Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT 
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE POVERTY, 
ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION THROUGH SOCIAL 
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROVIDING INCENTIVES AND 
BENEFITS, AND APPROPRIATING FUNDS THEREFOR 
EXPLANATORY NOTE 
It is declared in our Constitution as 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. Also, it is declared as State 
Policy that the promotion of social justice in all phases of national development as well as in 
valuing the dignity of every human person and the full respect for human rights. To amplify 
these policies, our Constitution further stated that the goals of the national economy should 
be towards an equitable distribution of opportunities income, and wealth, a sustained increase 
in the amount of goods and services produced by the nation for the people; and an expanding 
productivity aimed in raising the quality of life for all, especially the underprivileged. 
In order to accomplish these goals, the role of enterprises in the economy as the major agent 
of development should be recognized. More importantly, in compliance with these policies, 
the creation of off-farm employment opportunities and transitional means for improving the 
livelihood of the people are instrumental in alleviating our nation. Nonetheless, the protection 
of Filipino enterprises is a foremost goal towards uplifting the plight of the people.  
Thus, this is files with the objective of promoting a poverty reduction program with an 
environment conducive to the development and growth of an effective social enterprises 
sector that adheres to the State Policy in poverty reduction, economic and social development, 
thereby establishing mechanisms essential to realizing their potential and achieving their full 
growth, and extend the assistance necessary for their advancement. To fully implement the 
objective of this bill, seeks to ordain the promotion of social enterprise as a means to alleviate 
poverty through poverty-reduction programs.  
Social Enterprise or SE is referred in this bill as a wealth-creating organization, however 
organized, whether an association, single proprietorship, partnership, corporation, 
cooperative, or any other legal form, whose primary stakeholders are marginalized sectors of 
society, engaged in providing goods and/or services that are directly related to its mission of 
improving societal well-being. It distinguishes SE from other forms of small enterprises as SE 
is established to achieve triple bottom lines such as financial, social and ecological. More 
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importantly, the role of SE is to generate profit or surplus with due regard to social and 
environmental costs, and makes a pro-active contribution to resolving social and 
environmental. 
 
For the SE to accomplish the goal of this noble legislation, incentives and benefits are given 
which includes credit windows, pool of funds and creation of a developmental trust fund. 
Further, the incentives and benefits are only given to eligible SE in order to ensure that only 
SE who has the Poor as Primary Stakeholders (SEPPS) will benefit. Thus, in the end, the social 
mission of SE will be accomplished in accordance to this bill.  
 
Furthermore, this bill has already included the latest comments and additions prepared by the 
PRESENT Coalition that were also in its Senate version. 
 
In the end, the underprivileged will be given the opportunity to alleviate themselves from their 
economic conditions, such that through SE, they will become self-sustaining and thus, a major 
contributor in the economic boom of our nation.  
 
On behalf of the people of Parañaque City’s Second District, and for the common good of the 
Filipino people, the approval of the said measure is earnestly sought. 
 
 
 
REP. GUS S. TAMBUNTING 
2nd District, Parañaque City 
 
 
 
 
 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT 
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE POVERTY, 
ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION THROUGH SOCIAL 
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROVIDING INCENTIVES AND 
BENEFITS, AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
CHAPTER I 
GENERAL PROVISIONS 
SECTION 1. Short Title. - This Act shall be known as the "Poverty Reduction Through Social 
Entrepreneurship Act." 
SECTION 2. Statement of policy. - It is declared as policy of the State for the promotion 
of a just and dynamic social order ensuring the prosperity and independence of the nation 
and freedom of 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. 
The State shall provide social justice in all phases of national development. 
As a State Policy, 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. 
The State shall promote industrialization and full employment based on sound agricultural 
development and agrarian reform, through industries that make full and efficient use of human 
and natural resources, and which are competitive in both domestic and foreign markets. 
Notwithstanding, the State shall protect Filipino enterprises against unfair foreign competition 
and trade practices.  
The state also recognizes the important role of enterprises in the economy as the major agent 
of development, creating off-farm employment opportunities and providing transitional means 
for improving the livelihood of the people.  
4911


Towards this end, the State shall pursue a poverty reduction program that promotes an 
environment conducive to the development and growth of a vibrant social enterprise sector 
engaged in poverty reduction, economic and social development. It shall empower the poor 
as primary stakeholders in social enterprises, establish mechanisms essential to realizing their 
potential and achieving their full growth, and extend the assistance necessary for their 
advancement. The State shall likewise ensure that the provision for technical and financial 
assistance, incentives and other services are free from any condition that might infringe upon 
the autonomy or organizational integrity of the social enterprises to enable them to develop 
into viable and vital anti-poverty-agents, and a strong entrepreneurship movement which will 
be instrumental in reducing poverty in the country. 
 
SECTION 3. Definition of Terms. - As used in this Act: 
 
a) 
Social Enterprise or SE refer to a wealth-creating organization, however organized, 
whether an association, single proprietorship, partnership, corporation, cooperative, or any 
other legal form, whose primary stakeholders are marginalized sectors of society, engaged in 
providing goods and/or services that are directly related to its mission of improving societal 
well-being. It is established to achieve triple bottom lines such as financial, social, and 
ecological. It generates profit or surplus with due regard to social and environmental costs, 
and makes a pro-active contribution to resolving social and environmental. 
 
A social enterprise for purposes of this Act shall mean a Social Enterprise with the Poor as 
Primary Stakeholders (SEPPS). A SEPPS is a social enterprise that explicitly declares 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/or ensures that a substantive part of the wealth 
created by the enterprise is distributed to, or benefits them. In addition to reinvesting its 
surplus or profits back to the enterprise to 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 management/governance and to become partners in community, 
sectoral and societal transformation. 
 
b) 
Absolute poverty refers to the condition of the household below the food threshold 
level; 
 
c) 
Assets refer to all kinds of properties, real or personal, owned by the social enterprise 
(SE) as defined in paragraph (dd) 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; 
 
d) 
Basic sectors shall refer to the disadvantaged sectors of the Philippine society, namely: 
farmer-peasant, artisanal fisherfolk, workers in the sector and migrant 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"; 
 
e) 
Bottom line shall refer to the objectives or purposes for which a SE is established. 
Triple bottom line shall refer to social, ecological and financial objectives; 
 


f) 
Capability building refers 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 system 
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 in no way refer to 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 16 of this Act; 
 
g) 
Civil society organizations refer to private voluntary organizations of citizens that are 
established to pursue a mission, usually involving the interest of the public, marginalized 
groups or specific sectors of society. They include non-government organizations, socio-civic 
groups, foundations and people's organizations; 
 
h) 
Council shall refer to the SE Council; 
 
i)  
Cooperative shall refer to an autonomous 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 services and accepting a fair share of the risks and 
benefits of the undertaking in accordance with universally accepted cooperative principles as 
defined in R.A. 6938, as amended by R.A 9520 otherwise known as the "Philippine Cooperative 
Code of 2008"; 
 
j) 
Corporate Social Responsibility or CSR shall refer to the commitment of a private 
enterprise or business to contribute on a voluntary basis to a sustainable social and economic 
development by working with relevant stakeholders to improve their lives in ways that are 
good for business, the social reform agenda, the sustainable development agenda, and society 
at large. CSR-related activities shall include, but not be 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 Employee and worker welfare related CSR activities; 
 
k) 
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 develop services, and distribute or provide them through market channels to final 
consumers; they may be identified by key raw material source, by finished product or final 
service 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 entrepreneurship interventions, government agencies, support institutions and SEs shall 
more effectively reach and benefit a greater number of poor in poverty reduction programs;  
 
l) 
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 directly distributing income; 
 
m) 
Fair trade shall refer to a trading partnership based on dialogue, transparency 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;  
 
n) 
Fair trade organizations shall mean enterprises certified by internationally and 
nationally recognized Fair Trade networks; 
 
o) 
Fair trade principles refer to the values adopted by fair trade organizations in their 
day-to-day operation. These include creating opportunities for economically disadvantaged 
procedures; transparency and accountability; payment of a fair price; ensuring no child labor 
and forced labor; commitment to non-discrimination, gender equity and freedom of 
association; ensuring good working conditions; providing capacity building; and, respect for 
the environment; 
 
p) 
Foundation shall mean the categorization of a non-profit organization that typically 
either donates funds and support to other organizations or provides 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 members. 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; 
 
q) 
GPPB refers to the Government Procurement Policy Board established in accordance 
with Article X of R.A.No.9184, otherwise known as the "Government Procurement Reform 
Act;"  
 
r) 
Intermediation 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 marginalized stakeholders but 
provide immediate access to services among a critical mass of these marginalized 
stakeholders;  
 
s) 
Marginalized Sectors shall refer to groups of people who are stigmatized or 
marginalized by virtue of their physical, psychological, economic, social or cultural 
circumstance; 
 
t) 
Micro-enterprise as defined in R.A No. 6977, as amended by R.A No. 9501, otherwise 
known as the "Magna Carta for Small Enterprises." shall refer to any business activity or 
enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, 
cooperative, partnership or corporation whose total assets, includes 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 
(P3,000,000.00). 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 size; 
 
u) 
Microfinance 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 businesses, to enable them to 
raise their income levels and improve their living standards; 


 
v) 
Minimum basic 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 services (basic education and literacy, 
participation in community development, family and psycho-social care);  
 
w) Non-Government Organization or NGO refers to a duly registered non-stock, non-profit 
organization focusing on the upliftment of the basic or disadvantaged sectors of society by 
providing advocacy, training, community organizing, research, access to resources, and other 
similar activities and, as defined under Section 34 (H)(2)(c) of Republic Act NO. 8424, as 
amended, otherwise known as the National Internal 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 the net income of which inures to the benefit of any private individual; 
 
x) 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.; 
 
y) Persons with Disability shall refer to individuals with restriction or different abilities, as a 
result of a mental, physical or sensory impairment, to perform an activity in the manner or 
within the range considered normal for a human being; 
 
z) 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; 
 
aa) Poverty reduction/alleviation shall mean overcoming the income, resource and capability 
deprivation among the poor as defined in the preceding paragraph and the marginalized 
sectors as defined in paragraph (q) hereof; 
 
 
bb) Private Enterprise shall refer to an organization engaged in a business activity organized 
for the purpose of accumulating profit and whose primary stakeholders and beneficiaries are 
its owners; 
 
cc) Procuring Entity refer 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 Service and Infrastructure Projects; 
 
dd) Resource mobilization strategy shall refer to a development strategy intended to generate 
income from the sale of products and services of a SE in order to finance or subsidize the 
operations of its core development program or development interventions among the 
marginalized sectors; 
 
ee) SEGFP development  refers to the SE Guarantee Fund Pool created under this Act; 
 
ff) Social development refer to the continuing process of addressing the needs of society, 
beginning with the people's minimum basic needs, through a systematic implementation of 
socioeconomic programs or packages; 


 
gg) Social Enterprise Service Institution refers to an organization that provides assistance to 
SEs for them to become viable and sustainable and which assistance pertains to supplying 
needs such as trainings, education and other capacity-building measures, research and 
development, and other similar activities; 
 
hh) 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; 
 
ii) Social entrepreneur refers to an innovative individual or institution that promotes the 
creation and operationalization of enterprises or livelihood endeavors for those in need or 
which address social problems and improve societal well-being; 
 
jj) Social entrepreneurship entails innovations designed to explicitly improve societal well-
being, housed within entrepreneurial organizations, which initiate, guide or contribute to 
change in society; 
 
kk) Social Inclusion strategy refers to the development strategy that assists groups of people 
who are stigmatized or marginalized by virtue of their physical, psychological, economic, social 
or cultural circumstance in order to restore their dignity by not only removing the barriers that 
limit their access to the delivery of basic social services and employment, but more 
importantly, by nurturing work and other environments that create avenues for their 
participation as productive members of society; 
 
ll) Social Investors are individuals or institutions that choose to put in money to a business 
endeavor or activity not principally for financial profit but to fulfill a social mission which may 
include the poverty reduction, concern for environmental protection, strong organizational 
governance, and a desire for a more economically just world; 
 
mm) Social reform refers to the continuing process of addressing the basic inequities in society 
through a systematic, unified and coordinated delivery of socioeconomic programs or 
packages; 
 
nn) Transactional roles refer to enterprise-related functions performed by the poor that 
involved an exchange of goods or services for money including being workers, suppliers, 
clients or owners; 
 
oo) Transformational 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; 
 
pp) Transactional service pertain to enterprise 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 owners. Transactional services may be free-based, such as the granting of loans, or non-
free based, such as the extension of production-related trainings; 
 
qq) Transformational services pertain to activities such as leadership formation, organizational 
development, financial and legal literacy development, asset build-up, and other educational 
and experiential learning opportunities, that empower the poor to become conscious change 
agents for themselves, for their communities, sectors and society as a whole; 


 
rr) Underemployment shall mean an economic position where an employed person's desire to 
have additional hours of 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; 
 
ss) Unemployment shall mean an economic situation where persons who are 15 years old and 
over simultaneously satisfy the following criteria: (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 secure work or set up a business; 
 
tt) Value chain refers to value-adding economic activities that an enterprise is interlinked with 
in the process of producing goods and/or service to serve its chosen market. A value chain 
typically consists of: 1) inbound distribution of or logistics, 2) manufacturing operations, 3) 
outbound distribution or logistics, 4) marketing and selling, and 5) after-sales service. These 
activities are supported by 6) purchasing or procurement, 7) research and development, 8) 
human resource development, and 9) organizational development. A SE that understands and 
manages its value chain improves its capability to create economic, environmental and social 
values towards improving the position and benefits of the or in the value chain and towards 
ensuring the viability and sustainability of the enterprise. 
 
CHAPTER II 
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES 
 
SECTION 4. Social Enterprise (SE); General Concept and Coverage. - A Social 
Enterprise (SE), for purposes of this Act, refer to a Social Enterprise with the Poor as Primary 
Stakeholders (SEPPS) as the term is defined in Sec. 3 (a) of this Act. It may be collectively 
own by the poor in the form of cooperatives, associations, or other legal form, where the poor 
are the exclusive owners or comprise a majority of the shareholders, partners or members. 
SEPPS also include NGOs or other organizations that engaged in wealth-creating activities, the 
proceeds of which are used exclusively to sustain in the fulfilment of their social mission.  
 
SECTION 5. Eligibility for Benefits and Incentives. - To be eligible for the benefits and 
incentives provided for in this Act, the SE shall: 
 
a) 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 subsector where the SE is located, including becoming worker-owners, 
suppliers-owners, supervisor and managers, active members and leaders in governing bodies 
of the SE or its allied organizations; 
 
b) invest a substance part of its surplus, profits or mobilize other resources to assist the poor 
to become partners in SE or value chain management/governance and/or to become partners 
in community, sectoral and societal transformation; 
 
c) make a pro-active contribution to resolving social and environmental problems and generate 
profit or surplus with due regard to social and environmental cost; 
 
d) employ any of the following development strategies in the pursuit of this social mission: 1) 
empowerment strategy; 2) social inclusion strategy; 3) intermediation strategy; and, resource 
mobilization strategy;  
 


e) 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; 
 
f) ensure that a substantive part of the wealth created by the enterprise is distributed to the 
poor in the form of service, dividends and other forms of benefits, and payments and 
incentives for products or services rendered consistent with the principles of fair trade; 
 
g) be duly registered with the appropriate agencies as provided under the Corporation Code 
or the Cooperative Code of the Philippines, Magna Carta for Micro, Small and Medium 
Enterprises, Barangay Micro Business Enterprises Act and other Laws.  
 
Financial sustainability shall not be a prerequisite for the availment of incentives and benefits 
under this Act. Provided that, social enterprises that not achieved financial sustainability may 
be avail of the services, assistance and incentives set forth in this Act by presenting a workable 
strategy to achieve financial sustainability over a reasonable period of time.  
 
SECTION 6. Other Eligibility Provision. - In the case of social enterprises organized as 
stock corporations, partnerships or sole proprietorships, the following additional requirements 
shall apply: 
 
 
a. A Social Enterprise organized as a stock corporation must not be a branch, subsidiary 
or division of a 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 an SE from accepting subcontracts 
from large private business enterprises or firms or from joining in cooperative or joint-
venture activities with other SEs or foundations practicing CSR.  
 
 
b. A social enterprise must not be organized a branch, subsidiary or division of a 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 of from joining in cooperative or joint-venture activities with other SEs or 
foundations practicing CSR. 
 
 
c. A social enterprise organized as stock corporations, partnerships or sole 
proprietorships, must invest at least 60% of its gross revenues to sustain the fulfilment 
of its social mission or to provide transformational services for the poor.  
 
SECTION 7. Rules and Regulations for Application and Qualification of SEPPS. - 
Within ninety (90) days from the date it is first convened, the Social Enterprise Development 
Council shall formulate the implementing rules and regulation for the application and 
accreditation of enterprises to qualify as SE under this Act, following the principles of self-
regulation, transparency and responsibility.  
 
SECTION 8. Formulation of a Poverty Reduction Through Social Entrepreneurship 
(PRESENT) program. - To promote the development of a SE sector with the poor as primary 
stakeholders, 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 
as 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 duplication and to improve the effectiveness of each program; 
 
 
c) People's participation and empowerment by mobilizing civil society organizations 
and social movement groups working with the poor; 
 
 
d) Promoting sustainable programs that reduce inequality in incomes across economic 
sectors and increase self-reliance among the poor; 
 
 
e) 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; 
 
 
f) Gender-sensitivity by ensuring women's equal rights and access to SE's resources; 
and, 
 
 
g) Development of sustainable mechanisms for the provision of quality and accessible 
social services to the poor. 
 
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, area-based, community-based and other tools and processes in local economic 
development by promoting and utilizing the economic subsector as a strategic unit of analysis 
and planning SE development interventions. 
 
The PRESENT Program shall identify and develop key SEs and resource institutions as partners 
in strategic economic subsectors that have the potential for growth and where large numbers 
of the poor are concentrated. SEs shall be developed as vehicles to ensure that the poor 
benefit the most from sustainable subsector development.  
 
PRESENT medium-term and annual development plans shall be formulated in synchrony with 
the medium-term development plan of the national government. 
 
SECTION 9. Social Enterprise Development Council. - To carry out the policy declared 
under this Act, a Social Enterprise Development Council (SEDC), hereinafter referred to as the 
Council, is hereby created as an agency attached to the Department of Trade and Industry 
(DTI). It shall be the primary agency tasked to carry out the promotion, growth and 
development of social enterprises in the country. 
 
The Council shall be composed of the following: 
 
 
a) 
Secretary of Trade and Industry, as chairperson; 
 
b) 
Secretary of Agriculture, as co-vice chairperson; 
 
c) 
Lead Convenor of the National Anti-Poverty Council (NAPC), as co-vice  
     
 
chairperson; 
 
d) 
SE sector head representative, as co-vice chairperson; 
 
e) 
Secretary Securities and Exchange Commission 
 
f) 
Chairman of the Cooperative Development Council 
 
g) 
Secretary of Social Welfare and Development; 
 
h) 
Director-General of the National Economic Development Authority (NEDA); 


 
i) 
Secretary of Finance; 
 
j) 
Secretary of Interior and Local Government; 
 
k) 
Secretary of Labor and Employment; 
 
l) 
Secretary of Science and Technology; 
 
m) 
Secretary of Education; 
 
n) 
Secretary of Agrarian Reform; 
 
o) 
Secretary of Health; 
 
p) 
Secretary of Environment and Natural Resources; 
 
q) 
Chairperson of the Cooperative Development Authority (CDA); 
 
r) 
Nine (9) representatives from SEs, three (3) representatives each from the 
main island groupings of Luzon, Visayas, and Mindanao; 
 
s) 
Three (3) representatives from SE service institutions; and 
 
t) 
Three (3) representatives from SE advocacy groups, as members. 
 
The Council shall, from time to time, call upon the participation of any government agency to 
attend in its meetings to assist in clarifying issues and finding resolution to problems that 
concern their respective offices with respect to the implementation of the PRESENT Program 
enunciated under this Act or any development program for SEs.  
 
SECTION 10. Designation of permanent Representatives to the Council. - Within 30 
days from the effectivity of this Act, Cabinet-ranked ex-officio members of the Council shall 
designate a permanent representative to the Council, to attend the meetings of the council in 
cases that the Cabinet-ranked ex-officio members cannot personally attend such meetings. 
The designated permanent representative of any of the Cabinet-ranked members of the 
Council must hold a position not lower than a bureau director. 
 
SECTION 11. Term and Appointment of SE Sector Representatives. - Within 90days 
from the effectivity of this Act, the President shall select appoint the representatives of the 
SEs from the main island groupings of Luzon, Visayas and Mindanao, the SE service 
Institutions, and the SE Advocacy Groups from among the nominees submitted by their 
respective organizations. Nominations for representatives shall be submitted within 60 days 
from the effectivity of this Act. These representatives must be conversant in the theory and 
practice of SE under this Act. 
 
Of those appointed after the effectivity of this Act, five (5) representatives, consisting of a 
representative each for Luzon SEs, Visayas SEs, Mindanao SEs, SE Service Institutions, and 
SE Advocacy Groups, shall for term for three (3) years. A second of five (5) representatives, 
with the same composition above, shall serve for a term of two (2) years, while a third group 
shall serve for a term of one (1) year.  
 
All SE representatives shall thereafter be appointed to serve for a term of three (3) years. No 
person shall be appointed to serve as an SE representative in the SEDC for more than a period 
of two (2) terms. 
 
Any vacancy in the SEDC arising from the death, incapacity, resignation, or termination of the 
term of an appointed SE representative shall filled up within 90 days from the occurrence of 
the said vacancy. All nominations to the vacancy shall be submitted within 60 days from the 
occurrence of such. In the case of a vacancy arising from death, incapacity or resignation, the 
representative appointed to the vacancy shall serve only for the remaining period of the term 
for the vacated office. 
 


SECTION 12. Powers and Functions. -  The Council 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 SE 
programs; 
 
c) Identify and access sources of financing to expand the SE sector; 
 
d) Monitor and evaluate the performance of programs and projects for appropriate 
incentives; 
 
e) Call upon any government agency to carry out and implement programs and 
projects identified by the council; 
 
f) Call upon people's organizations, non-government organizations, the academe and 
other sectors to provide advice on matters pertaining to SEs and conduct of 
transactional and transformational services to farmers, procedures, workers, 
consumers and other stakeholders; 
 
g) Submit annual and other periodic reports to the President and the Congress of the 
Philippines through the Congressional Oversight Committee; 
 
h) Promulgate such rules and regulations and exercise such other powers and 
functions as may be necessary to carry out the purposes of this Act; and  
 
i) Perform such other functions as may be necessary for its effective operations and 
the continued enhancement, growth and development of the SE sector. 
 
SECTION 13. SEDC: How Convened, Quorum, and Per Diem. Within 90 days from the 
effectivity of this Act, and upon the appointment of at least 10 representatives for the SE 
Sector, the SEDC shall be convened upon the call of its Chairperson of his permanent 
designated representative. The Council shall thereafter meet at least once every quarter, and 
may furthermore be convened for special meetings through a call of the Chairman, his 
designated permanent representative, or a majority of the Council members, as may be 
necessary.  
 
A majority of all the members of the SEDC shall constitute a quorum to do business. Provided 
that, in no case shall the SEDC be convened without the attendance of at least five (5) of the 
representatives for the SEs, SE service Institutions, and SE Advocacy Groups. 
 
The Chairperson and members of the Council shall be entitled to a reasonable per diem for 
each meeting actually attended at such amount as may be fixed by the Council in accordance 
with existing laws, rules and regulations. 
 
SECTION 14. SEDC Executive Committee. The Council may create an Executive 
Committee of seven (7) members elected by its members from among themselves or they 
designated permanent representatives, with at least three members representing the SEs, and 
with the authority to act for the Council, and within the specific authority granted by the 
Council. 
 
SECTION 15. Secretariat. - There is hereby created a Secretariat headed by an Executive 
Director and two (2) Deputy Directors, and supported by staff, whose composition shall be 
determined by the SEDC, to serve as the national, technical and administrative secretariat of 
the Council with the member agencies providing additional support staff when the need arises. 
The Secretariat shall perform the following functions: 
 


 
a) 
Provide administration support to the Council, with the assistance of the 
National Economic and Development Authority secretariat in the formulation of 
the PRESENT development programs and plans; 
 
b) 
Assist the Council in the implementation of the PRESENT development program 
and the annual and medium-term development plan; 
 
c) 
Assist the Council in the accreditation of SEs; 
 
d) 
Assist the Council in monitoring the PRESENT development programs and the 
activities of the various concerned government agencies with respect to SEs; 
 
e) 
Prepare, collate and integrate all necessary inputs to the Council's yearly report 
on the status of SEs in the country; 
 
f) 
Submit periodic reports to the Council on the progress and accomplishment of 
its work programs; and 
 
g) 
Perform other functions that may be assigned and authorized by the Council. 
 
SECTION 16. Office. - The Council 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 to carry out the powers and functions of the Council. 
 
SECTION 17. National Center of Social Enterprise Development. - There shall be 
established a National Center of Social Enterprise Development (NCSED) under the Council 
which shall perform the following functions: 
 
 
a)  
Provide SEs with capability-training and education through the Social Enterprise 
Capability Building and Sustainability Program created under Section 16 of this 
Act; 
 
b)  
Develop and enhance a research and development system which shall equip 
every SE with innovative and sustainable approaches that ensures 
improvement in the access to basic social services by the poor pursuant to 
Section 18 of this Act; and  
 
c)  
Manage a Social Enterprise Marketing Assistance Program (SMAP) that will 
ensure the generation of the highest possible income for the SEs pursuant to 
Section 19 of this Act. 
 
The NCSED shall be headed by the Executive Director of the Council Secretariat. It shall 
maintain a multi-sectoral, Multi-disciplinary pool of experts including those from the academe, 
practicing professionals, business and industry, youth, women and other concerned sectors, 
who shall be screened according to the qualifications set by the Council. 
 
The NCSED shall coordinate with the University of the Philippines Institute for Small Scale 
Industries (UP ISSI), the Technical Education and Skills Development Authority (TESDA), the 
Technology and Livelihood Resource Center (TLRC), the Department of Transportation and 
Communications (DOTC), civil society organizations and other relevant agencies, state 
universities and colleges in implementing its programs. 
 
SECTION 18. Personnel. - Subject to Civil service laws, rules and regulations, the Council 
is authorized to select, appoint, employ and fix the compensation of the officers and 
employees of the Secretariat and the NCSED as shall be necessary to carry out its functions. 
 
SECTION 19. Role of LGUs in SE Development. - Pursuant to the relevant provisions of 
R.A. No. 7160, otherwise 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 their respective jurisdictions with the end in view of 


reducing poverty therein. The LGUs are hereby mandated to include in their respective local 
development plans certain policies and programs geared the development of SEs in their 
jurisdiction.  
 
Only LGUs with viable SE development plans as incorporated in their respective local 
development plans are entitled to avail of the SE Development Fund created under the 
immediately succeeding section for the purpose of initiating and facilitating the development 
and sustainability, or otherwise assisting such SEs in their own jurisdiction: Provided, That no 
LGU shall establish and operate its own SE. Provided further, that this provision shall in no 
case be construed to prohibit LGUs from assisting in the establishment and operation of SEs. 
 
CHAPTER III 
DEVELOPMENT OF SOCIAL ENTERPRISES 
 
SECTION 20. SE Capability Building and Sustainability Program; Creation of SE 
Development Fund. - There is hereby established a SE Capability Building and Sustainability 
Program whose primary objectives is to guarantee the viability and sustainability of SEs 
through activities that advance, 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 incubation/commercialization, market studies, and product development 
competitiveness, business matching activities, trade fairs and missions, policy advocacy, 
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 
Framework Strategy on Climate Change 2010-2022 as provided for under RA 9729 or the 
Climate Change Act 2009 and RA 10121 or the Philippine Disaster Risk Reduction and 
Management Act of 2010.  
 
For this purpose, there is hereby created and established a SE Development Fund (SEDF) in 
the amount of Three Billion Pesos (P3,000,000,000.00) to be administered by the Council with 
an endowment from the earnings of the Philippine Amusement and Gaming Corporation 
(PAGCOR), in addition to appropriations by Congress, voluntary contributions, grants, gifts 
from both local and foreign sources as may accepted by the Council. Capability building 
projects approved by the Council shall be implemented by the NCSED, by itself or through 
reputable Social Enterprise Service Institutions contracted for the purpose, and acting under 
the supervision of the NCSED.  
 
Only the fruits of the SEDF shall be used for the purposes provided herein. Any undisbursed 
fruits for the preceding year shall form part of the disbursable portion of the SEDF in the 
following year. 
 
SECTION 21. Social Enterprise Research and Development System. - The Council, in 
coordination with the NEDA, DOST, and DTI and other appropriate agencies and research 
institutions, shall develop and enhance a research and development system that: 
 
 
a)  Provided studies on opportunities for poverty reduction and SE development in key 
economic subsectors and other inputs for the Council to undertake strategic 
planning for its PRESENT 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, 
 
c)  Equip SEs and support institutions with innovative and sustainable approaches to 
improve access of the poor to quality basic social services. 
 
SECTION 22. Social Enterprise Marketing Infrastructure Development. - The Council 
shall promote the development and expansion of local and foreign markets for the products 
and services of SEs, guided by the principles of fair trade. Consistent with this, the Council 
shall: 
 
 
a) Establish a SE Marketing Assistance 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 DOTC 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 Council level within one (1) year from the approval of this Act, taking into 
account existing information networks such as the internet and using a dedicated website for 
the purpose, to 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 Council shall provide technical assistance in setting up the 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 SEs 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 SEs which 
shall include the following: 
 
 
i.  
Supply data; 
 
ii. 
Demand data; 
 
iii.  
Price and Price trends; 
 
iv.  
Product standards; 
 
v. 
Directory of, but not limited to SEs, traders, key market centers, processors 
and business institutions both at the national and local levels; 
 
vi.  
Information and technology generated from research institutions; 
 
vii.  
International, regional and local market forecasts institutions; 
 
viii. 
Resource accounting data. 
 
CHAPTER IV 
INCENTIVES AND BENEFITS 
 
 
SECTION 23. Special credit Windows. - In addition to the special credit windows 
provided for the promotion of microfinance as provided under Section 16 of RA 8425, the Land 
Bank of the Philippines, Development Bank of the Philippines, Philippine Postal Bank, and Al 
Amanah Bank, are hereby mandated to set aside at least eight percent (8%) of their total 
loan portfolio based on their balance sheet in the end of the preceding quarter, and open a 
special credit window for SEs. 


 
For a period of ten (10) years from the date of the effectivity of this Act, all other lending 
institutions as defined under the Central Bank Act or the General Banking Act, as amended, 
whether public or private, shall likewise set aside at least eight percent (8%) of their total 
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 consultation with the 
Council, 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. 
 
The BSP shall establish an incentive program to encourage lending to SEs beyond the 
mandatory credit allocation such as possible reduction in bank's reserve requirement. 
 
The Council shall establish a system 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 Council on a quarterly basis a regular report on their respective 
compliance with the above provisions on the mandatory credit allocations for SEs and shall 
Act immediately on the Council's reports of non-compliance therewith. 
 
The special credit window for SEs shall bear interest lower than the market rate and shall have 
longer terms of payment and waiver of applicable fees.  
 
SECTION 24. Special Credit Window Purposes. - The special credit window provided 
under Section 19 of this Act shall be intended for the following purposes: 
 
 
a) 
Organizational developmental loan or capacity-building loan for the conduct of 
social preparation activities or the conduct of capability-building and training or 
professional development of the board, management and staff of the SE for social 
entrepreneurship, such as business planning and advisory services, technology 
intervention, incubation, market studies, and product development; 
 
b) 
Credit line for business development loan or working capital loan to cover the 
operational and management expenses of a start-up or existing business or income 
generating project, including receivable financing or purchase of additional inventory, 
soft or intangible investments such as trade fair participation or acquisition of software 
or franchise development packages; 
 
c) 
Fixed assets financing to cover acquisition of fixed assets like machineries and 
equipment, motor vehicle, or acquisition of lot for project site or construction of a plant 
and building and the improvement thereof; 
 
d) 
Value chain financing to cover any of the value chain activities such as 
production, processing and marketing; 
 
e) 
Domestic letter of credit or trust receipt to provide a stand-by credit facility for 
the SE borrower for the purchase of product inputs, equipment, machinery, 
implements, and spare parts, whereby payment of which is guaranteed and to be 
made to the seller by the lending institution, provided all documents conform with the 
terms and conditions of the credit; and  
 
f) 
Revolving Credit Line for re-lending to finance the livelihood project 
requirements of end-borrowers.  
 
SECTION 25. Eligibility for Agriculture and Fisheries Credit. - In addition to the special 
credit window provided above, at least ten percent (10%) of the funds created under Section 
6 of RA 10000, otherwise known as "The Agri-Agra Reform Credit Act of 2009," mandated to 


be set aside 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.  
 
SECTION 26. Social Enterprise Guarantee Fund Pool with Non-collateral Loans. - 
This is hereby created a social  Enterprise Guarantee Fund Pool (SEGFP) which shall be 
comprised of the five percent (5%) of the preceding year budget surplus of the government-
owned and controlled corporations and government financial institutions including the 
PAGCOR, the Philippine Charity sweepstakes Office (PCSO), the Security System (SSS), the 
Government service Insurance System (GSIS), the National Power Corporation and the 
Philippine National Oil Company  (PNOC), as contribution to the SGFP in accordance with 
relevant laws, charters and by-laws, in addition to voluntary contributions, grants and gifts 
from both local and foreign sources as may be accepted by the Council.  
 
The SEGFP shall be administered by the Council and shall be used to mitigate the risks involved 
in SE sector lending, facilitating the provision of credit therefor. The fund shall be placed in 
trust with the Land Bank of the Philippines for the purpose of providing guarantee cover to 
participating financial institutions and other parties in extending financing to SEs: Provided, 
that the fund may also be used to cover the performance bond of SEs in government 
procurement.  
 
The Council, in Coordination with the Land Bank of the Philippines, shall draw up the 
mechanics and administrative arrangement and issue the implementing guidelines for the fund 
pool.  
 
SECTION 27. Utilization of People's Development Trust Fund. - The earnings of the 
People's Development Trust Fund (PDTF) declared under Section 11 of RA 8425 may be 
utilized and accessed by the NSCED or accredited SE for the following purposes: 
 
 
a) 
Consultancy and training services for SEs and their beneficiaries on the 
establishment of the necessary support services such as financial preparation, fund 
sourcing, operation of credit and savings entities, monitoring and evaluation including 
training on marketing, financial, human resource, operational and strategic 
management; 
 
b) 
Scholarship or training grants for SE staff and officers, and selected 
beneficiaries; 
 
c) 
Community organizing for SE; 
 
d) 
SE development and capability building programs, feasibility studies and 
researches; 
 
e) 
Legal and other management support services for SEs such as registration or 
accreditation, documentation, contract review and enforcement, audit and operational 
assessment; 
 
f) 
Information dissemination of SE technology and management; and  
 
g) 
Other activities to support SEs as approved by the designated agency 
administering the PDTF. 
 
SECTION 28. Tax Exemptions. - Without prejudice to existing tax exemption provisions 
already applicable to different SEs under laws, A qualified SE shall have following tax 
exemptions: 
 
 
a) SEs with a net annual income or not more than Fifteen million pesos 
(P15,000,000.00) shall be exempt from all national, city, provincial, municipal or 
barangay taxes of whatever name and nature: Provided, That such net income shall 


be allocated for transformational services and other activities of the SE as provided 
under Section 5.g of this Act; 
 
b) VAT and other percentage taxes; 
 
c) Documentary stamp tax; 
 
d) Capital gains tax on exchanges of real property classified as capital assets or shares 
of stock; and  
 
e) For five (5) years after the effectivity of this Act, all SEs duly certified by the Council, 
consultation with the Department of Finance (DOF) and the Board of investment (BOI) 
of the DTI, shall be exempted from the payment of VAT, tariff and duties for the 
importation of all types of product inputs, equipment, machinery, implements, and 
spare parts: Provided, That these inputs, equipment, machinery, implements, and 
spare parts shall be for the exclusive use of the importing SEs and can be shown to 
be directly related to further improve the value chain operations of the SEs. 
 
The Council shall, in consultation with the DOF and the BOl, 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. 
 
For income tax purposes, a reinvestment made by a SE for the expansion of its socioeconomic 
projects within the area of its operation shall be tax deductible from the gross income.  
 
SECTION 29. Preferential Rights. - Without prejudice to preferential rights already 
available to specific enterprises or organizations under other laws, qualified SEs shall be 
accorded a preferential right in the procurement process and in the implementation of 
procurement contracts by the government in all its branches, departments, agencies, 
subdivisions, and instrumentalities, including in the government-owned and controlled 
corporations and local governments units.  
 
SEs shall be priority and preference in the following procurement processes: 
 
 
a) 
Direct contracting as provided under Section 50 of RA 9184, otherwise known 
as the "Government Procurement Reform Act," may be resorted to if the contracting 
party selling the goods and services required by the procuring entity is a social 
enterprise as certified by the Council.  
 
 
b) 
Shopping as provided under Section 52, paragraph (a) of RA 9184 may be 
resorted to when there is an unforeseen contingency requiring immediate purchase: 
Provided, that the procurement of the goods and services shall be first obtained from 
the social enterprise within the area of operation of the procuring entity which is duly 
certified by the Council as having the capacity to supply the required goods and 
services: Provided, further, That the amount shall not exceed One Hundred thousand 
Pesos (P100,000.00).  
 
 
Shopping as provided in Section 52, paragraph (b) of RA 9184 maybe resorted din the 
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 (P250,000.00): Provided, that the Procurement does not result in splitting of 
contracts: Provided, further, That a price quotations shall be first obtained from a social 
enterprise as certified by the Council as having the capacity to furnish or provide the 
required office supplies and equipment. Only in the event of failure of submission or 
absence of SE price quotation that at least three (3) price quotations from other bona 
fide suppliers shall be obtained. 


 
 
c) 
Negotiated procurement as provided under Section 53 of RA 9184 may be 
allowed when the goods or services subject of the procurement may be obtained from 
a SE within the area of operation of the procuring entity which is duly certified by the 
Council as having the capacity to supply the required goods and services. 
 
A procuring entity, when applicable, shall have at least one member representing SEs.  
 
Registered small enterprises under RA 6977 that qualify as SE under this Act shall, consistent 
with Section 4 of RA 9501, be entitled to a share of at least ten percent (10%) of total 
procurement value of goods and services supplied to the government, its bureaus and 
agencies annually. 
 
The Council shall, in coordination with the Department of Budget and management (DBM) 
and the Department of the Interior and Local Government (DILG), issue the rules and 
regulations that shall implement the preferential right accorded to SEs under this section 
including the limitations and restrictions in its application.  
 
SECTION 30. 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 investments and donations to an accredited SE shall be fully deductible 
from the gross income of the investor or donor subject to the conditions of 
Section 34 paragraph (c) of RA 8424 otherwise known as the "National Internal 
Revenue Code of 1997," as amended.  
 
b) 
Dividends or other forms of profit shares received from an accredited SE shall 
be exempt from income tax. 
 
c) 
Donations, grants and contributions to an accredited SE shall be exempt from 
donor's tax. 
 
For the purpose of availing of the tax incentives under this Section, the accreditation of the 
recipient SE by the Council shall be a sufficient evidence for qualification as a social investor 
under this Act.  
 
CHAPTER V 
APPROPRIATION AND OTHER PROVISIONS 
 
SECTION 31. Appropriations. - To carry out the provisions of this Act, the following amounts 
are appropriated as follows:  
 
 
a) 
The sum of One hundred million pesos (P100,000,000.00) is hereby 
appropriated as the initial operating fund which sum shall be sourced from the 
President's Contingent Fund and voluntary contributions, grants and gifts from both 
local and foreign sources as may be accepted by the Council. In the subsequent years, 
the Council shall have a separate annual appropriation under the DTI which shall be 
included in the annual General Appropriations Act starting in the fiscal year 
immediately following the approval of this Act.  
 
 
b) 
The aggregate sum of Three billion pesos (P3,000,000,000.00) for ten (10) 
years is hereby appropriated for the establishment of the SEDF from the share of the 
national government in the earnings of the PAGCOR and from voluntary contributions, 


grants and gifts from both local and foreign sources as may be accepted by the Council, 
in the following manner: on the first year, One hundred million pesos 
(P100,000,000.00); on the second year, One hundred fifty million pesos 
(P150,000,000.00); on the third year, two hundred million pesos (P200,000,000.00); 
on the fourth year, two hundred fifty million pesos (P250,000,000.00); on the fifth 
year, Three hundred million pesos (P300,000,000.00); and every year thereafter until 
the tenth year, Five hundred million pesos (P500,000,000.00) annually. 
 
SECTION 32. Penalty Clause. - The penalty of imprisonment for not less than six (6) 
months but not more than two (2) years or a fine of not less than Twenty-five thousand pesos 
(P25,000.00) but not more than Fifty thousand pesos (P50,000.00), or both imprisonment and 
fine, at the discretion of the court, shall be imposed upon any person, corporation, government 
entity or agency who, intentionally or by gross negligence, fails to provide the benefits, rights 
and incentives granted to SE in violation of this Act, or perform any act in violation of its 
provisions. 
 
If the violation is committed by the SE or a government agency, the members, officers, 
directors or trustees thereof who are directly involved shall be held liable therefor. 
 
If the violation is committed by the employment 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.  
 
If the offender is a public or employee, the offender shall, upon conviction, suffer the 
necessary penalty of absolute disqualification.  
 
SECTION 33. Non-Compliance with the Mandatory Allocation of Credit Resources. 
- Administrative sanctions including a fine of not less than Five Hundred Thousand Pesos 
(P500,000.00) shall be imposed by the Banko Sentral ng Pilipinas upon any banking or lending 
institution who fails to provide the credit allocations granted to SE in violation of Section 19 
of this Act. 
 
SECTION 34. Non-Impairment Clause. - Nothing in this Act shall be construed to diminish, 
impair, or repeal the rights granted to marginalized sectors under existing laws.   
 
SECTION 35. Information Dissemination. - The Philippine Information Agency (PIA), 
shall in coordination with the Council, the DTI, DA, and the DILG, ensure the proper and 
adequate information dissemination of the contents and benefits of this Act to the general 
public especially to its intended beneficiaries. 
 
Within sixty days (60) after its effectivity, the Council shall distribute copies of this Act to every 
department, agency, subdivision, and instrumentality of the government, including 
government-owned and controlled corporations, regional and provincial offices, and local 
governments. 
 
All duly accredited SEs shall be given one (1) copy of this Act at cost. Thereafter, every newly 
accredited SE shall be issued a copy of this Act together with the rules and regulations 
promulgated pursuant to this Act. 
 
SECTION 36. PRESENT Program in Government. - All agencies of the government 
implementing a poverty alleviation program shall, in coordination with the Council and within 
a period of five (5) years but in no case longer than ten (10) years from the approval of this 


Act, incorporate the PRESENT Program in their respective poverty alleviation programs as a 
tool for poverty reduction.  
 
The Council shall, in coordination with the various government agencies with poverty 
alleviation programs, prepare the appropriate beneficiaries thereof and organize them into 
full-fledged SEs under the contemplation of this Act. 
 
Within a period of five (5) years, the Council shall facilities 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. The Council shall evolve socially 
acceptable benchmarks for evaluating the performance of SEs and incorporate them to 
effectively develop and regulate the sector.  
 
SECTION 37. Social Entrepreneurship Education in Schools. - Toward strategically 
developing the nation's human resource capability in social entrepreneurship, the DepEd and 
the CHED shall cause the integration of SE content and inclusion of SE courses in the curricula 
at all levels, especially in the secondary and tertiary levels. This shall be part of the SE 
Capability Building and Sustainability Program stated in Sec. 6 of this Act. 
 
A continuing social entrepreneurship education program for primary and secondary education 
shall include information regarding: 
 
 
a) 
social issues and civic ways of addressing them 
 
b) 
the producer as a steward of natural resources 
 
c) 
the consumer as a responsible member of society and his responsibility to 
develop critical awareness which is the responsibility to be alert and 
questioning about the environmental and social impacts of the goods and 
services he/she uses; 
 
 
 
c.1) 
social concern which is the responsibility to be aware of the impact of 
his consumption to society, especially the disadvantaged; and 
 
 
 
c.2) 
environmental awareness which is the responsibility to understand the 
environmental consequences of his use of natural resources, consumption, 
recognizing his individual an social responsibility to conserve natural resources 
for future generations; 
 
All higher learning institutions and vocational schools are mandated to include a subject on 
social entrepreneurship in their social studies program or in their business, commerce, or 
economics courses. 
 
SECTION 38. Applicability of Other Laws. - The Labor Code and all other laws, the Social 
Security Act, the Medical Care Act, other social legislations, and all other laws and executive 
orders that govern the relationship between the employer and the employee shall apply to SE 
and its employees and that all employees covered under this Act shall be entitled to the same 
benefits given to any regular employee such as social security and healthcare benefits. 
 
SECTION 39. Interpretation and Construction. - In case of doubt in the meaning of nay 
provision of this Act or in the rules and regulations promulgated pursuant to this Act, it shall 
be resolved in favor of SE and their stakeholders. 
 


SECTION 40. Congressional Oversight Committee. - There is hereby created a 
Congressional Oversight Committee on Social Enterprises composed of the Chairman of the 
Senate Committee on Economic Affairs, Trade and Commerce and the Chairman of the House 
Committee on Trade and Industry, 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 coalition therein. The members 
from the House of Representatives shall be appointed by the Speaker from among the 
members of the House committee on Trade and Industry based on the proportional 
representation of the parties or coalitions therein. 
 
 
The Oversight Committee, upon review and approval of the Implementing Rules and 
Regulations of this Act shall become functus officio and thereafter cease to exist: Provided, 
however, That the Council shall submit to the Committee on Economic Affairs, Trade and 
Commerce of the Senate and the Committee on Trade and Industry of the House of 
Representatives an annual report on the implementation of this 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 41. Social Enterprise Week. - In order to institute continuing awareness on the 
importance of SEs as a viable government strategy in pursuing poverty alleviation, the week 
of the month when this Act shall have been signed into law shall be declared as the "Social 
Enterprise Week" and shall be celebrated annually. The Council shall, through the NCSED, be 
responsible in organizing activities for the event. 
 
CHAPTER VI 
FINAL PROVISIONS 
 
SECTION 42. Implementing Rules and Regulations. - Within ninety (90) days from the 
effectivity of this Act, the Secretary of Trade and Industry shall, in consultation and 
coordination with the concerned government agencies and sector, promulgate the necessary 
rules and regulations for the effective implementation of this Act. 
 
SECTION 43. Separability Clause. - If any provision or part of this Act is declared invalid 
or unconstitutional, the remaining parts or provisions not effected shall remain in full force 
and effect. 
 
SECTION 44. Repealing Clause. - For purposes of this Act, Section 11 of RA 8425 and 
Sections 50, 52 and 53 of RA 9184 which are inconsistent with this Act are hereby deemed 
amended. All other laws, executive orders, presidential decrees, rules and regulation or parts 
thereof inconsistent with any provisions of this Act are hereby repealed, amended or modified 
accordingly. 
 
SECTION 45. Effectivity. - This Act shall take effect fifteen (15) days after its publication 
in the official Gazette or in two (2) national newspapers of general circulation. 
 
Approved,