ATESMAY_0 4 2029,”
Republic of the Philippines (ME:_1o% t
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 8683

Introduced by HON. JOY MYRA S. TAMBUNTING

EXPLANATORY NOTE

The micro, small and medium enterprises sector is observed to be among those severely hit by
the COVID-19 crisis, with the implementation of the enhanced community quarantine to mitigate
the transmission of the COVID-19. The enhanced community quarantine has forced non-essential
businesses to temporarily cease their operations in compliance to the strict home quarantine
measures imposed by Proclamation No. 929 effective 16 March 2020. With most of these non-
essential businesses being MSMEs, these enterprises are struggling to cope with the crisis as
there is no cash flow coming in during and even before the implementation of enhanced
community quarantine.

Based on the 2018 statistics of the Department of Trade and Industry, micro, small and medium
enterprises (MSMEs) make up 99.52% (which amounts to 998,342 MSMEs) of the recorded total
of 1,003,111 business enterprises in the country. Majority of the MSME establishments are micro
enterprises which constitutes 88.45% of the total, while small and medium enterprises make up
10.58% and 0.49% of the total, respectively. During the same year, MSMEs have generated a
total of 5,714,262 which constitutes over 60% of the country’s total employment.

While a thirty-day grace period for loan payments have already been imposed under the
Bayanihan to Heal as One Act, it is still necessary for the government to provide further relief to
these enterprises in order to prevent them from closing down and causing mass unemployment.
As these businesses rely heavily on daily income, these businesses are now facing liquidity issues
due to the closure of establishments under the enhanced community quarantine. Despite the zero
cash flow during the months of March, April and May 2020, these enterprises still need to shell
‘out money to cover operational expenses such as utilities, rent, wages and benefits to their
employees, and taxes. Further, there is no guarantee that the cash flow upon the resumption of
business operations will revert to the typical cash flow before the COVID-19 crisis.

In this regard, this proposed measure shall provide the following relief a to affected micro, small
and medium enterprises: (1) imposing discounted rent or lease rates during the period wherein
enhanced community quarantine and a month thereafter; (2) rent subsidy program for the
months of March, April and May 2020; (3) waiving of both employer and employee share of


premium payments to SSS, PhilHealth and Pag-IBIG; and (4) deferral of tax payments for MSMEs.
‘The abovementioned relief measures are proposed to enable MSMES to recover from the losses
they incurred for the past few months and continue their operations to further contribute to the
economic recuperation of the country.

On behalf of the people of Parafiaque City Second District, and for the common good of the
Filipino people, the approval of the said measure Is earnestly sought.

)
10 /MYRA S. TAMBUNTING!
_2nd District, Parafiaque City


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House ait no, 6683

Introduced by HON. JOY MYRA S. TAMBUNTING

AN ACT PROVIDING RELIEF TO MICRO, SMALL AND MEDIUM ENTERPRISES
(MSMEs) IN RELATION TO THE COVID-19 PANDEMIC AND APPROPRIATING FUNDS
THEREFOR

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 and cited as “COVID-19 MSMEs Relief
Act.”

SEC. 2. Declaration of Policy. — The COVID-19 pandemic measures have greatly disrupted the
economy with temporary cease in the operations of business enterprises due to the
implementation of Community Quarantine. Most of these business enterprises are micro, small
and medium enterprises (MSMEs) which makes up the majority of the country’s employers. In
recognition of the valuable MSMEs as employers and their potential in spurring the recovery of
the economy, it is hereby declared the policy of the State to provide direct and immediate support
MSMEs and their workers as they navigate around liquidity issues during the implementation of
strict quarantine measure during the COVID-19 crisis.

SEC, 3. Definition of terms, - As used in this Act, the following terms are defined as follows:

(a) Landlord refers to any owner of a facility or building or any other person, including mall
owners and property lessors making space available to micro, small and medium
enterprises.

(b) Period covered by community quarantine — refers to the period where strict home
quarantine is implemented in all households, movement of both people and goods are
regulated, and heightened presence of uniformed personnel is enforced in accordance to.
the Proclamation No. 929 dated 16 March 2020.

(©) Micro, smail, and medium enterprise (MSME)— refers to any business activity or enterprise
engaged in industry, agribusiness and/or services, whether single proprietorship,
cooperative, partnership or corporation whose total assets, inclusive of those arising from


loans but exclusive of the land on which the particular business entity's office, plant and
equipment are situated, must have value falling under the following categories:

micro :_| not more than P3,000,000
small | P3,000,001 - 15,000,000
medium P15,000,001 — P100,000,000

SEC. 4, Discounted Rent Rates for Business Spaces. — Landiords must provide a fifty
percent (50%) discount in the rent or lease rates of business spaces occupied by MSMEs for the
period covered by community quarantine and a month thereafter.

‘SEC. 5. Rent Subsidy Program for MSMEs. The Department of Trade and Industry (DTI) shall
establish a program under which affected MSMEs can apply for subsidy for the rent or lease of
business spaces for the months of March, April and May 2020.

DTI shall issue the guidelines and regulations for the implementation of this section within thirty
(30) days from the approval of this Act.

SEC. 6. Payment of Mandatory Employee Benefits and Contributions. - Premium
payments or contribution to Social Security Service (SSS), Philippine Health Insurance Corporation
(PhilHealth) and Home Development Mutual Fund (Pag-IBIG) of both employer and employees
of MSMEs shall be waived and considered paid for the period covered by community quarantine.

‘SSS, PhilHealth and Pag-IBIG shall jointly issue the guidelines and regulations for the
implementation of this section within thirty (30) days from the approval of this Act.

SEC. 7. Tax Deferral for MSMEs. ~ All payments of direct and indirect taxes such as the income
tax, value added tax and withholding tax for the period covered by the community quarantine
shall be deferred for at least three months without penalty to the MSMEs.

The Bureau of Internal Revenue shall issue the guidelines and regulations for the implementation
of this section within thirty (30) days from the approval of this Act.

‘SEC. 8. Appropriations. — The amount necessary to effectively implement the provisions of this
Act shall be charged against the current year’s appropriations of the concerned agencies.

‘SEC. 9. Separability Clause. — If for any reason or reasons, any part or provision of this Act is
declared invalid or unconstitutional, the other parts hereof not affected thereby shall remain valid.

SEC. 10. Repealing Clause. ~ All laws, orders, proclamations, rules and regulations, or parts
thereof, which are inconsistent with any provision of this Act are hereby repealed or modified
accordingly.

SEC. 11. Effectivity. — This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any newspaper of general circulation.

Approved,