NINETEENTH CONGRESS OF THE PHILIPPINES 
REPUBLIC OF THE PHILIPPINES
First Regular Session
S. B. No. B5
RECEIVED m
DATE
BILLS
INDEX
INTRODUCED BY SENATOR ALAN PETER "COMPANERO” S. CAYETANO
AN ACT
INSTITUTIONALIZING MICROFINANCE PROGRAMS AND ACCESS TO CAPITAL TO 
SUPPORT AND GROW MICRO ENTERPRISES, APPROPRIATING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
''Ifyou are faithful in little things, you will be faithful in large ones.,."
Luke 16:10 (NLT)
Many Filipinos have the talent, skill, drive, and perseverance to run a good 
business. However, the lack of access to capital and affordable financing limits their 
opportunity to start their own business, and the same impediment hinder those who 
currently have businesses to expand.
Ka Santi is a new landowner under the Comprehensive Agrarian Reform 
Program (CARP). After several years of struggle, he and the members of his 
organization finally received their Certificate of Land Ownership Awards (CLOA). 
They were at first elated by the victory, but disconcerted to find out that the support 
services provided by the government were insufficient to make the land productive. 
They needed cash to buy farm implements and seeds. Local loan sharks, smelling an 
opportunity, descended into the village offering easy cash loans to the farmers at very 
high interest rates. They required the farmers to give their titles as collateral, a 
practice considered illegal under the law but widely done under-the-table in rural 
areas of the country. Struggling with the onerous repayment scheme of the loan 
sharks and encountering a major setback when one of his daughters fell ill, Ka Santi 
defaulted on his payment. Immediately, the loan shark pounced on him and took over 
control and cultivation of the land.
Aling Connie is a carinderia owner in one of the back alleys of downtown 
Manila, at the heart of the university belt. Her very affordable yet filling meals were 
the main draw of her nondescript eatery, and students were her main clientele. One 
day, however, a convenience store chain opened a branch right across her carinderia, 
its neon lights enticing students to try hot meals in an air-conditioned atmosphere. 
The decrease in client base, coupled with the fact that 1/3 of daily profits of her 
carinderia are surrendered to a motorcycle-riding collector at the end of the day, was


too much for Aling Connie. After nearly fifteen years, she made a decision to close 
shop.
Much has been said about micro-enterprises as drivers of economic growth. In 
the Philippines, the tremendous economic impact of MSMEs is readily observable. The 
2020 List of Establishments of the Philippine Statistics Authority (PSA) recorded a 
total of 957,620 registered business enterprises operating in the country. Of these, 
952,969 (99.51%) are MSMEs and 4,651 (0.49%) are large enterprises. Micro 
enterprises constitute 88.77% (850,127) of total MSMEs, followed by small 
enterprises at 10.25% (98,126) and medium enterprises at 0.49% (4,716). In terms 
of value added, the MSME sector contributed 35.7% of the total with manufacturing 
contributing the largest share of 6.87%. Wholesale and retail trade and repair 
contributed 6.58% followed by financial intermediation with a share of 6%. Within 
the sector, small enterprises accounted for the largest share of 20.5%. Medium 
enterprises followed with a share of 10.3% while micro enterprises registered a share 
of 4.9%. Among small enterprises, wholesale and retail trade and repair contributed 
the most with a share of 4.07% followed by manufacturing with a share of 3.82% 
while financial intermediation was next with a share of 3.35%.1
Despite these important contributions, MSMEs and our micro-entrepreneurs 
are not provided adequate assistance by the government. The Philippines stands as 
a completely unique country in the world in more ways than one. In terms of its social 
and economic system, no other country has as extensive a grassroots business like 
ours. For instance, there are some 1,300,000 sari-sari stores nationwide and are 
visited by 94% of the population.2 A common part of the Filipino life, the sari-sari 
store is an innovative business venture that generates income with a minimal capital 
outlay.
The mushrooming of micro enterprises has significantly afforded livelihood 
opportunities especially for struggling Filipino households. Retail stores, widely 
known as sari-sari stores have flourished in the Philippines. Sari-sari stores are 
Micro Enterprises. Economic research shows that a robust MSME sector could bring 
higher income growth, greater employment of domestic resources, more gainful 
integration with global and regional trade and investment, and greater equity in 
access, distribution and development.3 In many countries who have exhibited 
exceptional economic growth in recent years, MSMEs are a big part of their economic 
success.4
Despite their contributions to the economy, MSMEs still face a lot of constraints 
that are not adequately addressed by the government. Such a major constraint is the 
access to capital. In particular, while MSMEs may have access to affordable financing, 
the costs and interests related to it may be prohibitive. For the Philippines to address 
the need for better access to credit, the State should institutionalize a micro-financing
1 https://www.dti.gov.ph/resources/msme-
statistics/?TSPD_101_RO=74cea82ef5df77bc57645133621925bOjZw0000000000000000382f6982ffffOOOOO
0000000000000000000000062cla71c00ddc2552108bc3543d6ab2000449e847c557d6269dde95cl208a88
2clbe59ca2eb0418a6f677519fb4744ec2708233aadl30a28004c242c75616e964fd0969312e35dl0dce5ccdf
b3cbe6cf95806bc5e814fb4ff890a2fbeed01bd6dc
2https://www.entrepreneur.com.ph/news-and-events/opening-a-sari-sari-store-or-market-stall-read-this-to- 
find-out-if-they-re-growing-or-shrinking-a00200-20180710, last accessed 15 July 2019 
3http://opinion.inquirer.net/12421/smes-for-inclusive-growth , last accessed 15 July 2019.
4 International Finance Corporation, MSMEs: International Comparisons, 2010.


program with a simplified process that can provide members of the working class in 
need of capital with sufficient funds to start their own businesses.
This is one program inspired and adopted by MSME programs by our 
neighboring Southeast Asian countries. The proposed measure further creates a 
comprehensive development and assistance program for MSMEs, which is national in 
scope but tailored fit for each administrative region. The goal of the program is to give 
access to capital to small proprietors, ensure the success of their MSMEs, and 
transform these MSMEs into five-star businesses by providing them with assistance 
and the necessary resources in order to help their businesses flourish. Pu/zu/mn Tungo 
sa Kaunlaran (PTK) Act embodies the Filipino Bayanihan spirit and sense of 
community where every Filipino would lend a hand to help each other out. Thus, 
collectively progressing economically.
In view of the foregoing, approval of this bill is strongly recommended.
ALAN PETER "COMPANERO" S. CAYETANO


NINETEENTH CONGRESS OF THE PHILIPPINES 
REPUBLIC OF THE PHILIPPINES
First Regular Session
S. B. No. 65
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RECEIVED 
JULSl
DATE
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BY:
BILLS & INDEX
INTRODUCED BY SENATOR ALAN PETER "COMPANERO" S. CAYETANO
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AN ACT
INSTITUTIONALIZING MICROFINANCE PROGRAMS AND ACCESS TO CAPITAL TO 
SUPPORT AND GROW MICRO ENTERPRISES, APPROPRIATING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the aPuhunan Tungo sa 
Kaunlaran (PTK) Act”
SECTION 2. Declaration of Policy. - It shall be the policy of the State to 
promote genuine inclusive growth and alleviate poverty. It is likewise the policy of the 
State to promote a just and d3mamic social order that shall ensure prosperity, promote 
full employment, a rising standard of living and an improved quality of life for all. In 
pursuit of this, the State shall endeavor to develop a program that will ensure that all 
of its citizens are equipped with or can readily access the necessary capital to pursue 
opportunities and uplift their lives.
All sectors of the economy and all regions of the country shall be given optimum 
opportunity to develop. The development of Micro, Small, and Medium Enterprises 
[MSMEs] in all productive sectors of the economy-private enterprises, including 
corporations, cooperatives, and similar collective organizations-shall be encouraged 
to create livelihood for Filipinos and create a broader tax base. Disadvantaged sectors 
of the society and economy, such as public market vendors and owners of micro­
enterprises, shall be priority targets of government assistance.
SECTION 3. PTK Five-Star Program. - The Department of Trade and Industry 
(DTI), in coordination with the Department of Interior and Local Government (DILG), 
Department of Agriculture (DA), Department of Science and Technology (DOST), 
Department of Tourism (DOT), National Economic and Development Authority 
(NEDA), and the Technical Education and Skills Development Authority (TESDA), 
shall develop a comprehensive program for the development of micro, small and 
medium enterprises (MSMEs) in all regions of the country. The goal of the program is 
to give access to capital to small proprietors, ensure the success of their MSMEs, and 
transform these MSMEs into five-star businesses by providing them with assistance 
and the necessary resources in order to help their businesses flourish.


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The DTI shall be guided by the following principles in the development of the 
PTK Five-Star Program:
a. The Program shall be national in scope but shall be tailored fit to the 
business environment, market demands and available resources of each 
administrative region;
b. The DTI shall create a registry of all MSMEs per region based on their size 
category (z.e., micro, small or medium) and business area [i.e., agriculture, 
livestock, fisheries, food processing, fabric and clothing, eco-tourism 
activities, pottery and handicrafts, furnitures and hardwood, information 
and technology, etc.);
c. Each region shall choose a maximum of five (5) priority business areas to 
develop in order to reap the benefits of efficiency and specialization;
d. As much as possible, each region shall be encouraged to choose a diversified 
priority business portfolio in order to hedge for risks brought about by 
natural calamities and changing market demands;
e. To facilitate the implementation of this Act, each region shall establish a 
proprietor's guild for each of their priority business areas;
f.
g-
Free technical and administrative support, including, but not limited to, 
product development, skills and leadership training, packaging and design, 
quality control, market promotion, client or supplier matching, and 
financial literacy and planning, shall be made available to MSMEs falling 
under the five [5) priority business areas in their respective regions;
Every year, the five (5) top-performing enterprises per size and category in 
each region shall receive a Five-Star award and shall be eligible for grants, 
not less than ten percent (10%) of their current capital, to be used solely for 
further business capitalization;
Every medium-sized enterprise that evolves into a large enterprise through 
the help of the PTK Five-Star Program shall likewise be eligible for a one­
time grant of Twenty-Five Thousand Pesos (Php 25,000) to be used solely 
for further business capitalization; and
There shall be a mandatory review of the PTK Five-Star program every three 
(3) years in order to ensure that the program meets the present market 
demands.
SECTION 4. PTK Assistance Program. - In addition to the PTK Five-Star 
Program, the DTI, in consultation with the National Anti-Poverty Commission (NAPC) 
and the Bangko Sentral ng Pilipinas (BSP), shall develop a cash assistance program 
catering exclusively to micro-enterprises in need of capital, whether or not they fall 
under the priority business areas of their respective regions under the previous 
section.


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The DTI shall be guided by the following principles in the implementation of 
the program:
a. The assistance shall be extended only to beneficiaries who have satisfied the 
requirements under this Act;
b. Each cash assistance shall be from Five Thousand Pesos (Php 5,000} to Fifty 
Thousand Pesos (Php 50,000], depending on the number of employees, 
number of years in business, financial hardship, and such other criteria as 
determined by the DTI. The DTI is hereby authorized to amend these 
amounts, after the mandatory review provided in this Act, in order to meet 
present market demands;
c. Priority shall be given to micro-enterprises falling under the priority 
business areas of their respective regions, particularly the public market 
vendors to strengthen their financial capabilities and improve public 
services;
d. There shall be a mandatory review of the program every three (3} years in 
order to ensure that the program meets the present market demands.
In the pursuit of inclusive growth and poverty alleviation, pertinent rules and 
regulations promulgated in the implementation of this Act shall provide for the 
details, conditionalities, and other schemes in the operationalization of the program, 
such as, but not limited to, penalty rates upon default and the dispensation of the 
proceeds from the program.
SECTION 5. Eligibility for Financial Assistance Program. - To qualify for the 
program under this Act, the beneficiary must be:
a. At least eighteen (18) years of age;
b. Each natural person shall receive financial assistance under this Act only 
once, notwithstanding the number of businesses owned;
c. A member in good standing of the duly-registered cooperative or 
association, or a resident of the local government unit [LGU], from which 
he/she intends to avail of the financial assistance;
d. Delivery of the program shall be through partner institutions which are 
cooperatives and/or associations that are registered with the Cooperative 
Development Authority (CDA), or the Securities and Exchange Commission 
(SEC), and the DTI. In the absence of such participating partner institutions 
in the area, government institutions, centers or facilities, now existing or 
may be created by law, which are dedicated to the promotion of inclusive 
growth and anti-poverty objectives, are mandated to implement the 
program;
e. The partner institution shall have a mechanism, whereby cash assistance 
are made on a weekly or monthly basis;


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f. Willing to state under oath the facts establishing the foregoing;
g. Comprehensive feasibility study of the business proposal; and
e. Has attended a DTl-accredited livelihood seminar, as evidenced by a 
certificate of participation, and possesses credit-worthiness, as likewise 
proven by a certificate issued by the DTI for that purpose.
SECTION 6. Registration of Cooperatives and Associations. - The DTI shall 
keep a registry of all participating cooperatives and associations for monitoring and 
record keeping purposes. Cooperatives and associations which are eligible to 
participate in programs provided for in this Act must register to be included in the 
database.
SECTION 7. Local Government Unit Participation. - Local Government Units 
may partner with the DTI for the efficient implementation of this Act.
Any law, executive order, department order, ordinance and the like, to the 
contrary notwithstanding, local government units, through the local sanggunian, as 
defined in the 1991 Local Government Code, are hereby authorized to provide a 
financial assistance program in cooperation with the cooperatives/ associations, non­
governmental organizations, and peoples' organizations that are providing 
assistance to MSMEs within their jurisdiction.
Provided, that in cities or municipalities where there are no such cooperatives/ 
associations, the local government unit shall, within one year from the effectivity of 
this Act, require the municipal/city social welfare and development office or the local 
trade and industry office or livelihood development office in the city or municipal 
government concerned, to develop and implement a cash assistance program 
consistent with the provisions of this Act, under the supervision of the DTI.
Provided, further, that each participating LGU must prepare a comprehensive 
feasibility study for the development of a financial assistance program. Each LGU must 
fund, from its internal revenue allotment, at least Five Million Pesos (Php 5,000,000], 
where possible and practicable, or Thirty Percent (30%] of the total funding cost 
related to small business improvement, agricultural improvement, institutional 
advancement and consumer protection, whichever is higher. Likewise, for this 
purpose, the LGU shall maintain a separate and dedicated office which shall be 
responsible for the over-all implementation of the program in the locality.
SECTION 8. Tax Exemption for Private Support. - Any person or corporate 
entity may donate funds, equipment, materials or services for the improvement of the 
PTK Five-Star and/or PTK Assistance program. Such donations shall be done through 
a memorandum of agreement between the cooperative or association, LGU, and the 
donor. The agreement shall expressly state the value of the donated funds, materials, 
or services.
All income, legacies, gifts, and donations for the benefit of the program shall be 
exempt from the payment of all forms of taxes, fees, assessments, and other charges 
of the government, its branches, and subdivisions. Subject to the issuance of the 
appropriate revenue regulations by the Bureau of Internal Revenue, the value of the


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donation shall also be deductible as an expense in the determination of the taxable 
income of any donor.
SECTION 9. Funding. - The total amount of One Hundred Billion Pesos [Php 
100,000,000,000) for the next two (2) years upon implementation of this Act, or Fifty 
Billion Pesos (Php 50,000,000,000) per year for the next two years upon 
implementation of this Act, shall be appropriated for the initial implementation of the 
PTK Five-Star Program and the PTK Assistance Program. Said amount shall at all times 
be divided equitably among each administrative region of the country. Thereafter, 
such sums as may be necessary shall be included in the General Appropriations Act.
In addition, the amount of Five Hundred Million Pesos (Php 500,000,000) is 
hereby appropriated as a Special Development Fund to generally support the initial 
implementation of this Act.
The funds shall be held in trust by the DTI in collaboration with the 
Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP) and 
other government financial institutions. The DTI may likewise allocate a portion of 
the funds to the People's Development Trust Fund (PDTF) under Republic Act No. 
8425, provided that the funds to be allocated to the PDTF shall be used solely for 
microfinance-related organizing activities.
SECTION 10. Primary Implementing Government Agency. - The DTI shall 
be the lead agency, which shall ensure the implementation of this Act.
SECTION 11. Role of Government Financial Institutions. - All government 
financial institutions (GFIs) shall set aside funding for microfinance operations to 
complement the purposes of this Act. Participating government financial institutions 
shall include the DBP, LBP, and other GFIs.
SECTION 12. PTK Task Force. - There shall be a PTK Task Force in charge of 
coordinating with banks and financial institutions on their existing programs on 
microfinancing. This shall be consolidated and submitted to DTI to be taken into 
consideration for the PTK Assistance Program.
SECTION 13. Reports. - The DTI Secretary shall submit to the President of the 
Philippines, the President of the Senate and the Speaker of the House of 
Representatives, an annual accomplishment report on projects covered in this Act, 
detailing the amount of appropriations released by end of the calendar year, the extent 
of the work accomplished, further work to be done, and any recommendations for 
additional appropriations or charges thereof.
SECTION 14. Full Financial Disclosure, Accountability and Transparency.
- The DTI, as lead agency of the program, and the LGU concerned shall quarterly 
publish, print, and disseminate at no cost to the public and in an accessible form, in 
conjunction with Republic Act No. 9485, otherwise known as the "Anti-Red Tape Act 
of 2007", and through their websites, timely, true, accurate, and updated key 
information relating to the program. Likewise, they shall endeavor to translate key 
information and present them in popular form and means.


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SECTION 15. Implementing Rules and Regulations. - The DTI, in 
consultation with relevant government agencies, shall prepare such rules and 
regulations for the proper and effective implementation of this Act, within sixty (60) 
days from the date of publication. The DTI shall publish such rules and regulations 
once a week for two (2) consecutive weeks in two newspapers of general circulation.
SECTION 16. Separability Clause. - If any provision of this Act is declared 
unconstitutional, the same shall not affect the validity and effectivity of the other 
provisions hereof.
SECTION 17. Repealing Clause. - All laws, decrees, orders, issuances or 
portion thereof, which are inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly.
SECTION 18. Effectivity - This Act shall take effect fifteen (15) days after its 
publication in two (2) newspapers of general circulation.
Approved,