SIXTEENTH CONGRESS 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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SENA.l~ 
S.B.No. ~~10 
(In substitution of Senate Bill No. 1026) 
SCl1?fte 
<f}tfur uf Ule: ~rrrrt3fU 
'14 
MAY -6 PS:43 
Submitted by the Committee on Trade, Commerce and Entrepreneurship joint with 
the Committees on Social Justice, Welfare and Rurai Development; Ways and Means; 
and Finance, with Senator Aquino IV as author thereof. 
AN ACT 
INSTITUTIONALIZING THE POVERTY REDUCTION THROUGH SOCIAL 
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROMOTING SOCIAL ENTERPRISES 
WITH THE POOR AS PRIMARY STAKEHOLPERS 
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Be it enacted by the Senate and House of Representatives of the Philippines in 
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Congress assembled: 
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SECTION 1. Short Title - This Act shall be known as the "Poverty Reduction Through Social 
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Entrepreneurship (PRESENT) Act." 
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SECTION 2. Declaration of Policy. - The State shall promote a just and dynamic social order 
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that will ensure the prosperity and independence of the nation and free the people from 
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poverty through policies that provide adequate social services, promote full employment, a 
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rising standard of living, and an improved quality of life for all. The State shall prOVide 
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social justice in all phases of national development and that the State values the dignity of 
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every human person and guarantees full respect for human rights. 
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The goals of the national economy are a more equitable distribution of 
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opportunities, income, and wealth; a sustained increase in the amount of goods and services 
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produced by the nation for the benefit of the people; and an expanding productivity as the 
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key to raising the quality of life for all, especially the underprivileged. The State shall 
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promote industrialization and full employment based on sound agricultural development 
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and agrarian reform, through industries that make full and efficient use of human and 
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natural resources, and which are competitive in both domestic and foreign markets. 
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The State also recognizes the important role of enterprises in the economy as the 
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major agent of development, creating off-farm employment opportunities and providing 
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transitional means for improving the livelihood of the people. 
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Towards this end, the State shall pursue an inclusive growth strategy that promotes 
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an environment conducive to the development and growth of a vibrant social enterprise 
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sector engaged in poverty reduction, economic and social development. It shall empower 
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the poor as primary stakeholders in social enterprises, establish mechanisms essential to 
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realizing their potential and achieving their full growth, and extend the as~ista~ce necessary 
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for their advancement. The State shall likewise provide technical and financial assistance, 
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incentives and other services to enable Social Enterprises to develop into viable and vital 
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anti-poverty agents, and a strong social entrepreneurship movement that will be 
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instrumental in reducing poverty in the country. 
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SECTION 3, Definition of Terms. -
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a) A "Social Enterprise" or SE shall refer to a social mission-driven organization that 
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conducts economic activities providing goods and services directly related to their 
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primary mission of improving the well-being of the poor, basic and marginalized 
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sectors and their living environment. A social enterprise explicitly declares and 
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pursues poverty reduction as its principal objective by purposefully rendering both 
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transactional and transformational services. An SE engages and invests in the poor 
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to become effective workers, suppliers, clients and/or o'wners and ensures that a 
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substantive part of the wealth created by the enterprise is distributed to or benefits 
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them. In addition to reinvesting its surplus or profits back to the enterprise to 
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sustain the fulfillment of its social mission, a SE also uses it surplus or profits and 
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mobilizes other resources to assist the poor to become partners in SE or value chain 
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management and governance and to become partners in community, sectoral and 
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societal transformation. 
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b) "Government· Procuring Entity" refers to any branch, department, office, agency, or 
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instrumentality of the government, including state universities and colleges, 
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government-owned and/or -
controlled corporations, government financial 
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institutions, and local government units procuring Goods, Consulting Services and 
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Infrastructure Projects; 
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c) "Basic Sectors," as defined by Republic Act 8425, or the "Social Reform and Poverty 
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Alleviation Act," refer to the disadvantaged sectors of Philippine society, namely: 
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farmer-peasant, artisanal fisherfolk, workers in the formal sector and migrant 
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workers, workers in the informal. sector, indigenous peoples and cultural 
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communities, women, persons with disabilities, senior citizens, victims of calamities 
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and disasters, youth and students, children, and urban poor; 
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d) "Economic Subsectors" refer to networks of related actors ,and enterprises 
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performing various functions in value chains. 
These actors and enterprises 
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transform raw materials into finished products, or develop services, and distribute 
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or provide them through market channels to final consumers; they may be identified 
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by key raw material source, by finished product or final service provided. An 
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economic subsector may be comprised of several competing value chains. 
By 
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understanding the dynamics of economic subsectors and using them as units of 
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planning social entrepreneurship interventions, government agencies, support 
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institutions and SEs shall more effectively reach and benefit a greater number of 
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poor in poverty reduction programs 
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e) "Marginalized Sectors" refer to groups of people who are stigmatized or excluded by 
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virtue of their physical, psychological, economic, social or cultural circumstance; 
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f) 
"Poor," as defined by Republic Act 8425, refers to individuals and families whose 
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income fall below the poverty threshold as defined by the National Economic and 
Development Authority and/or cannot afford in a sustained manner to provide their 
minimum basic needs of food, health, education, housing and other essential 
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amenities of life; 
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g) "Poverty Reduction" shall mean overcoming the income, resource and capability 
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deprivation among the poor, basic and marginalized sectors; 
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h) "Social Enterprise Service Institution" refers to an organization that provides 
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assistance to SEs for them to become viable and sustainable and which assistance 
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pertains to supplying needs such as trainings, education and other capacity-building 
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measures, research and development, and other similar a~tivities; 
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i) "Transactional Services" refer to enterprise or market-driven activities, such as 
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providing loans, demonstrating new technologies or conducting trainings that are 
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necessary for the poor in the SE system to effectively and efficiently perform their 
roles as workers, suppliers, clients and owners. Transactional services may be fee-
based, such as the granting of loans, or non-fee based, such as the extension of 
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production-related trainings; 
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j) 
"Transformative Services" refer to activities that empower the poor, such as 
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leadership formation and organizational development, asset build-up and providing 
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education and experiential learning opportunities, to become conscious change 
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agents for themselves, for their communities, sectors and society as a whole. 
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k) "Value Chains" refer to value-adding economic activities that an enterprise is 
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interlinked with in the process of producing goods and/or services to serve its 
chosen market. A value chain typically consists of: 1) raw materials processing, 2) 
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inbound distribution or logistics, 3) manufacturing operations, 4) outbound 
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distribution or logistics, 5) marketing and'selling, and 6) after-sales service. These 
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activities are supported by 6) purchasing or procurement, 7) research and 
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development, 8) human resource development, and 9) organizational development. 
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A SE that understands and manages its value chain improves ·its capability to create 
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economic, environmental and social values towards improving the position and 
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benefits of the poor in the value chain and towards ensuring the viability and 
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sustain ability of the enterprise. 
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SECTION 4, Formulation of a Poverty Reduction Through Social Entrepreneurship (PRESENT) 
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Program. - The PRESENT Program shall be established as a flagship program of government. 
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The objective of the PRESENT Program is to progressively improve the position and 
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benefits derived by a big number of the poor, marginalized and basic sectors derived from 
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economic subsector development and growth. It shall do this by identifying strategic 
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economic subsectors with the potentials for growth and where the poor are concentrated or 
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could be major players. In the process, it shall identify and develop key SEs and resource 
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institutions as partners in providing transactional and transformational services towards 
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poverty reduction. SEs shall be developed as vehicles to ensure that the poor benefit the 
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most from sustainable subsector development. 
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The formulation of the PRESENT program shall be guided by the following 
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principles: 
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a) Promoting sustainable programs that support the development of inclusive value 
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chains in key economic subsectors, towards reducing inequality in incomes and 
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increase self-reliance among the poor; 
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b) Enabling SEs to overcome constraints and to take advantage of opportunities for 
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enhancing the position and benefits of the poor and their living environments; 
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c) Development of sustainable mechanisms for the provision of quality and accessible 
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social services to the poor. 
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d) People's empowerment by ensuring the participation of the poor, basic and 
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marginalized sectors; 
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e) Gender-sensitivity by ensuring women's equal rights and access to SE's resources; 
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1) 
Ecological soundness in the pursuit of sustainable and equitable development; 
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g) Incorporation of the PRESENT Program in the government's poverty reduction 
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drive as a major sustainable and comprehensive strategy; and 
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h) Rationalization of poverty reduction programs by streamlining and coordinating the 
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various anti-poverty programs of the government to reduce inefficiency and 
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duplication and to improve the effectiveness of each program. 
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The planning framework of the PRESENT Program and its planning process shall 
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ensure that the poor are engaged as primary stakeholders. It shall add value and 
complement ecosystem-based, area-based, community-based and other tools and processes 
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in local economic development by promoting and utilizing the economic subsector as a 
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strategic unit of analysis and planning SE development interventions. 
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PRESENT medium-term and annual development plans shall be formulated in 
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synchrony with the medium-term development plan of the national government. 
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SECTION 5, National Enterprise Development Council. - The existing Micro, Small and 
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Medium Enterprise Development (MSMED) Council, which is an attached agency of the 
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Department of Trade and Industry, shall be strengthened and expanded to effectively spur 
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the growth and development of MSMES and SEs throughout the country, and to carry out 
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the policy declared under this Act. It shall now be known as the National Enterprise 
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Development Council, herein referred to as the Council. 
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In addition to the existing functions of the Council as provided under Republic Act. 
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9501, "The Magna Carta for Micro, Small and Medium Enterprises," as amended, the Council 
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shall serve as the primary agency tasked to carry out the promotion, growth and 
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development of social enterprises in the country. To ensure that the Council is able to fulfill 
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its additional mandate, there shall be an SE Committee under the Council that shall perform 
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the following specific duties: 
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a) Promote social enterprise as a key strategy for reducing poverty and enabling 
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inclusive growth; 
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b) Provide oversight for the implementation of the PRESENT Program and activities of 
the Center for Social Enterprise Development (CSED): 
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c) Establish policies, plans, programs and projects to develop and promote SE as a tool 
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for poverty reduction as part of a comprehensive SOCial Enterprise Development 
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Plan fully integrated and consistent with national development objectives and plans; 
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d) Monitor and evaluate the performance of programs and projects of CSED for 
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appropriate incentives; 
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e) Submit annual and other periodiC reports to the President and the Congress of the 
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Philippines; 
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f) 
Promulgate such rules and regulations and exercise such other powers and 
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functions as may be necessary to carry out the purposes of this Act; and 
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g) Perform such other functions as may be necessary for its effective operations and 
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the continued enhancement, growth and development of the SE sector. 
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The SE Committee shall be composed of the relevant council members and 
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representatives from ·the SE sector and SE service institutions as determined by the Council 
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to realize these powers and functions. 
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SECTION 6. Center for Social Enterprise Development - There shall be established a Center 
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for Social Enterprise Development (CSED) under the supervision of the Council and to be to 
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be headed by an Executive Director, which shall have the primary responsibility of 
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implementing comprehensive policies for Social Enterprise Development. Specifically, the 
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CSED shall be responsible for: 
a) The development and implementation of the PRESENT Program as approved by the 
Council, with the following components: 
1. Formulation and implementation of social enterpreneurship-oriented 
strategic economic sub-sector' development plans that shall serve as the 
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basis for major policies, projects and activities. 
2. Capacity Building and Sustainability - The CSED· will work with qualified 
Social Enterprise Service Institutions and other intermediaries to design and 
deliver training and education in social entrepreneurship development, 
institutional start-up or 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 incubation/commercialization, market studies, and product 
development competitiveness, business matching activities, trade fairs and 
missions, policy advocacy, disaster-resiliency and other related activities. 
3. Research and Development - The CSED in coordination with the NEDA, DOST, 
DTI, 
and 
other 
appropriate 
agencies, 
research 
institutions, 
and 
intermediaries, shall develop and enhance a research and development 
system that: 
i. provides studies on opportunities for poverty reduction and SE 
development in key economic subsectors and other inputs for the 
Council to undertake strategic planning for programs and projects; 
ii. equip SEs and support institutions with services and technologies that 
are appropriate for enhanCing the participation and benefits of the 
poor in various economic subsectors; and; 
iii. equip SEs and st;Ipport institutions with innovative. and sustainable 
approaches to improve access of the poor to quality basic social 
services. 
4. Information and Marketing Assistance - The CSED shall promote the 
development and expansion of local and foreign markets for the products 
and services of SEs. Towards this, the CSED shall: 
i. establish a marketing assistance program 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; and 
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ii. develop, install and sustain a market information system for SEs with 
the assistance of the DTI and DOTe. All government departments, 
agencies, bureaus, research institutions, as well as the Local 
Government Units (LGUs) shall consolidate and continuously update all 
relevant information and data that would be of use to SEs on a periodic 
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basis and make such data available in a dedicated website on the 
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internet. 
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b) Establishment and implementation of criteria and process for the qualification of 
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SEs that shall be eligible for support and other incentives as provided by this Act and 
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as approved by the Council; 
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c) Identification of sources of financing for the SE sector not limited to grants, loans 
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and equity financing for enterprise incubation, start-up and expansion; 
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d) Management of multi-stakeholder convergence programs and activities among 
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government agencies and private organizations in support of the PRESENT Program; 
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e) Coordination with the concerned government agencies and local government units 
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in the development and implementation of the PRESENT Program and projects. 
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Other government agencies and LGUs shail be encouraged to work with SEs in the 
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furtherance of the PRESENT Program; and 
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f) 
Coordination with social enterprise stakeholders, including people's organizations, 
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non-government organizations, and multi-sectoral and multi-disciplinary pool of 
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experts from the academe, practicing professionals, business, industry, youth, 
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women and and other concerned sectors to provide advice and technical assistance 
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on matters pertaining to SEs. 
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SECTION 7. Social Enterprise Development Fund. - There shall be included in the budget of 
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the DTI under the annual General Appropriations Act an initial amount of Five Hundred 
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Million Pesos (PSOO,OOO,OOO.OO) for the establishment of a Social Enterprise Development 
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Fund (SEDF) to support the capacity building and sustainability component of the PRESENT 
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Program. 
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After the first year of implementation, such sums as may be necessary to fund the 
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SEDF shall be included in the budget of the DTI under the annual General Appropriations 
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Act. 
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Plans for the utilization of the SEDF shall be developed by the CSED for approval by 
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the Council. 
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SECTION 8. Special Credit Windows, - The Land Bank of the Philippines, Development B<lnk 
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of the Philippines and other government financial institutions shall establish special credit 
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windows that shall provide SEs with risk-based, non-collateralized loans for the following 
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purposes: 
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a) Credit line for business development loan or working capital loan to cover the 
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operational and management expenses of an existing business or income generating 
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project, induding receivable financing or purchase of additional inventory, soft or 
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intangible investments such as trade fair participation or acquisition of software or 
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franchise development packages; 
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b) Fixed assets financing to cover acquisition of fixed assets like machineries and 
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equipment, motor vehicle, or acqUisition of lot for project site or construction of a 
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plant and building and the improvement thereof; 
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c) Value chain financing to cover any of the value chain activities such as production, 
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processing and marketing; 
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d) Domestic letter of credit or trust receipt to provide a stand-by credit facility for the 
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SE borrower for the purchase of product inputs, equipment, machinery, implements, 
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and spare parts, whereby payment of which is guaranteed and to be made to the 
, 
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seller by the lending institution, proVided all documents conform with the terms and 
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conditions of the credit; and 
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e) Revolving Credit Line for re-lending to finance the livelihood project requirements 
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of end-borrowers, 
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SECTION 9, Social Enterprise Guarantee and Surety Fund, - There shall be established a 
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Social Enterprise Guarantee and Surety Fund (SEGSF) which shall be funded from equity 
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contributions of government financial institutions, The SEGSF shall be administered by the 
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Philippine Guarantee Corporation (Philguarantee) to enable SEs to access non-
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collateralized and other appropriate financing while mitigating the risks involved in SE 
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sector lending, The SEGSF shall be used to provide guarantee cover to participating financial 
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institutions and other parties in extending finanCing to SEs: Provided, That the fund may 
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also be used to cover the performance bond of SEs for their transactions, 
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SECTION 10. Compliance to Mandatory Allocation of Credit Resources. - Loans granted by 
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financial institutions to Social Enterprises shall be computed by the Bangko Sentral ng 
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Pilipinas as twice the loan amount for purposes of determining financial institutions' 
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compliance to the mandatory allocation of credit resources to micro, small and medium 
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enterprises under Republic Act. 9501. "The Magna Carta for Micro, Small and Medium 
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Enterprises." 
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SECTION 11. Movable Collateral Regi~try. - The Land Registration Administration (LRA), 
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through the Registry of Deeds, shall set-up and establish wIthin two (2) years from the 
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effectivity of this Act a comprehensive, centralized, internet-based electronic Movable 
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Collateral Registry to encourage financial institutions such as banks, credit cooperatives, 
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and microfinance institutions to accept a broad range of assets, in lieu of land and real 
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property, as collateral to secure loans granted to micro, small and medium enterprises, 
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particularly social enterprises. The collateralized assets may be !n the form of sales invoice, 
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receivables, purchase orders, contracts, equipment, machinery, que dan, inventory, raw 
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materials, patents, and such other assets of similar nature. 
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The Movable Collateral Registry, which shall replace the existing chattel mortgage 
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registry, should be simple, accurate, transparent and easily accessible. A uniform nominal 
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flat fee shall be charged for registration to cover the cost of operation and maintenance of 
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the Registry and shall, in no way, be based on the amount of the loan, asset or transaction. 
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For purposes of registering a movable collateral, documents covering the transaction shall 
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not be required but only specific details of the offered collateral and such other information 
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as may be determined by the LRA will suffice for purposes of registering a movable 
collateral. 
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The Department of Justice (~O)) and the LRA shall ensure that the security interests 
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oflenders over the movable collateral shall be protected, and shall establish an efficient and 
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timely system for the enforcement of such rights. 
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SECTION 1Z. Public Procurement for Social Enterprises. - The Government Procurement 
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Policy Board (GPPB) shall facilitate the full partiCipation of social enterprises in public 
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procurement processes. In support of this provision, the OHM shah direct key agencies of 
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government to allocate at least Ten Percent (10%) of their annual budgets specifically for 
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projects to be procured from social enterprises. 
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SECTION 13. Insurance for Social Enterprises. - The Insurance Commission shall issue the 
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necessary rules and regulations and implement measures to ensure that the insurance 
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industry shall provide insurance products, both life and non-life, for social enterprises and 
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their stakeholders among the poor. Furthermore, social enterprises shall be eligible to be 
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licensed agents or delivery channels for their clients and constItuents. 
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SECTION 14. 
Eligibility for Benefits and Incentives. 
In the case of social enterprises 
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organized as stock corporations, partnerships or sole proprietorships, the following 
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requirements shall apply to become eligible for benefits and incentives provided by this Act: 
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a) A social enterprise must not be organized as a branch, subsidiary or division of a 
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private business enterprise, regardless of the size of such private business 
enterprise, nor may its policies be determined by a private business enterprise. 
Provided, that this shall not preclude a SE from accepting subcontracts from large 
private business enterprises or firms or fram joining in cooperative Dr jOint-venture 
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activities with otber SEs or foundations practicing Corporate Social Responsibility 
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(CSR). 
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b) At least sixty percent (60%) of a social enterprise's total expenditures must directly 
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accrue to the fulfillment of its social mission or to provide transformational services 
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for the poor. 
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SECTION 15. Social Entrepreneurship Education in Schools. -
Toward strategically 
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developing the nation's human resource capability in social entrepreneurship, the DepEd 
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and the CHED shall cause the integration of SE content and inclusion of SE courses in .the 
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curricula at all levels, especially in the secondary and tertiary levels. A continuing social 
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entrepreneurship education program for out-of-school youth and adults shall likewise be 
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developed and undertaken. 
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SECTION 16. Social Enterprise Week. - In order to institute continuing awareness on the 
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importance of SEs as a viable government strategy in pursuing poverty alleviation, the week 
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of the month when this Act shall have been signed into law shall be declared as the "Social 
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Enterprise Week" and shall be celebrated annually. The Council shall, through the CSED, be 
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responsible in organizing activities for the event. 
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SECTION 17. Appropriations. - The Council shall allocate the initial amount of Fifty Million 
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Pesos (PSO,OOO,OOO.OO) from the existing MSMED Council Fund to support the operations 
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and programs of the CSED. Thereafter, such S\lms as may be necessary for the continued 
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implementation of this Act shall be included in the budget of the DTl under the annual 
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General Appropriations Act. 
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The budgetary requirements ?f the cooperating agencies shall be, incorporated in 
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their respective budgets. The CSED may raise funds from other sources for specific projects 
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as may be authorized by law. 
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SECTION 18. Implementing Rules and Regulations. - Within ninety (90) days from the 
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effectivity of this Act, the Secretary of Trade and Industry shall, in consultation and 
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coordination with the concerned government agencies, promulgate the necessary rules and 
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regulations for the effective implementation of this Act. 
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SECTION 19, Separability Clause. - If any provision or part of this Act is declared invalid or 
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unconstitutional, the remaining parts or provisions not affected shall remain in full force 
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and effect. 
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SECTION 20. Repealing Clause. - All laws decrees, ordinances, rules and regulations, 
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executive order or administrative order and other presidential issuances inconsistent in 
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this act are hereby repealed, amended or modified accordingly. 
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SECTION 21, Effectivity. - This Act shall take effect fifteen (15) days after its publication in 
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the Official Gazette or in two (2) national newspapers of general circulation. 
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Approved, 
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