organizations (ARBO) under the various programs of the Department of
Agrarian Reform (DAR); as well as community-based associations composed of poor Families organized by

the Department of Social Welfare and Development (DSWD) and the Local Government Units (LGU’s)

under the Self-Employment Assistance — Kaunlaran Program as an alternative to the Conditional Cash

‘Teansfer Program that meet the preceding requirements shall be regarded as a SE. under this Act.


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Within ninety (90) days ftom the effectivity of this Act, the Commission shall formulate the implementing
rules and regulations governing the application of SEs to qualify and be regarded as SEE under this Act,
following the principles of self-regulation, transparency and responsibility.

SECTION 5. Formulation of a Poverty Reduction Through Social Entreprencurship (PRESENT)
Program ~'V'o promote the development of SEs with the poor as primary stakcholders, a comprehensive and
fully-integrated Poverty Reduction through Social Entrepreneurship (PRESENT) Program shall be

formulated, guided by the following principles:

a) Incorporation of the PRESENT Program in the government’s poverty reduction drive ay a

‘major sustainable and comprehensive strategy;

b) Rationalization of poverty reduction programs by streamlining and coordinating the various anti-
poverty programs of the government to reduce inefficiency and duplication and to improve the

effectiveness of each programs;

©) People’s participation and empowerment by mobilizing civil society organizations and social

‘movement groups working with the poor;

Promoting sustainable programs that reduce inequality in income across economic sectors and

increase self-reliance among the poor;

©) Enabling SEs to overcome constraints and to take advantage of opportunities for enhancing the

position and benefits of the poor in economic subsectors and value chains; and,

f) Gender

ensitivity by ensuring women’s equal rights and access to SF’s resources.

The planning framework of the PRESENT Program and its planning process shall ensure that the poor are

engaged as primary stakeholders. It shall add value and complement ecosystem-based, community-based and

other tools and processes in local economic development by promoting and utilizing the economic subsector

trategic unit of analysis and planning SE development interventions.

IT Program shall identify and develop key SEs and resource institut

WS as partners in strategic
economic subsectors that have the potential for growth and where large numbers of the poor ate
concentrated. SEs shall be developed as vchicles to ensure that the poor benefit the most from sustainable

subsector development

PRES

T medium-term and annual development plans shall be formulated in synchrony with the medium-
term development plan of the national government.

CHAPTER IV

INSTITUTIONAL MECHANISMS


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SECTION 6. Creation and Composition of the Commission on SEs ~Vo carry out the above stated

policy and to spur the growth and development of SEs in the country, the Commission on SEs, hereinafter
referred (0 as the Commission is hereby created under the Office of the President.

‘The Commission shall be the primary agency tasked to carry out the promotion, propel the development, and
spur the growth of SEs in the country. It shall be responsible for facilitating and coordinating, national efforts
to promote the viability and progress of SEs.

he Commission shall be headed by a Chairperson to be appointed by the President, with the Secretary of the
Department of Trade and Industry (DTI) and the Secretary of the Department of Agriculture as Co-Vice-

Chairpersons and shall be composed of the following:
(@) Lead Convenor of the National Anti-Poverty Commission (NAPC);
(b) Director General of the National Economic Development Authority (NEDA);
(6) Secretary of the Department of Finance (DOF);
(d) Secretary of the Department of the Interior and Local Government (DILG);

(©) Secretary of the Department of Labor and Employment (DOL

(Secretary of the Department of Science and Technology (DO!

(2) Chairperson of the Cooperative Development Authority (CDA);

(h) Secretary of the Department of Education (DepEd);

@ Secretary of the Department of social and Welfare Development (DSWD);

(i) Secretary of the Department of Agrarian Reform (DAR);

(k) Secretary of the Department of Health (DOH);

() Secretary of the Department of Environment and Natural Resources (DENR);

(mm) Nine (9) representative from SEs, three (3) representatives each from the main island groupings

of Luzon, Visayas and Mindanao;
(0) Three (3) representatives from SE Service Institutions; and

(©) Three () representatives from SE Advocacy Groups;
Cabinet-ranked ex officio members of the Commission shall be designate a permanent representative in case
they fail to attend its meeting. The designated permanent representative of any of the aforementioned

Cabinetranked members of the Commission must hold a position not lower than a bureau director


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‘The representatives of the SPs from the main island groupings of Luzon, Visayas and Mindanao, the SI

Service Institutions, and the SE Advocacy Groups shall be chosen by the President fro1

among the
nominees submitted by their respective national organizations to serve in the Commission tor a term of three

(3) years. ‘These representatives must be conversant in the theory and practice of

ind committed to the
policies and progeams provided under this Act.

‘The Chairperson and members of the Commission shall be entitled to a reasonable per diem for each meeting
actually attended at such amount as may be fixed by the Commission in accordance with existing laws, rules
and regulation

‘The Commission shall, from time to time, call upon the participation of any government agency to attend in
its meeting (© assist in clarifying issues and finding resolution to problems that concern their respective

offices with respect to the implementation of the PRESE!

Program enunciated hereunder and which

affects the yrowth and development of SEs.

‘The Commission may create an E

‘ecutive Committee of seven (7) members elected by the Commission
members from among themselves or their designated permanent representatives, with at least three (3)
members representing the SEs, and with authority to act for and on behalf of the Commission during

intervals of Commission meeting:

within the specific authority geanted by the Commission
SECTION 7. Power and Functions ~The Commission shall have the following powers and functions:
(a) Formulate policies, plans, programs and projects to develop and promote SEs as a tool for poverty

reduction consistent with national development objectives;

(b) Oversee the successful implementation of the PRESENT Program and other Public Private

Partnership programs with the poor as the primary stakeholders;

(6) Identily sources of financing to expand SEs;

(J) Monitor and evaluate the performance of programs and projects for appropriate incentives;

(©) Call upor

yy povernme

agency to carry out and implement programs and projects identified by

the Commission;

(f) Call upon POs, NGOs, the academe and other sectors to provide advice on matters pertaining to

Rs and conduct of transactional and transformational services to farmers, producers, workers,

consumers and other stakeholders;

(@) Submit annual and other periodic reports to the President and Congress of the Philippines through

the Congressional Oversight Committee;


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(h) Promulgate such rules and regulations and exercise such other powers and functions as may be

ary to carry out effectively the purposes and objectives of this Act; and,

(Perform such other functions as may be necessary for its effective operations and for the continued
‘enhancement, growth or development of SEs.

SECTION 8. Secretariat and office — ‘There is hereby created a Commission secretariat headed by an

Executive Director to serve as the national tech

and a of the Commission with

the member agencies providing addit

J staff support as the need arises. The secretariat shall perform the

following funetions:

(a) to provide staff support to the Commission, with the assistance of the NEDA secretariat, in the

formulation of the PRESENT development programs and plans;

(b) to assist the Commission in the implementation of the PRESENT development programs and the

annual and medium-term development programs;
(6) to assist the Commission in the accreditation of SEs;

( ( assist the Commission in monitoring the PRESENT development programs and the activities of

the various concerned government agencies with respect to SEs;

(©) to prepare, collate and integrate all necessary inputs to the Commission’s yearly report on the status

of SEs in the country;
(® (© submit periodic report to the Commission on the progress and accomplishment of its work
programs; and,

(®) 1© perform ad/hoc functions as are authorized by the Commission.

The Commission shall have its principal place of business in Metro Manila and may establish such branches

within the Philippines as may be deemed necessary by the President of the Philippines 10 carry out the
powers and functions of die Commission.
SECTION 9. The National Center for SE Development = There shall be established » National

Center for SE Development (NCSED) under the Commission which shall develop a research and

development system, provide training and education on SE development, and establish SHE

marketing
services in order to implement the provisions of this Act.
In this regard, it shall, in coordination with relevant agencies, perform the following functions:

(@) provide SEs with capability-training and education through the SE Capability Building Program

created under Section 11 of this Act;


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(b) develop and enhance a research and development system that shall equip ever vith innovative

and sustainable approaches that ensure improvement in the access to more desirable basic social

services by the poor pursuant to Section 13 hereunder; and,

(Q manage a SE Marketing Assistance Program (SMAP) that will ensure the generation of the highest
possible income for the SEs pursuant to Section 14 hereof.
The NCSED shall be headed by the Executive Director of the Commission Secretariat, It shall maintain a

multisectoral, multi-disciplinary pool of experts including those from the academe, practicing professionals,

business and industry, youth, women and other concemed sectors, who shall be sereened according to the

qualifications set by the Comm

sion.
‘The NCSED shall, in addition to coordinating with relevant agencies, partner with the University of the
Philippines Institute for Small Scale Industries (UP-ISSI), state universities and colleges, other universities and
academic organizations, the Technical Education and Skills Development Authority (TESDA), the

‘Technology and Livelihood Resouree Center (TLRO), the DOTC, and CSOs in implementing its programs.

SECTION 10. Role of LGUs in SE Development ~Pursu:

1 to the relevant provisions of R.A, No,

710), otherwise known as the Local Government Code, the LGUs shall be primarily responsible for the
development of SEs and the implementation and enforcement of the relevant provisions of this Act within

theit respective jurisdictions with the end in view of reducing poverty there

. The LGUs are hereby
mandated to include in their respective local development plans certain policies and programs geared toward
the development of SE’ in their jurisdiction.

LGUs with viable SE dev

opment plans as i

orporated in their respective development ph
avail of the SE Development Fund created under the immediately succeeding section for the purposes of

initiating and facilitating the development and sustainability of SEs in their own jurisdiction: Provided, that no

L.GU shall establish and operate its own SE.

CHAPTER V

DEVELOPMENT OF SOCIAL ENTERPRISES
SECTION 11. SE Capability Building and Sustainability Program; Creation of SE Development
Fand = "There is hereby established a SE Capability Building and Sustainability Program whose primary

objective is to guarantee the viability and sustainability of SEs through activities, in general, both

transformational services and transactional services. This program shall include training in social
‘entrepreneurship development, institutional strengthening, human resource competency and skills training,
business planning and advisory services, upgrading of accounting and auditing systems, technical assistance

for the installation or improvement of management information systems, technology intervention, technology


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incubation/commercialization, market studies, and product development competitiveness, business matching

activities, trade fairs and missions, policy adv

acy, disaster-resiliency and other related activities
The SE Capability Building and Sustainability Program shall likewise include the establishment of an
insurance system for SEs affected by natural calamities in line with the National: Heamework Strateyy on

Climate Change 2010-2022 as provided for under RA 9729 or the Climate Change Act of 2009 and RA 10121

or the Philippine Disaster Risk Reduction and Management Act of 2010.
‘Toward strategically developing the nation’s human resource capability in social entrepreneurship, the DepEd
and the CHED shall cause the integeation of SE. content and inclusion of SE content and inclusion of SIE

courses in the curricula at all levels,

‘specially in the secondary and tertiary levels.
For this purpose, there is hereby created and established a SE Development Fund (SEDF) in the amount of

Three Billion Pesos (P 3,000,000,000.00) to be administered by the Commission. Capability building, projects

approved by the Commission shall be implemented by the NCSE!

Only the proceeds of the SEDF shall be used for the purposes provided herein. Any undisbursed proceeds

for the precedit

year shall from pact of the disbursable portion of the SEDF in the following year.
SECTION 12. Promotion and Development of SEs as One of the Purposes of the People’s
Development Trust Fund (PDTE) ~The promotion and development of SEs is hereby declared one of

the purposes of the PDIF established under Section 10 of R.A. 8425.

For this purpose See. 11 of R.A. 8425 is hereby amended as follows:
Section 11. Purposes of the People’s Development Trust Fund. ‘The earnings of the PDIP shall be

utilized for the following purposes:

(1) Consultancy and taining services for micro-finance institutions and their beneficiaries

on the establishment of the necessary support services, social and fin

ancial preparation
of beneficiaries, preparations of plans and programs including fund sourcing and

assistance, establishment of credit and savings monitoring and evaluation m

nists
I] AS WELL AS CONSULTANCY AND TRAINING SERVICES ON SOCIAL
ENTERPRISE (SE) MANAGEMENT IN THE FUNCTIONAL AREAS OF
MARKETING, ORGANIZATIONAL AND HUMAN — RESOURCE
MANAGEMENT, OPERATIONS MANAGEMENT, — FINANCIAL

MANAGEMENT AND STRATEGIC MANAGEMENT;

(2) Scholarships or training grants for microfinance OR SE staff and officers, and selected

beneficiaries;


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(3) Community organizing for microfinance, livelihood, SE and micro-enterprises taining,

(A) Livelihood/micro-enterprise/SE DEVELOPMENT AND — CAPABILITY
BUILDING project program feasibility studies and researchés,

(6) xxx

(6) xxx

(7) Legal and other management support services such as registration /

ACCREDITATION, documentation review and enforcement, financial audit and

operational assessment;

(8) Information dissemination of microfinance technology AND SE DEVELOPMENT;

and,

(9) Other

vities to support microfinance AND SEs as approved by the desig

a

ncy administering the PDTF

The PDFT may be accessed by the following:

@) xxx

(b) xxx

(©) xxx;

(a) THE NCSED;

(©) QUALIFIED SES.

SECTION 13. Social Enterprise Research and Development System ~The Commission, in

coordination with the NEDA, DOST, and D

, and other appropriate agencies and research institutions,

shall develop and enh

a research and development system that:

{) provides studies on opportunities for poverty reduction and SE development in key economic
PP Poverty y

subsectors and other inputs for the Commission to undertake strategic planning for

Program;

(b) equip SEs and support institutions with technologies that are appropriate for enhancing the

participation and benefits of the poor in various economic subsectors; and,

(©) equip SEs and support institutions with innovative and sustainable approaches to improve access of

the poor to quality basic social services.


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TION 14. Social Enterprise Marketing Infrastructure Development — ‘the Comission shall

promote the development and exp:

sion of local and foreign markets for the products and services of SEs,

guided by the principles of fair trade. Consistent with this, the Commission shall:

@) establish a SE Marketing As

ince Program (SMAP) that will assist SEs match supply with demand
in both domestic and foreign markets, as well as promote SE products and services through tri-

media, trade fairs and trade missions;

(b) Develop, install and sustain a SE market information system with the assistance of the DTI and

DOYC which shall be called the SE Marketing Information Network (SMIN).

‘The SMIN shall be set up from the level of the municipal and provincial LGUs, the regional and up to the
Commission level within one (1) year from the approval of this Act, taking into account existing information
networks such as the intemet and using a dedicated website for the purpose, (o ensure linkage of the SEs with
the government and its various departments, agencies, bureaus, and instrumentalities, the local and domestic
markets, as well as research institutions. The Commission shall provide technical assistance in setting up dhe

SMIN at the local and regional levels.

All government departments, agencies, bureaus, research institutions, as well as the LGUs shall consolidate

and continuously update all relevant information and data that would be of use to SE's on a periodic basis and

make such data available in a dedicated website on the Internet.
The SMIN shall provide information and marketing services related to products of SE's which shall include

the following:
1, Supply data;
Demand data;

3, Price and Price trends;

Product standards;

Directory of, but not limited to SEs, traders, key market centers, processors and business

institutions, both at the national and local levels;

6 Informa ated from research institutions;

jon and technology ger

7. International, regional and local market forecast; and,

& Resource accounting data.

CHAPTER VI

ACCESS TO CREDIT RESOURCES AND GUARANTEE FUND


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SECTION 15. SEs’ Access to Credit Resources and Mandatory Allocation Thereof ~ In the

pursuit of poverty reduction through SEs, there is a need to ensure their acce:

to credit. In this regard, the
active participation of the banking sector and government financial institutions is hereby mandated,

i

addition to and apart from the special credit windows mandated under Section 16 of R.A. No. 8425 10 be
opened by the Land Bank of the Philippines, Development Bank of the Philippines, Philippine Postal Bank,

and Al Amanah Bank for the promotion of microfinance, the foregoing banks are hereby mandated to set

aside at least eight percent (8%) of their total loan portfolio based on their balance sheet as of the end of the
preceding quarter and open a special credit window for SEs as herein contemplated.

For a period of ten (10) years from the date of the effectivity of this Act, all other lending institutions as
defined under Banko Sentral ng Pilipinas (BSP) rules, whether public or private, shall likewise set aside atleast
eight percent (8%) of their toral loan portfolio based on their balance sheet as of the end of the previous

quarter and make the same available for SEs through a special credit window.

‘The BSP, in con:

tation with the Commission, shall formulate the rules for the effective implementation of
this provision: Provided, That the purchase of government notes, securities and other negotiable instruments
shall not be deemed compliance with the foregoing provision: Provided, further, That the BSP shall establish an
incentive program (0 encourage lending to SEs beyond mandatory credit allocation to said enterprises, such
as possible reduction in bank’s reserve requirement.

‘The Commission shall establish the appropriate systems to monitor all loan applications of SEs in order to
account for the absorptive capacity of the SE sector.

‘The BSP shall require lending institutions covered by this Act to furnish the Commission on a quarterly basis
4 regular report on their respective compliance with the above provisions on the mandatory credit allocations

for SE

and act with dispatch on the Commission’s reports of non-compliance therewith.

TThe special exedit window for SEs shall bear lower than market interest rates with longer terms of repayment

and waiver of applicable fees.

SECTION 16. SE"s Special Credit Window; Purposes ~The especial ceedit window mandated inthe

preceding section to be created shall be intended for, but not limited to, the following purposes:

(@) Organizational Development Loan or Capacity-Building Loan for the conduct of social
Preparation activities or the conduct of capability-building/training or professional development
of the board, management and staff of the SE intended for social enuepreneurship development
and institutional strengthening, human resource competency and skills training, business

planning and advisory — services, technology _ intervention, _ technology


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incubation/commerci

ization, market studies, and product development competitiveness,

business matching activities, trade fairs and missions, and policy advocacy;

(b) Credit Line for Business Development Loan or Working Capital Loan to cover the
operational and management expenses of a start-up/ existing business’ or income generating
project, including receivable financing and/or purchase of additional inventory, and soft or
intangible investments such as : trade fair participation; pre-operating expenses for expansion

project; eental deposit; IT’ software packages; franchise development packages, and others;

(6) Fixed assets Financing t cor

er acquisition of fixed assets like machinery and equipment os
motor vehicle; lot acquisition for project site and/or the construction of a plant and building and

the improvements thereof;

(@) Value Chain Financing to cover any of the value chain activities (production, processing and

marketing) with direct forward or backward link;

(©) Domestic Letter of Credit /Trust Receipt to provide a standby credit facility for the borrower

for the purchase of produc

inputs, equipment machinery, implements,

ind spare parts, whereby

yment of which is guaranteed and to be

wide to the seller by the lending insticutions, provided

all documents cor

1rm with terms and conditions of the credit; and,

()) Revolving Credit Line for re-lending to finance the livelihood project requirements of end:

borrowers

SECTION 17. Eligibility for Agriculture and Fisheries Credit ~ At least ten percent (10%) of the

fi

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cd under Section 6 of Republic Act. No. 10000, otherwise known as “The Agri-Agra Reform:
Credit of 2009”, and mandated to be set by all banking institutions, whether government or private, for
agriculture and fisheries credit shall be made available for SEs engaged in agriculture and fisheries activities.

CHAPTER VII

INCENTIVES AND BENEFITS
SECTION: 18. Incentives and Benefits. — In recognition of the social value created by the SEs in
addressing the problem of poverty, reducing inequality in incomes across economic sectors, increasing, self-
reliance among the poor and creating opportunities for them toward raising their quality of life, the SEs
cteated and /or accredited in accordance with this Act shall, in addition to their entitlement for organizational
development under Section 11 through 14 and to gain greater access to financing under Section 15 through
17, be entitled to the fiscal incentives and benefits provided in Sections 20 through 22 of this Act. In addition,

social investors shall also be entitled to certain incentives under Section 23 hereunder.


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To level the playing field and in recognition of the circumstances of start-up SEs primarily employing persons
with disabilities, the SEDP created in Section 11 of this Act shall provide a cash incentive for every person
with disability employed, representing at least twenty five percent (25%) of daily minimum wage, until such
time that said SE is able to achieve financial sustainability.

SECTION 19. Tuiffs and Duties Exemption for the Importation of Product Inputs, Equipment,
Machinery, and Implements. ~ All SEs as duly certified by the Commission in consultation with the
Department of Kinane and the Board of Investment (BOD) of the Department of Trade and Industry shall,
for five (6) years after the effectivity of this Act, be exempted from the payment of tariff and duties for the
importation of all types of products inputs, equipment, machinery, implements, and spare parts: Pruwied,
Jowever, That these inputs, equipment, machinery, implements, and spare parts shall be for the exclusive use of

the importing SE

and can be shown to be directly related to further improve the value chain operations af
the SEs.

‘the

mission, in consultation with the Department of Finance and the Board of Investment, shall, within

ninety (90) days from the effectivity of this Act, formulate the implementing rules and regulations governing
the importation of the inputs, equipment, machinery, and implements for use by the SEs.

SECTION 20. Taxation of an Accredited SE ~The taxation of a SE shall be as follows:

@) A SIE with a net income of not more than Ten Million Pesos (P10,000,000.00) shall be exempt
from all national, city, provincial, municipal or barangay taxes of whatever name and nature:
Provided, ‘Chat a cooperative with accumulated reserves and undivided net savings of not more than
Fifteen Million Pesos (P15,000,000.00) that qualifies as a SE under this Act shall likewise be

exempt from all national, city, provincial, municipal or barangay taxes of whatever name and

ature.

b) ‘Transactions of the SE and its clients shall be

;pt from documentary stamp tax

€) Sales or exchanges of real property by the SE classified as capital assets or shares of stock shall be

exempt from Capital Gains Tax.

d) A reinvestment made by a SE for the expansion of its socio-economic projects within the area of

its operation shall be tax deductible from the gross income for income tax purpos.

SECTION, 21. Preferential Right for SEs Transacting Procurement Business with Government
Sis shall be accorded a preferential right in the procurement process and the implementation of procurement
contracts by the government and all its branches, departments, agencies, subdivisions, and instrumentalities,

including government-owned and/or — controlled corporations and local government units.


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All Annual Procurement Plans of a Procuring Entity of the government as cited in Section 7 of R.A. No.
9184 or the “Government Procurement Reform Act” shall promote, to the extent possible or available, the
preferential procurement of goods produced and services rendered by SEs.

The provision of Section 10 of R.A. 9184 to the contrary notwithstanding, the Procuring Entity shall, at all
times, resort first to direct contracting, shopping, or negotiated procurement in obtaining goods or services
where such goods or services may be obtained from a SE within the area of operation of the Procuring Entity
and is duly certified by the Commission as having the capacity to supply the same.

(a) Hor this purpose, Sections 50, 52, and 53 of R.A. 9184 are hereby amended to read as follows

Section. 50. Direct Contracting. Direct Contracting may be resorted to only in any of the following

conditions

b. xxx;

D. WHERE THERE EXISTS A SE SELLING THE GOODS OR SERVICES
REQUIRRED BY THE PROCURING ENTITY AS CERTIFIED BY THE

COMMISSION.

Section. 52. Shopping. — shopping may be resorted to under any of the following instances:

a. When there is an unforeseen contingency requiring immediate purchase: PROVIDED, THAT
‘THE PROCUREMENT OF THE GOODS OR SERVICES IS FIRST OBTAINED
FROM A SE WITHIN THE AREA OF OPERATION OF THE PROCURING
ENTITY WHICH IS DULY CERTIFIED BY THE COMMISSION AS HAVING THE,
CAPACITY TO SUPPLY SAID GOODS AND SERVICES: Provided, however, That the
amount shall not exceed [ Fifty thousand pesos (P50,000) | ONE HUNDRED THOUSAND,

PESOS (P100,000), ox,

b. Procurement of ordinary or regular office supplies and equipment not available in the
Procurement Service involving an amount not exceeding Two hundred fifty thousand pesos
(P250,000): Provided, however, That the Procurement does not result in Splitting of Contracts:
Provided, jurther, That A PRICE QUATATION FROM A SE CERTIFIED BY THE
COMMISSION AS HAVING THE CAPACITY TO FURNISH OR PROVIDE SUCH
OFFICE SUPPLIES AND EQUIPMENT SHALL FIRST BE OBTAINED,

PROVIDED, FINALLY, THAT ONLY AFTER THE FAILURE OF SUBMISSION


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OF A PRICE QUATATION BY A SE THAT at least three (3) price quotations from

OTHER bona fide supplicrs shall be obtained.

Section, 53. Negotiated Procurement. ~ Negotiated procurement shall be allowed only in the following

instances
a Xxx
b. xxx

d. xxx;or,

F, WHERE THE GOODS OR SERVICES SUBJECT OF THE PROCUREMENT.
CONTRACT MAY BE OBTAINED FROM A SE WITHIN THE AREA OF
OPERATION OF THE PROCURING ENTITY AND WHICH IS DULY
CERTIFIED BY THE COMMISSION AS HAVING THE CAPACITY TO
SUPPLY SAID GOODS OR SERVICES.

(b) Only ifand when no procurement is perfected by way of direct contracting, shopping, or negotiated

procurement by reason of the absence of a SE within the area of operation of the Procuring Entity

which is certified by the Commission as having the capacity to supply the goods and s

ces subject

of the procurement contract or of the lack of interest to supply from a SE shall the Procuring I'ntity

through its Bids and Awards Committee issue an invitation to bid;

(6) A Procuring Entity shall, where applicable, have at least one member representing SEs;

(@) In the implementation of R.A. No. 7880, otherwise known as the “Fair and Equitable Access to
Education Act”, in particular the allocation for textbooks, desks, furniture and equipment used for
instructional purposes, the ten percent (10%) out of twenty five percent (25%) of the amount
released for the purchase of desk, furniture and equipment allocated to SEs or cooperatives of

Persons with disabilities shall always be observed, notwithstanding the provision of R.A. 9184 or the

wernment Procurement Act” to the contrary;

(©) Registered small enterprises under R. A. 6977, otherwise known as the “Magna Carta for Small
Enterprises,” as amended by R.A, 8299 and R.A. 9150, that qualify as SE under this Act shall,

consistent with Section 4 of R.A. 9150, be entitled to a share of at least ten percent (10%) of total



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procurement value of goods and services supplied to the Government, its bureaus, offices and

agencies annually

() ‘The Commission and the Department of Budget and Management shall issue the rules and
regulations that shall implement the preferential right accorded to SEs under this Section, including,
the limitations and restrictions in the application of the same.

SECTION 22. Incentives for Social investors ~ Social investors and other institutions that contribute

money or other forms of donation in the promotion and development of SEs shall be entitled to the

following tax incentives:
(a) Equity investment and donations to SEs shall be fully deductible from the gross income of

the investor

\d/or donor subject to the conditions of Section 34 (c) of Republic Act
No.8424, as amended, otherwise known as the “National Internal Revenue Code of 1997”

Provided, however, That the accreditation of the

yy the Commission under this Act shall

be sufficient; and,

(b) Donations to the SE shall be exempt from donor’s tax subject to the qualifications of
Section 101 of Republic Act No. 8424, as amended, otherwise known as the National
Internal Revenue Code of 1997": Provided, that for purposes of utilization, accreditation
granted under this Act shall be sufficient.

CHAPTER VIII

PENAL PROVISIONS
SECTION 23. Non-Compliance with the Mandatory Allocation of Credit Resources ~The BSP
shall impose administrative sanctions and other penalties on the lending institutions for non-compliance with

the provision of this Act, including a fine of not less than Five hundred thousand pesos (P500,000.00)

SECTION 24. Penalty Clause — Any person who, intentionally or by gross negligence, commits an act,

ther than the non-compliance with the mandatory allocation of credit resources as provided in the preceding
section, in violation of any provision of this Act, fails to perform his/her functions under this Act and/or
‘who shall, in any manner, commits any act to defeat any provisions of this Act shall, upon conviction, be
punished with a fine of not less than Twenty Five Thousand Pesos (P25,000.00) but not more than Fifty
‘Thousand Pesos (P50,000.00) and shall suffer imprisonment of not less than six (6) months but not more

than two (2) years, withour prejudice to being charged before a regular court for violation of the provision of

the Re

ied Penal Code, Civil Code and other pertinent laws.


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If the violation is committed by the SE or government agency, the member, officers, directors or trustees
thereof who have actually participated in, authorized, or ratified the prohibited act shall, upon conviction, be
held liable.

If the violation is committed by the employees and agents who acted in gross violation of the provisions of

this Act, the officers, directors or trustees, or incorporators of the SE shall be jointly and severally liable with

the offending employees, agents, and the enterprise.

In the case of a public official or employee, the offender shall, upon conviction, suffer the accessory penalty
of absolute disqualification.

CHAPTER IX

TRANSITORY PROVISION
SECTION. 25. Incorporation of the PRESENT Program in All Poverty Alleviation Programs of
the Government, ~ Unless circumstances warrant otherwise, all agencies of the Government implementing a

poverty alleviation program shall, in coordination with the Commission and within a period of five (5) years

but in no case longer than ten (10) years from the approval of this Act, incorporate in their perspective

poverty alleviation programs the development of SEs as a tool for poverty reduction.

‘The Commission, in coordination with the various government agencies with poverty alleviation progeams,
shall determine the appropriate beneficiaries thereof and organize them into full-fledged SEs under the
contemplation of this Act.

Within a period of 5 years, the Commission shall facilitate the development and dissemination of tools, and

invest in the development of the capability of SEs to plan, monitor and evaluate their social and financial

performance and outcomes. Further, the Commission shall evolve socially acceptable benchmarks for

evaluating the performance of SEs and incorporate such to more effectively develop and regulate the sector.

CHAPTER X

MISCELLANEOUS PROVISIONS
SECTION 26. Compliance With Other Laws that Govern the Relationship Between a SE and its
Employees —Vhe Labot Code and all other labor laws, the Social Security Act, the Medical Care Act, and all
other social legislations, and all other laws and executive orders that govern the relationship between a SE and
its employees shall apply and that all employees covered under this Act shall be entitled to the same benefits
given (o any regular employee such as social security and healthcare benefits.

SECTION 27. Congressional Oversight Committee on SE - There is hereby created Congressional

Oversight Committee on SE composed of the Chairman of the Senate Committee on Economic Affairs,

‘Trade and Commerce and the Chairman of the House Committee on Economic Affairs, Trade and Industry,


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four (4) members of the Senate and four (4) members of the House of Representatives. The members from
the Senate shall be appointed by the Senate President from among the members of the Senate Committee on

Economic Affairs, Trade and Commerce based on the proportional representation of the parties or coalition

the members from the House of Representatives shall be appointed by the Speaker from among the
members of the House Committee on Economic Affairs and Trade and Industry based on the proportional
representation of the parties or coalition therein.

The Commission shall submit to the Oversight Committee an annual report on the implem

Act.

‘The appropriation for the Oversight Committee shall be charged to the budget of both Houses of Congress
in the Annual General Appropriations Act.

SECTION 28. Appropriations - To carry out the provisions of this Act, the following amounts are
hereby appropriated :

a) The sum of One hundred million pesos ( P 100,000,000.00) is hereby appropriated as the initial
‘operating fund which sum shall be sourced from the President’s Contingent Fund and/or voluntary
contributions, grants and gifts from both local and forcign sources as may be accepted by the
Commission. In the subsequent years, the Commission shall have a separate annual appropriation
under the Office of the President which shall be provided in the General Appropriations Act starting

in the fiscal year immediately following the approval of this Act.

b) ‘The aggregate sum of Three billion pesos ( P 3,000,000,000.00 ) for ten (10) years is hereby
appropriated for the establishment of the SEDF from the share of the National Government in the
earnings of PAGCOR and from voluntary contributions, grants and gifts from both local and foreign
sources as may be accepted by the Commission, in the following manner : on the first year, One
Hundred million pesos (P_100,000,000.00 ); on the second year, One hundred fifty million pesos (P
150,000,000.00 ); on the third year, Two hundred million pesos ( P 200,000,000.00 ); on the fourth
year, Two hundred fifty million pesos ( P 250,000,000.00 ); on the fifth year, Three hundred million
pesos (P_300,000,000.00); and every year thereafter until the tenth year, Four hundred million pesos
(P 400,000,000.00 ) annually.

SECTION 29. Social Enterprise Week - In order to ins!

tute continuing, awareness on the primacy of

SEis with the poor as the primary stakeholders as a viable government strategy in pursuing poverty reduction,
the week of the month this Act shall have been signed into law shall be declared as the ‘Social Enterprise

Week’ and shall be celebrated annually. The Commission, through the NCSED I

ll be responsible in

organizing activities for the event.


1 SECTION 30. Implementing Rules and Regulations - ‘The Commission shall formulate and

2 promulgate, in consultation with the concerned sectors, the rules and regulation:

necessary to implement the
3. provisions of this Act within three (3) months from its effectivity.

4 SECTION 31. Printing and Distribution - 1) ‘Vhe National Printing Office shall publish this Act in
5 the Official Gazette in full within sixty (60) days from the date of its effectivity. Copies of this Act shall be
6 given to every department, agency, subdivision, and instrumentality of the Government, including
7 government owned and controlled corporations, regional and provincial offices, and local government units

8 SECTION 32. Information Dissemination - The Philippine Information Agency (PIA), in
9 coordination with the Commission, the DTI, DA, and the DILG, shall ensure the proper and adequate
10 information dissemination of the contents and benefits of this Act to the general public especially to its

11 intended benefi

12 CHAPTER XI
3B FINAL PROVISIONS
14 SECTION 33. Non-Impairment Clause - Nothing in this Act shall be construed as to diminish,

15 impair, or repeal rights recognized, granted or available to marginalized or basic sectors under existing laws.

16 SECTION 34. Separability Clause. - \f any provision of this Act is declared invalid or

17 unconstitutional, the provisions not affected thereby shall continue to be in full force
18 and effect

19 SECTION 35. Interpretation and Construction - In case of doubt as to the meaning of any provision

20 of this Act, or the rules and regulations issued in pursuance thereof, the same shall be resolved liberally in
21 favor of the SEs and theie stakeholders.

22 SECTION 36. Repealing Clause. ~ All laws, decrees, orders, rules and regulations or parts thereof
23 which are inconsistent with the provisions of this Act are hereby repealed or modified accordingly

24 SECTION 37. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in

25 the Official Gazette or in at |

ist two (2) national newspapers of general circulation.

Approved,