FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 
-490 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill is the product of rigorous consultations with informal sector groups and 
leaders from the five informal sub-sectors in Luzon, Visayas and Mindanao in 
2008 to seek a way forward for the social protection and empowerment of the 
poor. 
There is an urgent need to provide access to social protection benefits to almost 
15 million members of the informal sector and to provide appropriate regulation, 
due representation in local government agencies and meaningful planning that 
will harness their full potentials to become effective economic actors. 
This proposed Magna Carta of Members of the Informal Sector is one significant 
contribution toward fulfilling the Constitutional mandate of social justice and 
human rights for the informal poor. Both civil society and government are giving 
their best efforts to make life a little better for the poor. There is a need for the 
latter to redefine and scale up not only its priorities, political will but more 
fundamentally, its genuine care for the poor. 
The best entities to design culturally sensitive and appropriate social protection 
and delivery mechanisms are the local government units (LGUs) and their 
constituencies. 
Ensuring wider and deepened grassroots partiCipation in 
improving access to social protection will reduce urban poverty in the Philippines. 
It is in this regard that several provisions deal with the participation of the local 
govemment units as well as the crucial role of the National Economic 
Development Authority (NEDA). 
Aside from the rights, the bill also contains provisions that tackle responsibilities 
of the members of the sector. Further, this bill also provides for specific recourse 
mechanisms to the basic sectors so that their grievance can be better redressed 
and their welfare be given attention. 
The 2008 Informal Sector Survey (2008 ISS) conducted by the National Statistics 
Office (NSO) yielded that there were about 10.5 million informal operators 
identified. Some sectors however assert that the informal sector is estimated to 
reach 15 million, or almost fifty (50 percent) of the country's labor force. 
Contrary to the usual notion, the informal sector is quite productive. 
They 
provide array of services to the public and are engaged in legitimate 
undertakings. According to the National Statistical Coordination Board (NSCB), 
forty three (43 percent) of the country's Gross Domestic Product (GOP in 2006 
came from the informal sector. 


Sadly, this contribution of the informal sector to the economy is insufficiently 
recognized. 
This 8is proven by the inadequate legal and social protection 
accorded to this sector. What is worse is that members of informal sector groups 
have been a source of not only of local revenues such as market taxes; they are 
, 
also vulnerable to "kotong". 
Based'from 2003 figures of the National Statistical Office (NSO) and the National 
Statistical Coordination Board (NSCB), at least three out of every ten Filipinos 
are poor. 
Using self-rated methods, more than half of the almost 78 million 
Filipinos view themselves as kabus, pobre, or mahirap (the Visayan and Tagalog 
word for poor). 
Abject situation of the members of the informal sector violates the international 
laws and the prOVisions of the Constitution on Social Justice and Human Rights. 
Ratified by the Philippine government in 1974, Article 9 of the International 
Covenant on Economic, Social and Cultural Rights states "The State Parties to 
the present Covenant recognize the right of everyone to social security, including 
social insurance". 
The 1987 Constitution also directs the State to provide social justice and human 
rights to poor and marginalized sectors such as the informal sector. 
It is in this direction that this bill is proposed. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 490 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
PROVIDING FOR A MAGNA CARTA OF WORKERS IN THE INFORMAL 
SECTOR 
ENGAGED 
IN 
SUBSISTENCE 
ENTERPRISES, 
INSTITUTIONALIZING MECHANISIVIS FOR IMPLEMENTATION THEREOF 
AND 
AMENDING 
FOR THE 
PURPOSE 
CERTAIN 
PROVISIONS 
OF 
REPUBLIC ACT 7160 AND REPUBLIC ACT 8282 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
Title I 
GENERAL PROVISIONS 
Chapter I 
Framework and Principles 
SECTION 1. Short Title. 
This Act shall be known as the "Magna Carta of 
Workers in the Informal Sector'. 
SEC. 2. Declaration of Policy. It is hereby declared the policy of the State: 
(a) to promote and improve the total well-being of the poorest of the poor, 
the marginalized and subsistent low level income earners who engage 
in economic activities under the informal sector; 
(b) to nurture and protect the interests of the informal sector by providing 
them with adequate and timely social, economic and legal services, as 
well as mechanisms that shall protect their rights and promote benefits 
that ensure their dignified existence and economic advancement; 
(c) to recognize, promote, protect and fulfill the rights of every worker in 
the informal sector including the right to self-organization, the right to 
decent work, just and humane working conditions, access to social 
protection, and the right to represent their organizations in a continuing 
process of consultation and dialogue towards maximizing the provision 
of a comprehensive package of reforms, interventions, and services in 
1 


accordance with their articulated needs and interests, with focus on 
the vulnerable groups; 
(d) to recognize the roles and contributions of workers in the informal 
sector and make them visible in the national and local statistics; 
(e) to develop and enhance their entrepreneurial skills and capabilities so 
that they can become more productive and self-reliant citizens thereby 
ensuring participation in mainstream economic activities based on their 
own pace and self-determination; 
(f) to promote gender equity and equality through elimination of gender 
stereotypes attached to certain enterprise or occupation in the informal 
sector and redefining household as not merely male headed but also 
female headed; 
(g) to protect women workers in the informal sector against gender-based 
discrimination, exploitation, violence and abuse; 
(h) to advance the women workers' social, political and reproductive rights 
and provide access to social protection and participation in decision-
making bodies; 
(i) to recognize ethnicity in the formulation of programs and mechanisms 
to promote and protect informal sector's rights; 
U) to protect vulnerable groups in the informal sector such as children, 
elderly, 
differently-abled 
persons 
and 
indigenous people from 
discrimination, exploitation, abuse and harassment; 
(k) to progressively eliminate child labor in the informal sector through the 
creation of more quality jobs for adults, effective enforcement of laws 
against child labor, improved access to universal education and 
elimination of cultural factors that tolerate child labor; 
(I) to develop the local economy through maximization of the potential 
and contribution of the informal sector business activities and 
enterprises. 
SEC. 3. Framework and Principles. It is the State's responsibility to give the 
highest priority to the enactment of measures that protect and enhance the 
rights of all people to human dignity, reduce social, economic and political 
inequalities and remove cultural inequities by diffusing wealth and political 
power for the common good and to provide environments at national and local 
levels that enable all workers to fully develop into productive and responsible 
citizens. 
Towards this end, the government shall pursue and implement a 
comprehensive, rights-based, participatory and gender responsive framework 
for workers in the informal sector that includes but is not limited to: 
(a) putting in place policies and programs that will bring marginalized 
workers and economic units into the economic and social mainstream 
and spur entrepreneurial or growth-oriented informal businesses to 
graduate to formal status based on their own pace and self-
determination; 
2 


(b) pursuing structural reforms in all relevant levels of government by 
creating committees, special offices for development and protection of 
workers in the informal sector and supporting their representational 
rights through their organizations; 
(c) extending coverage of accessible and affordable social security and 
health care benefits to workers in the informal sector; 
(d) implementing minimum and simplified regulation to encourage the 
development of ingenuity and entrepreneurial spirit among workers in 
the informal sector; 
(e) encouraging the organization, establishment, strengthening and 
expansion of the various business activities or enterprises under the 
informal sector in the barangay level preferably unified under a 
, municipality, provincial, regional and national federation/association; 
. (f) exacting responsibility on the part of the informal sector workers 
provided that the state shall recognize their rights and put in place 
responsive, transparent and accountable mechanisms to ensure 
protection, promotion and realization of those rights. 
SEC. 4. Definition of Terms. As used in this Act, the following terms shall mean: 
(a) hazardous work or condition refers to any activity or circumstance 
where a worker is exposed to any risk which constitutes an imminent 
danger to his/her health and safety. 
(b) ambulant vendors or peddlers refer to vendors who ply their trades in 
search of buyers. 
(c) street vendors refer to vendors who sell their merchandise on streets 
and sidewalk. 
(d) informal sector 
(1) For purposes of identification and coverage of the law, the informal 
sector otherwise known as IS consists of "units", whether individual 
or group, own-accountlself-employed or subsistence livelihood 
enterprises regularly employing family members, engaged in the 
production of goods and services with the primary objective of 
generating employment and incomes to the units concerned in 
order to earn a living. These units typically operate at a low level of 
organization, with little or no division between labor and capital as 
factors of production. It consists of household enterprises that are 
market and non-market producers of services. 
(2) The category of individuals or organization of people involved in 
any business activity or enterprise whose total assets, inclusive of 
the capital investments, must not value more than the amount of: 
i. 
One hundred fifty thousand pesos (P150,OOO.OO) for small 
public transport like padyak and pedicab and (P350-400,OOO) for 
a one (1) unit jeepney; 
ii. One 
hundred 
fifty 
thousand 
pesos 
(P150,OOO.OO) 
for 
marginalized farmers; 
iii. One 
hundred 
fifty 
thousand 
pesos 
(P150,OOO.OO) 
for 
marginalized fisherfolks; 
3 


iv. Fifty thousand pesos (P50,OOO.OO) for home-based workers; 
v. One hundred fifty thousand pesos (P150,OOO.OO) for small 
vendors with designated stalls; 
vi. Fifteen thousand pesos (P15,OOO.OO) for ambulant and street 
vendors. 
The aforestated amount shall be adjusted every five years by the 
Informal Sector Development Council (lSDC), which is created 
under this Act. 
Adjustment of the aforestated amount shall be 
based on prevailing poverty threshold and other established 
standards in determining subsistence level of living. 
For purposes of exclusion, corporations, quasi-corporations, units 
with ten or more employees, corporate farms, commercial livestock 
raising and commercial fishing are excluded from this definition of 
informal sector. 
(e) worker refers to a general term to mean either or both the micro-
entrepreneur 
or 
own-account/self-employed 
covered 
under the 
provision of this Act as defined in the preceding paragraph. 
(f) pakya w basis refers to the pre-contracted wholesale mode of paying 
an informal sector worker as bilaterally agreed by the contracting 
parties. 
(g) entrepreneurial or growth oriented informal business refers to those 
which show potential in increasing productivity, in hiring workers from 
outside the household, in developing new competencies in areas of 
production and operations. 
(h) informal sector sub-groups- for purposes of this Act, refer to vendors, 
, small farmers, marginalized fisherfolks, small transport, home-based 
workers and non-corporate construction workers and micro-informals 
and self/own account. 
(i)small transport refers to non-corporate operators of small marine boat or 
vessel for small public transport, tricycle, pedicab, habal-habal, calesa, 
kuliglig, balsa or "trolley" including self-operated and owned one(1) unit 
jeepney. 
(i) small farmer refers to an individual engaged in sUbsistence farming 
including the sale, barter, exchange of agricultural products or 
processing of agricultural and 
other by-products produced by 
him/herself and his/her immediate family, or rural workers who are 
tenants or sharecroppers or contracted laborers provided they do not 
fall under the category of agricultural workers under the Labor Code. 
U) subsistence-marginalized fisherfolks refer to individuals engaged in 
subsistence fishing such as but not limited to the use of fishing boats 
less than three (3) tons, use of fishing gear which do not require boats, 
those who are without fishing boat or gear but share in the first catch of 
individuals having fishing boats, those engaged in SUbsistence 
aquaculture, or those engaged in the processing of marine and other 
by products in subsistence level. This also includes immediate family 
members, especially women, who engage in the preparation of fishing 
gears and other needs before fishing activity and who engage in the 
4 


sale, barter or exchange of marine products produced. Also included 
in this category are fishport workers, porters and batillo. 
(k) non-government organizations (NGO) refers to any aggrupation of 
individuals, not subsidized by government funds or organized for 
religious purposes or partisan politics, and whose primary ends are 
advocacy of issues or the realizations of specific developmental 
objectives for the community or a sector thereof. 
(I)' people's organization (PO) refers to any cooperative, union, business 
group or any aggrupation of at least twenty-five (25) individuals 
belonging to the same sector or sharing a common interest, not 
subsidized by govemment funds or organized for religious purposes or 
partisan politics, and whose primary concern is the advocacy of 
sectoral issues; and/or the realization of specific developmental 
objectives for their sector or the promotion of their common interest. 
(m) Informal Sector One-Stop Shop Center refers to the office at the local 
government units (LGUs) where all transactions needed in the 
processing of business permits and other business requirements of the 
Informal Sector workers shall be conducted. 
(n) Workers of minor age refer to children fifteen (15) to seventeen (17) 
years of age who are engaged in productive employment. 
Chapter II 
Coverage, Qualifications and Accreditation 
SEC. 5. Coverage. This Act shall cover members of the informal sector who are 
operating, employed or working either as micro-entrepreneur or self-
employed/own account as defined herein. Provided, however, that the 
aforesaid 
micro-entrepreneur, 
self-employed, 
qualifies 
in 
the minimum 
requirements set forth in this Act. 
For purposes of this Act, the term "informal sector" shall cover the following: 
(a) Subsistence-livelihood enterprises and self-employed: 
i. 
vendors, whether with stalls or without including ambulant vendors, 
street vendors or those plying their goods and trades in streets and 
those engaged in sari-sari stores which conform with the total asset 
value requirements as mentioned in Section 4 (d) of this Act; 
ii. small farmers; 
iii. marginalized fis herfolks; 
iv. home-based workers who are independent producers of goods or 
services and whose total asset value conforms with that mentioned in 
Section 4 (d) of this Act; 
v. small transport such as but not limited to non-corporate operators 
of small marine boat or vessel for transport, tricycle, pedicab, haba/-
habal, calesa, 
kuliglig, balsa or "trolley" whose total asset value 
conform with the requirement as mentioned in Section 4 (d) of this Act. 
(b) own-account/self-employed: 
i. 
on call domestic and service workers such as live-out cleaners, 
laundry men and women and plantsadora; 
ii. barbers, manicurists, pedicurists 
5 


iii. drivers of tricycle, pedicab, habaJ-habaJ, kaJesa, kuJigJig, "trolley" or 
small marine vessel/boat; 
iv. "barkers", fare collectors, dispatchers and other workers who share 
in the income of the non-corporate operators; 
v. welders and mechanics; 
vi. non-corporate constructions workers such as but not limited to 
carpenters, plumbers, electrician, mason or house painters; 
vii. appliance technicians including but not limited to television, radio, 
air conditioner, computer and refrigeration technicians; 
viii. scavengers 
SEC. 6. Registration. There shall be a simple standard of registration system in 
accordance with the framework and principles of this Act. 
Informal sector 
business activities or enterprises shall, upon registration, pay one hundred pesos 
(P100.00) to the municipality or city where they intend to operate during their 
initial year of operation. The said fee shall cover the cost of the issuance of the 
license to operate. No other fees shall be exacted from the informal sector 
business activities or enterprise other than the registration fee as mentioned 
above. 
Informal sector business activities or enterprises which are in operation and 
registered, pursuant to applicable laws or local ordinance, prior to the enactment 
of this Act shall be recognized as having complied with the registration 
requirement of this Act and shall no longer be required to pay the registration fee 
as mentioned in the preceding paragraph. 
, 
The registration shall entitle the informal sector business activities or enterprise 
to development programs and benefits under this Act. 
All local government units shall establish an Informal Sector One-Stop Shop 
Center which shall handle all transactions and processing of the business permit 
applications within their respective jurisdiction. The Center shall ensure that the 
processing of the business permit of informal sector business activities or 
enterprises shall be done on the day of their application and the registration shall 
be released within thirty six (36) hours upon submission of the complete 
requirements based on its checklist. 
To facilitate efficient and expeditious 
registration of informal sector business activities or enterprise, the local 
government units shall formulate a uniform and simple checklist of requirements 
for registration such us valid proof of identity (barangay clearance, certificate of 
reSidency, etc.) and flowchart of the procedure of registration. 
The local 
government must ensure the recognition and registration of women workers in 
the informal sector through appropriate activities. The local government unit shall 
be responsible in translating the checklist of requirements and flowchart of 
procedure of registration in their own local dialect. The local government unit 
shall cause the posting of the checklist and flowchart of procedure of registration 
in at least three (3) conspicuous areas, preferably public areas, in the community 
and cause the publication of the same in the local newspaper if there be any. 
Further, the Center shall maintain a comprehensive database of informal sector 
business activities and enterprises which have been issued licenses to operate. 
The database shall take into account the different sub-classifications of informal 
sector in terms of geography (urban or rural based), premises (home-based or 
non home-based), gender (male or female), ethnicity (ethno-linguistic group or 
indigenous community), vulnerability (children, elderly or person with disability), 
industry (industrial, commercial, services or agricultural), occupation (fisherfolks, 
farmers, construction, drivers, vendors, laborers or sales personnel), nature of 
6 


employment 
(casual, 
contractual, 
seasonal, 
permanent/regular 
or 
pakyaw/commission 
basis/boundary 
system) 
and 
roles/functions 
(own-
account/self-employed or subsistence/marginal employment). 
The database 
shall als? indicate those informal businesses which may be categorized as 
livelihood enterprises and those entrepreneurial or growth oriented informal 
business. 
The aforesaid comprehensive database of the informal sector shall be a basis of 
the assessment and monitoring of the growth of the informal sector. 
SEC. 7. Annual dues. Informal sector business activities or enterprises shall pay 
annual dues to the Informal Sector One-Stop Shop Center or Treasurer of the 
municipality or city where they are registered and accredited, starting on their 
second year of operations, based on the following schedule: 
(a) those with net worth amounting to less than P 25,000.00 
(b) those with net worth amounting to P 25,000.00 but less 
than P 50,000.00 
(c) those with net worth amounting to P 50,000.00 
but less than P 75,000.00 
(d) those with net worth amounting to P 75,000.00 
but less than P 100,000.00 
(e) those with net worth amounting to P 100,000.00 
but less than P125,000.00 
(f) t hose with net income amounting to P 125,000.00 
but less than Pi50,000.00 
A financial statement as proof of the net worth must be provided. 
P 250.00 
P 500.00 
P 750.00 
P1,OOO.OO 
Pi ,250.00 
P1,500.00 
The collected fee shall accrue exclusively to the municipality or city and shall be 
used for informal sector development programs approved by the municipal or city 
council. 
Additional Sources of Funds for LGUs - The following shall be tapped by LGUs 
as additional sources of funds for informal sector focused development initiatives: 
(a) ninety percent (90%) of fees and annual dues collected from small 
transport - for programs for workers in the small transport industry; 
(b) ninety percent (90%) of collected fees and annual dues from business 
'establishments and entrepreneurs falling under the category of 
: informal sector - for programs focusing on micro-entrepreneurs and 
their workers; 
(c) ninety percent (90%) of collected fees and annual dues from small 
vendors - for programs focusing on vendors; 
(d) ninety percent (90%) of fees and annual dues collected from small . 
farmers - for programs focusing on small farmers; 
(e) ninety percent (90%) of fees and annual dues collected from 
marginalized fisherfolks -
for programs focusing on marginalized 
fisherfolks. 
7 


(e) ninety percent (90%) of fees and annual dues collected from the 
Philippine Amusement and Gaming Corporation (PAGCOR) and 
Philippine Charity and Sweepstakes Office (PCSO). 
An Informal Sector Development Fund shall be established in every municipality 
and city for their supervision and management subject to accounting and auditing 
procedures by the Commission on Audit (COA). 
SEC. 8. Monitoring of growth. The local government unit in cooperation with the 
Informal Sector Local Development Office shall monitor the growth of the 
informal sector business activities or enterprises three (3) years after the 
enactment of this Act and every three (3) years thereafter. 
Title II 
RIGHTS AND BENEFITS OF WORKERS IN THE INFORMAL SECTOR 
Chapter I 
General Rights 
SEC .. 9. Basic Rights. The rights of Informal Sector workers shall be actively 
protected, promoted and upheld. These include the right to: 
(a) self-organization to collectively negotiate with the government and 
other entities in the promotion of their welfare and advancement of 
their interests free from any political interference or favor; 
(b) informed participation in decision-making processes relevant to the 
concerns 
of Informal 
Sector workers through 
their legitimate 
organizations; 
(c) equal treatment before the law; 
(d) safe conditions in the workplace that will safeguard their general and 
reproductive health; 
(e) accessible and affordable medical care and reproductive health 
services; 
(f) accessible social protection and basic services including but not limited 
to health services and low-cost housing to enable Informal Sector 
members to have a humane quality of life; 
(g) equal access to education, skills training, and economic resources to 
develop their self-reliance; 
(h) equal access to information technology, especially those affecting their 
welfare and interests; 
(i) freedom from any form of discrimination, violence, sexual exploitation, 
harassment and abuse; 
Ul common workplaces, merchandising centers, and inventory bulk-buying 
centers; 
8 


.(k) freedom from deprivation of property without valid cause and due 
process of the law; 
(I) alternative dispute resolution mechanisms and processes; and 
(m) equal access to justice through appropriate mechanisms. 
SEC. 10. Rights to Medical Care and Humane Treatment. Every worker has a 
right to good quality health care, without any discrimination and within the limits 
of the resources available for health and medical care. Attention must be given to 
women's health. In the course of such care, the human dignity, culture, 
convictions and integrity of the informal sector workers shall be respected. 
Any person who engages informal sector workers shall, at all times, treat the 
latter in a just and humane manner. In no instance shall abusive language, 
physical violence or any act which debases, degrades or demeans the intrinsic 
worth and dignity of the worker as a human being be used upon the latter. 
SEC.11. Progressive Land Tax. LGUs shall impose a progressive land tax to 
agricultural landholdings above three (3) hectares. The collected and tax shall be 
allocated for the local agriculture support services. Public agricultural lands within 
the territory of the LGU and/or all the LGU-owned agricultural lands beyond five 
(5) hectares shall be distributed to small landless farmers in their territory. 
SEC. 12. Local Fisheries Support Services. The Municipality/City shall provide 
capacity building training, access to collateral-free and gender-balanced credit, 
marketing assistance and infrastructure development for marginalized fisherfolks 
within their jurisdiction. LGUs are mandated to establish a fishers' market or a 
8agsakan where the marginalized fisherfolks can directly sell their products to 
the public. 
Chapter II 
Empowerment of Informal Sector Workers 
SEC.13. Informal Sector Workers' Organization. Informal Sector workers shall be 
encouraged to organize themselves for their mutual aid, benefit and protection 
and for other legitimate purposes. Towards this end, the government shall 
encourage and assist the Informal Sector workers in the formation of their self-
help 
organizations, 
associations, 
federations 
and 
confederations. 
The 
government shall encourage the formation of cooperatives among marginalized 
farmers, marginalized fisherfolks and home-based workers, with attention to the 
organization and formation of women and other vulnerable identities, in order to 
enable members to purchase inputs at lower cost and obtain fair prices for their 
produce. 
Informal Sector workers engaged in farming, fishing, manufacturing, transport, 
retail and services are encouraged to form cooperatives in every municipality and 
city to enable members to avail of credit assistance and skills training which will 
help improve their quality of life. 
9 


SEC. 14. Assistance to Informal Sector Workers' Organization. All concerned 
national government agencies, government financial institutions and local 
government units shall include in their plans, programs, projects and activities 
efforts that are supportive of the concerns of Informal Sector workers' 
organizations. 
SEC. 15. Representation in Policy Making Bodies. It shall be the responsibility of 
the local government units to ensure the participation of Informal Sector workers 
in public decision-making processes. Informal Sector workers have the right to 
participate at all levels of decision-making. 
The State shall therefore ensure that Informal Sector workers shall be given 
mandatory representation in policy-making bodies and other legislative councils. 
, 
For this .purpose, Sections 446, 457 and 467 of the Republic 7160 is hereby 
amended to read as follows: 
SEC. 446. Composition. 
(a) The sangguniang bayan, the legislative body of the municipality, shall 
be composed of the municipal vice mayor as the presiding officer, the 
regular sanggunian members, the president of the municipal chapter of 
the liga ng mga barangay, the president of the pambayang pederasyon ng 
mga sangguniang kabataan, and the sectoral representatives, as 
members. 
(b) In addition thereto, there shall be three (3) sectoral representatives: 
one (1) from the women; and, as shall be determined by the sanggunian 
concerned within ninety (90) days prior to the holding of local elections, 
one (1) from the agricultural or industrial workers or informal sector 
workers INFORMAL SECTOR WORKERS; and one (1) from the other 
sectors, including the urban poor, indigenous cultural communities, or 
disabled persons. 
(c) The regular members of the sangguniang bayan and the sectoral 
representatives shall be elected in the manner as may be provided for by 
law. 
xxx 
SEC. 457. Composition. 
(a) The sanggunian panglungsod, the legislative body of the city, shall be 
composed of the city vice mayor as presiding officer, the regular 
sanggunian members, the president of the city chapter of the liga ng mga 
barangay, the president of the panlungsod na pederasyon ng mga 
sangguniang kabataan, and the sectoral representatives, as members. 
(b) In addition thereto, there shall be three (3) sectoral representatives: 
one (1) from the women; and, as shall be determined by the sanggunian 
concerned within ninety (90) days prior to the holding of local elections, 
one (1) from the agricultural or industrial workers or INFORMAL SECTOR 
WORKERS; and one (1) from the other sectors, including the urban poor, 
indigenous cultural communities, or disabled persons. 
(c) The regular members of the sangguniang panlungsod and the sectoral 
representatives shall be elected in the manner as may be provided for by 
law . 
. xxx 
SEC. 467. Composition. 
JO 


(a) The sangguniang panlalawigan, the legislative body of the province, 
shall be composed of the provincial vice-governor as presiding officer, the 
regular sanggunian members, the president of the provincial chapter of 
the liga ng mga barangay, the president of the panlalawigang pederasyon 
ng mga sangguniang kabataan, the president of the provincial federation 
of sanggunian members of municipalities and component cities, and the 
sectoral representatives, as members. 
(b) In addition thereto, there shall be three (3) sectoral representatives: 
one (1) from the women; and, as shall be determined by the sanggunian 
concerned within ninety (90) days prior to the holding of local elections, 
one (1) from the agricultural or industrial workers or INFORMAL SECTOR 
WORKERS; and one (1) from the other sectors, including the urban poor, 
indigenous cultural communities, or disabled persons. 
(c) The regular members of the sangguniang panlalawigan and the 
sectoral representatives shall be elected in the manner as may be 
provided for by law. 
SEC. 16. Enactment of ordinance. The Local Government units shall enact an 
ordinance implementing Section 14 of this Act within three (3) years from the 
effectivity thereof. 
Chapter 1\1 
Social Protection 
SEC. 17. Medical/Health Insurance. An accredited Informal Sector worker, 
regardless of age and compensation level, shall be covered by 50 percent of the 
lowest rate of medical/health insurance under the Philippine Health Insurance 
Corporation (PHILHEAL TH), and be entitled to all the benefits provided for under 
the law. The free medical/health insurance coverage shall also extend to Informal 
Sector workers who are contracted/self-employed, as defined herein, and who 
are earning below the minimum wage. 
SEC. 18. Social Security Coverage. An accredited Informal Sector worker, 
regardless of age and compensation levels, shall be covered by social security 
and be entitled to all· the benefits provided under Republic Act No. 8282; 
provided, that the corresponding monthly contributions of small farmers shall be 
remitted every six months scheduled every post harvest of farm produce. For 
this purpose, Section 22-A of Republic Act 8282 is hereby amended to read as 
follows: 
SEC. 22-A. Remittance of Contributions of Self-employed Member. Self-
employed members shall remit their monthly contributions quarterly on 
such dates and schedules as the Commission may specify through rules 
and regulations. 
HOWEVER, FARMERS ENROLLED AS SELF-
EMPLOYED 
MEMBERS 
SHALL 
REMIT 
THEIR 
MONTHLY 
CONTRIBUTIONS EVERY SIX MONTHS SCHEDULED EVERY POST 
HARVEST OF FARM PRODUCE; provided, that no retroactive payment of 
contributions shall be allowed, except as provided in this Section. 
For purposes of this Section, the Social Security System shall, within 
ninety (90) days from the effectivity of this Act, promulgate guidelines for 
the mechanism of collecting the aforesaid premiums. 
11 


SEC. 19. Alternative Schemes of Providing Social Security. To further widen 
access to social security of Informal Sector workers especially in poor urban and 
rural areas, indigenous and alternative social protection schemes such as: 
"damayan', "tulungan", "saranay", small mutual benefit associations, and micro-
finance organizations as well as community-based micro-health insurance 
schemes initiated or participated by informal sector workers shall be supported 
and strengthened by concerned national agencies and LGUs so that these can 
be sustained, systematized and upscaled. 
An enal:lling environment for such organizations and schemes shall be 
developed. Toward this end, the Insurance Commission (IC) is hereby mandated 
to review its policies to make them more supportive of alternative schemes of 
providing social security. 
Other mechanisms to support such schemes shall be outlined by the 
Implementing Rules and Regulation of this Act. 
Chapter IV 
Prohibited Acts Concerning Engagement of Informal Sector Workers 
SEC. 20. Prohibition Against Night Work. 
Worker of minor age shall not be 
allowed to render work between ten o'clock in the evening and six 0' clock in the 
morning of the following day. 
SEC. 21. Prohibition Against Work to be Undertaken. Worker of minor age shall 
not be allowed to render work beyond their mental and physical capabilities. 
SEC. 22. Prohibition Against Bonded Labor. A worker shall not be allowed to 
use hislher future services as collateral for any loan or advances made or to be 
made by said worker with the person who contracted his/her services. Likewise, 
no person shall be allowed to bind the worker to his/her continued employ as a 
form of payment for any loan or advances which he/she may have made with the 
former. 
Should there be an outstanding loan incurred and he/she decides to 
unilaterally terminate engagement, said loan or advance shall be paid by him/her 
to the person who contracted his/her services under the terms or conditions of 
their agreement. 
SEC. 23. Prohibition Against Labor Sub-Contracting. 
In no instance shall the 
person who engaged the services of an informal sector worker sub-contract the 
services of the latter to any third party. 
SEC. 24,. Prohibition Against Recruitment or Finders' Fees. 
Regardless of 
. whether the worker was sourced either through an employment agency or a third 
. party, s~id worker shall neither be charged nor levied a recruitment fee or finder's 
fee by'the aforementioned employment agency or third party. 
SEC. 25. Prohibition Against Hazardous Work and Conditions. Any worker shall 
not be engaged to work in any hazardous work, activity or undertaking, and 
neither shall he/she be exposed to hazardous working conditions. 
12 


For purposes of this Section, hazardous work or conditions shall include, but not 
be limited to the following: 
(a) any work which requires workers to render services beyond eight (8) 
hours without commensurate compensation; 
(b) any work or activity which exposes the worker to physical, emotional or 
sexual abuse; 
(c) any work which involves manual handling or transport of heavy loads; 
(d) any work in an unhealthy environment which exposes workers to 
hazardous substances, agents or processes, or to temperature, noise 
levels, or vibrations damaging to their health; 
(e) any work which requires workers to continuously render service during 
late nights; 
(f) any or all forms of slavery or practices similar to slavery, such as the 
sale and trafficking of persons, forced or compulsory labor, debt 
bondage and serfdom; 
(g) any use, procuring or offering of the worker for prostitution or 
pornography; 
(h~ any use, procuring or offering of the worker for the commission of any 
. offense or crime, particularly for the production and trafficking of 
narcotic drugs and substances as defined in the Dangerous Drugs Act; 
(i) 
any other type of work or activity which, by its nature or the 
circumstances in which it is carried out, is likely to jeopardize the 
health, safety, or morals of the worker; and 
U) any other type of work, activity, condition or undertaking that maybe 
hereinafter be defined as hazardous by the Department of Labor and 
Employment. 
SEC. 26. Prohibition Against Interference and Coercion. Any person is prohibited 
from committing any of the following acts of interference and coercion: 
(a) to prevent a worker from upholding or exercising his/her rights; 
(b) to prevent workers from joining or assisting organizations for purposes 
not contrary to law, in order to protect and defend their mutual interests 
and to obtain redress of grievances through peaceful concerted efforts; 
(c) .to prevent a worker from carrying out his/her duties or functions in an 
organization, or to penalize the same for any lawful action performed in 
that capacity; 
(d) to make calculated, serious and pre-meditated harassment and 
interference with the intention of intimidating or preventing the worker 
from performing his/her duties and functions; 
13 


(e) to make calculated, serious and pre-meditated harassment against, or 
to transfer, penalize or terminate the services of a worker without valid 
or legal ground; and 
, 
(f) to perform acts calculated to diminish the independence and freedom of 
. workers' organization to direct its own affairs. 
Chapter V 
Security in the Workplace of Vendors 
SEC 27. Designation of Workplaces. The Municipality or City, in coordination 
with their respective Informal Sector Local Development Office, after consultation 
with the vendors, the affected community, and other sectors or groups, shall 
identify and designate viable workplaces, and design a system of assigning 
spaces to registered vendors. In case the vendors shall prefer to conduct their 
business or enterprise within an identified private property, the local government 
unit shall negotiate with the owner of the identified private property for possible 
vending site and assist the parties in forging a memorandum of agreement in 
case they reach such agreement. 
Workplaces include markets, vacant areas within the vicinity of markets and 
other vacant public spaces which may be deSignated as allowable vending sites. 
The Municipal or City, within 60 days from the effectivity of this Act, shall cause 
the conduct of a survey to identify vacant area(s) for vending in their respective 
locality. 
The Sanggunian Panglungsod or Sayan shall, within 90 days after the survey 
and pursuant to the recommendation of the Informal Sector Local Development 
Office, pass an ordinance designating the workplace or workplaces. No 
workplace for vending purposes, however, shall be deSignated as such without 
prior consultation with the vendors, the affected inhabitants and other sectors. 
Local Government Units which have already established or designated viable 
workplaces for vendors prior to this Act is deemed to have complied with this 
provision of the Act provided that the aforesaid establishment or designation of 
the viable workplace have been undertaken after conSUltation with the vendors, 
the affected community and other sectors or groups. 
SEC 28.' Policy on Eviction and Demolition. Registered vendors who have no 
permanent or temporary vending site shall not be arbitrarily deprived of their 
livelihood by being unjustly ejected from their workplaces nor their stalls 
demolished without prior notice and consultation and provision of relocation to 
another viable workplace. The local government units, government agencies and 
instrumentalities shall not conduct demolition or eviction of the registered 
vendors without prior designation of their viable workplace. In case demolition or 
eviction is conducted without compliance with the requirements under this 
Section, the responsible person or officer who conducted or ordered the conduct 
of the same shall be held administratively liable under this Act. Any responsible 
person or officer who caused or ordered the destruction of any goods or products 
during the demolition or eviction shall also be administratively liable under this 
Act. 
In case demolition or eviction is warranted, the person or officer who 
conducts the same shall issue receipt of the itemized products, goods and other 
materials seized from the affected registered vendor. Any person or officer who 
14 


fails to issue receipt shall be administratively liable under this Act. No violence or 
unreasonable force shall be committed against women, children, senior citizens, 
persons with disabilities and other identities similarly situated in the course of 
eviction or demolition. Nothing herein shall deprive the aggrieved vendor the right 
to file criminal or civil action, whenever applicable, against the responsible 
person or officer. 
SEC 29. Relocation of Vendors. 
Before any public market is closed, sold or 
demolished, all market vendors with stalls and market vendors without stalls shall 
first be relocated by the city government or municipal government to a temporary 
or new public market. Notice of the intention to close, sell, or demolish any public 
market shall be made to all concerned vendors at least sixty (60) days before the 
actual transfer or relocation to another market site. Within the sixty (60)-day 
period, the city government or municipal government shall conduct consultations 
with the affected vendors on the selection of the relocation site' and the 
implementation of the relocation. 
SEC 30. Temporary Vending Site. Pending the designation of a viable vending 
area or areas, vendors occupying a public place or places not previously 
designated as vending site or sites shall be provided with a viable temporary site 
or sites by the city government or municipal government. Notice of temporary 
transfer shall be given to the vendors at least fifteen (15) days before the actual 
transfer. This shall likewise cover and apply to vendors who are granted with 
permits but whose workplaces are withdrawn from the list of allowable vending 
sites. Any change in the list of allowable vending sites shall only be done after 
consultations with the affected vendors. 
. 
SEC 31. Priority in the Assignment of Stalls. 
In the event that a new public 
market is constructed in place of an old market that is closed, sold, or 
demolished, market vendors with stalls displaced from their workplaces shall be 
given priority in the assignment of stalls in the new market. 
SEC. 32. Penalty for Non-compliance. 
Failure to implement the foregoing 
requirements and provisions of Sections 25, 26, 27, 28 and 29 shall render the 
responsible official administratively liable pursuant to Republic Act 7160 and 
other pertinent laws and criminally liable whenever applicable. 
Chapter VI 
Security in the Workplace of Small Transport 
SEC 33. Designation of Workplaces. The Municipality or City, in coordination 
with their respective Informal Sector Local Development Office, after consultation 
with the small transport groups, the affected community, and other sectors or 
groups, shall identify and designate viable routes and terminal of tricycle and 
pedicab within the municipality or city. Municipalities where habal habal is the 
only mode of transportation shall also designate viable routes and terminal for 
the same. 
Viable terminal shall be in proximity to public buildings, public markets, private 
markets, commercial districts or commercial establishments and other places 
which the public frequently visits. 
15 


The Municipal or City shall, within 60 days from the effectivity of this Act shall 
cause the conduct of a survey to identify vacant area(s) for terminals in their 
respective locality. 
For access and safety, specific lanes within the road and routes will be 
designated for use by tricycle, pedicabs and padyak. 
The Sanggunian Panglungsod or Bayan shall, within 90 days after the survey 
and pursuant to the recommendation of the Informal Sector Local Development 
Office, pass an ordinance designating the viable terminal of tricycle, pedicab, 
habal-habal and other members of the small transport as specified in Section 7 
(a) (v) of this Act. However, no designation of terminal shall be conducted without 
prior consultation with the small transport groups, the affected inhabitants and 
other sectors. 
Local Government Units which have already established or designated routes 
and terminals of tricycle and pedicab prior to this Act is deemed to have complied 
with this provision of the Act provided that the aforesaid establishment or 
designation of terminals have been undertaken after consultation with the small 
transport groups, the affected community and other sectors or groups. 
SEC 34. Relocation of Terminals. Designated terminals for tricycle and pedicab 
shall not be arbitrarily relocated without prior notice and consultation with the 
small transport groups, the affected community and other sectors or groups. 
Aside from the aforementioned requirements, relocation of terminals shall only be 
effective if the same is done through an ordinance. After the enactment of the 
ordinance relocating terminals for tricycle and pedicab, notice of intention to 
relocate terminals shall be made to all small transport groups and the affected 
community at least sixty (60) days before the actual relocation. 
SEC 35. Policy on Impounding of Vehicle. The tricycle, pedicab, habal-habal and 
other similar mode of transportation shall not be impounded for mere violation of 
license or registration or traffic rules and regulations unless the said vehicle was 
utilized to perpetuate or in the conduct of criminal activity/ies. In case of mere 
violation of traffic rules and regulations, a traffic violation ticket shall be issued to 
the erring driver without impounding the said vehicle. The responsible person or 
officer who violated this Section shall be administratively liable under this Act. 
Nothing· herein shall prohibit the aggrieved member of the informal sector from 
initiating a criminal or civil action against the responsible person or officer 
whenever such action is applicable. 
SEC. 36. Penalty for Non-compliance. 
Failure to implement the foregoing 
requirements and prOVisions of Sections 61 and 62 shall render the responsible 
official administratively liable pursuant to Republic Act 7160 and other pertinent 
laws and criminally liable whenever applicable. 
Chapter VII 
Security in the Workplace of Informal Sector Workers 
SEC 37. Policy on Eviction and Demolition. A home-based worker shall not be 
evicted from his/her home, which is his/her workplace, without valid or legal 
ground as provided in Republic Act 7279. 
However, in case eviction or 
16 


demolition is warranted under Section 28 of Republic Act 7279, the same shall 
be conducted after compliance of the following: 
(a) notice upon the affected persons or entities at least thirty (30) days 
prior to the date of eviction or demolition; 
(b) adequate consultations on the matter of resettlement with the duly 
designated representatives of the families to be resettled and the 
affected communities in the areas where they are to be relocated; 
(c) presence of local government officials or their representatives during 
eviction or demolition; 
(d) proper identification of all persons taking part in the demolition; 
(e) execution of eviction or demolition only during regular office hours from 
Mondays to Fridays and during good weather, unless the affected 
families consent otherwise; 
(f) no violence or unreasonable force shall be committed against women, 
children, senior citizens, persons with disabilities and other identities 
, 
similarly situated in the course of eviction or demolition. 
(g) no use of heavy equipment for demolition except for structures that are 
permanent and of concrete materials; 
(h) proper uniforms for members of the Philippine National Police (PNP) 
who shall occupy the first line of law enforcement and observe proper 
disturbance control procedures; and 
(i) adequate relocation, whether temporary or permanent; provided, 
however, that in cases of eviction and demolition pursuant to a court 
order involving underprivileged and homeless citizens, relocation shall 
be undertaken by the local government unit concerned and the 
National Housing Authority (NHA) with the assistance of other 
government agencies within forty-five (45) days from service of notice 
of final judgment by the court, after which period the said order shall be 
executed; provided, further, that should relocation not be possible 
within the said period, financial assistance in the amount equivalent to 
the prevailing minimum daily wage multiplied by sixty (60) days shall 
be extended to the affected families by the local government unit 
concerned. 
SEC. 38. Penalty for Non-compliance. 
Failure to implement the foregoing 
requirements and provision of Section 34 shall render the responsible official 
administratively liable pursuant to Republic Act 7160 and other pertinent laws 
and criminally liable whenever applicable. 
Chapter VIII 
Rights and Benefits of Non-Corporate Construction Workers, Own Account 
or Self-employed Informal Sector Workers 
SEC. 39. Right to Fees Earned. While there is no standard rate for the fees of 
informal sector workers, the fees, in whatever mode it is made, shall not be 
below the applicable minimum wage of the region where they are covered. 
Payment of fees shall be made directly to the Informal Sector worker. 
No 
deductions from said fees shall be made by the person who contracted the 
informal sector worker except those specifically authorized by the latter. The 
expressed written consent of the informal sector worker shall first be secured 
before any deduction is made. 
17 


For non-corporate construction workers, security in the workplace primarily refers 
to the principle of First-Priority Hiring by the Municipal and City government for 
infrastructure and construction activities and projects. 
SEC. 40. Fees Rate. The Bureau of Working Conditions-DOLE shall develop and 
implement capacity building program on the conduct of time and motion studies 
as a basis of standardizing rates of fees. Likewise, the Regional Wage Boards 
shall do the same to determine fees of workers of the informal sector micro-
entrepreneurs. 
SEC. 41. Access to Education and Training. An Informal Sector worker shall not 
be deprived of formal or non-formal 'education during day-off or any other time 
mutually agreed by the parties. 
The Department of Education (DepEd) or Commission on Higher Education 
(CHED) shall extend its services of Study-Now, Pay-Later Program to the 
Informal Sector worker and his/her dependents. 
Chapter IX 
Security in the Workplace of Small Farmers 
SEC. 42. Protection of Agricultura/ Lands. The Municipality/City in coordination 
with the Department of Agrarian Reform shall protect all agricultural lands from 
conversion or reclassification to non-agricultural uses. Special Economic Zones 
Sites, Tourist Sites or Socialized Housing Sites shall not be allowed in irrigated 
and irrigable lands. The Municipality/city shall include in their Comprehensive 
Land Use Plan (CLUP) all the agricultural lands as protected zones. 
SEC . .43. Local Agriculture Support Services. The Municipality/City shall provide 
capacity building training, access to collateral-free and gender-balanced credit, 
marketing assistance and infrastructure development for small farmers and 
agrarian reform beneficiaries within their jurisdiction. LGUs are mandated to 
establish a farmers market or a Bagsakan where the local farmers can directly 
sell their products to the public. 
SEC. 44. Protection for Tenants. The LGUs shall provide assistance and 
protection to tenants in agricultural lands whose landowners are not following the 
provision in RA 3844. There should be no eviction of tenants from the farm if the 
landowner unilaterally denies or terminates the tenancy relationship. The LGUs 
shall make an inventory of all agricultural lands under leasehold. LGUs shall 
enforce the security of tenure of tenants, right of redemption and right of first 
refusal on the subject land. 
SECA5. Promotion of Sustainable Agriculture. LGUs shall encourage and 
provide incentives to their constituents who want to engage or is engaging in 
sustainable and/or organiC farming. All idle private or public lands within their 
jurisdiction shall be cultivated or planted with organiC food crops like corn, root 
crops or vegetables. 
18 


Chapter X 
Security in the Workplace of Marginalized Fisherfolks 
SECA6. Establishment of Fisherfolk Settlement Areas. LGUs in coordination with 
NHA, shall establish and create fisherfolk settlement areas on private or public 
lands, specifically near the fishing grounds, for municipal fisherfolk with security 
of tenure. 
SECA7 .. Preference to Marginalized Fisherfolk. The use of the municipal waters 
shall be exclusive for marginalized fisherfolks. Marginalized fisherfolks shall be 
given priority in the application of permits and licenses for the establishment of 
fish pens, fish corrals, fish traps, shellfish culture or similar structure for culture of 
marine products within the municipal waters. There should be no demolition of 
the abovementioned structures owned by marginalized fisherfolk without 
providing advance notice and an alternative source of income. 
SEC. 48. Requirement for Establishment of Marine Protected Area. Consent from 
the affected fisherfolks shall be required before an area be declared a marine 
protected area or a fish sanctuary by the national or local government unit. 
SEC. 49. Protection of Mangrove Forest. Conversion of any mangrove forest to 
reSidential, commercial or industrial use shall be prohibited. LGUs must allocate 
their local funds for mangrove reforestation. 
SEC. 50. Regulation of Beach Fronts. LGUs shall ensure that no beach within 
their jurisdiction is exclusive for the use of resort guests or private persons only. 
Beach fronts and foreshores are public domain and may be accessed and used 
by any person especially marginalized fisherfolks. 
Title III 
INSTITUTIONAL MECHANISM 
Chapter I 
Special Allocations for Development Initiatives 
SEC. 
51. 
Special Allocations for Development Initiatives. The national 
government shall allocate at least ten (10%) percent of its annual national budget 
to be appropriated proportionately in accordance with the corresponding internal 
revenue allocation (IRA) of respective local government units. The additional ten 
percent (10%) allocation is separate from the annual and current IRA of LGUs. 
, 
The additional ten percent (10%) allocation shall be utilized by the LGUs for the 
implementation of livelihood programs and other social services specifically for 
the informal sector pursuant to the provisions of this Act. Priority shall be given to 
income generating programs for the poorest of the poor. The program shall focus 
on the mobilization of the informal sector with no assets to engage in self-
employment and income generating activities. 
19 


SEC, 52, Sourcing and Adopting Development Initiatives, Other sources of funds 
to be used exclusively for initiatives addressing the needs and empowerment of 
workers in the informal sector shall be identified in the Implementing Rules and 
Regulations (IRR) of this Act and may include the following: 
(a) Government financial institutions and mechanisms such as the Land 
Bank of the Philippines (LBP), Development Bank of the Philippines 
(DBP), National Livelihood Support Fund (NLSF), Ouedan Rural Credit 
and Guarantee Corporation (OCGC) shall set aside a specific 
percentage of their loan portfolio to informal sector enterprises and 
shall give priority to women-led informal sector enterprises by providing 
loans at an interest of not more than twelve percent (12%) per annum 
consistent with the spirit of Republic Act 7882, The aforementioned 
government financial institutions shall formulate guidelines within 
ninety (90) days from the effectivity of this Act to facilitate the 
application of informal sector business or enterprises of the aforesaid 
loan portfolio, 
The guidelines shall provide simple procedure and 
requirements in the application of informal sector business or 
enterprises in accordance with the framework and principles of this 
Act. 
(b) The Department of Social Welfare and Development (DSWD) shall 
strengthen its Self-Employment Assistance Program (SEAP) to uplift 
and empower women in poverty, particularly those in the informal 
economy, by adopting an integrated, credit-plus approach to micro-
, finance, 
(c) The Small Business Guarantee and Finance Corporation (SBGFC) 
created under Republic Act (RA) No, 8289 shall assist in the sourcing 
and adopting of development initiatives for competitive enterprises in 
terms of finance, technology, production, management and business 
linkages, It shall also provide and promote, develop and widen in both 
scope and service reach various alternative modes of financing for 
informal economy business activities or enterprises, including but not 
limited to: direct and indirect project lending, venture capital, financial 
leasing, secondary mortgage andlor rediscounting of loan papers to 
such business activities or enterprises, and crop production financing, 
The Corporation shall guarantee loans obtained by the qualified worker 
or business activity or enterprise, under such terms and conditions 
adopted by its Board, 
(d) The Department of Agriculture, through the Agricultural Credit Policy 
Council (ACPC), created pursuant to Republic Act 7607, shall give 
subsidies for the education and training of small farmers on credit 
awareness, loan acquisition and loan repayment. 
Pursuant to 
aforesaid law, a portion of all loanable agricultural funds shall be 
utilized for direct lending to small farmers for their production, 
processing, post harvest and marketing requirements, 
(e) The Department of Trade and Industry (DTI) shall contribute to enable 
the development of business environment that shall include initiatives 
such as supply chain and market outlets, and schemes to develop 
Special Credit Window/s to upscale informal sector enterprises, 
(f) The Department of Science and Technology (DOST) shall support 
technology-related initiatives for workers in the informal economy, 
20 


SEC, 53, Eligibility for Government Assistance, To qualify for assistance, 
incentives and grants, a worker or business activity or enterprise should be: 
(a) duly registered with the appropriate agency in the LGU where they are 
actively operating and has paid the necessary fees for registration and 
accreditation from the office of the municipal or city treasurer 
concerned; 
(b) one hundred percent (100%) owned and capitalized by Filipino 
citizens, be it single proprietorship or a partnership venture; and 
(c) fall under the above-mentioned sub-categories of Informal Sector; 
SEC, 54, Exclusivity of Government Programs, The government shall ensure that 
programs of financing, grants and other similar incentives shall be exclusively 
extended to an accredited Informal Sector worker and business activity or 
enterprise, 
SEC, 55, Entitlement of Government Procurements, The government shall work 
for a mechanism to ensure that duly accredited Informal Sector worker or 
business activity or enterprise is entitled to a share of at least ten percent (10%) 
of the total value of procurement of goods and services supplied to the 
government, its bureaus, offices and agencies annually: provided, that prices and 
quality of goods offered by the above-mentioned accredited Informal Sector 
worker or business activity or enterprise are competitive, 
SEC, 56, Coordination with LGUs, Pursuant to the provisions of Republic Act No, 
7160, 
the 
local 
chief executives in 
coordination with 
Informal Sector 
representatives and appropriate agencies shall formulate specific plans that will 
address the socio-economic needs of the informal sector and incorporate them in 
their respective provincial, city and municipal development plans, 
NGOs whose primary ends are advocacy of issues or realizations of specific 
developmental objectives for the informal sector workers shall be accredited as 
such by the local sanggunian of the LGU where they operate, Such accreditation 
shall afford the aforementioned NGO the right to partiCipate in the election of 
non-government organizations' representative in the local development councils 
of the barangay, municipality, city and province pursuant to Section 108 of 
Republic Act 7160, 
, 
The looal development councils shall recognize workers in the informal sector as 
one of the sectors that they may call or form as a sectoral committee to assist 
them in the performance of their functions pursuant to Section 112 of Republic 
Act 7160, 
SEC, 57, Tax Exemption. A duly registered Informal Sector worker or 
susbsistence livelihood-enterprises shall be exempted from all taxes, national or 
local, including all imposts, fees, licenses and permits (including building permits) 
except real property taxes and capital gains from sale of real property (and 
shares of stocks), and duties and taxes on importations, 
21 


Chapter II 
Informal Sector Development Council 
SEC. 58. Creation of an Informal Sector Development Council. There is hereby 
created an Informal Sector Development Council (ISDC), herein otherwise 
referred to as the Council, which shall be attached to the National Economic 
Development Authority (NEDA) and shall be constituted within sixty (60) days 
after the approval of this Act. 
The Council shall be the primary agency responsible for the promotion, growth 
and development of the Informal Sector in the country by way of facilitating and 
coordinating national efforts to promote the sector's viability and growth, 
including the provisions of an integrated program for skills enhancement, literacy 
and education, health services, social welfare and services, assistance in the 
tapping of local as well as foreign funds, and other functions relative to the 
attainment of the objectives and policy of this Act. 
The Council shall be separate and distinct from the National Fisheries and 
Aquatic Resources Management Council (NFARMC) created under Republic Act 
8550. 
' 
SEC. 59. Composition. The Council shall be headed by the Director General of 
the National Economic Development Authority (NEDA) as Chairperson, and elect 
from among themselves a Vice-Chairperson to preside over the Council 
meetings in the absence of the Chairperson. The members shall be the following: 
Ex Officio members: 
(a) Secretary of Department of Trade and Industry (DTI); 
(b) Secretary of Department of Agriculture (DA); 
(c) Secretary of Department of Labor and Employment (DOLE); 
(d) Secretary of Department of Social Welfare and Development (DSWD); 
(e) Secretary of the Department of Interior and Local Government (DILG); 
(f) Secretary 0 f Department of Science and Technology (DOST); 
(g) Lead Convenor of the National Anti-Poverty Commission (NAPC); 
(h) Director General of the Technical Education and Skills Development 
Authority (TESDA); 
(i) Director of the Bureau of Fisheries and Aquatic Resources (BFAR); 
Ul Director General of National Statistics Office (NSO); 
(k) Chairperson of the Social Security System (SSS); 
(I) Chairperson of Phil Health; 
(m)Chairperson of the National Commission on the Role of Filipino 
Women (NCRFW); 
(n) Chairperson of the National Commission on Indigenous People 
(NCIP); 
(0) Chairperson of the Philippine Commission on the Urban Poor (PCUP); 
Regular members: 
(p) Fifteen (15) representatives from People's Organizations (POs) of 
workers in the informal sector, five (5) each to represent Luzon, 
Visayas and Mindanao with representation of the informal sector 
subgroups 
of vendors, 
small 
transport, 
marginalized 
farmers, 
marginalized fisherfolks and home-based worker or non-corporate 
construction workers to be elected in a National Assembly of informal 
22 


sector organizations duly called for that purpose; provided that at least 
fifty percent (50%) of the fifteen (15) representatives are women; 
(q) Six (6) representatives from non-government organizations (NGOs) 
working with Informal Sector, two (2) each to represent Luzon, Visayas 
and Mindanao to be appointed by the Chairperson from arnong those 
recommended by members of the informal sector; provided that at 
least fifty percent (50%) of the six (6) representatives are women; and 
(r) One representative from the private sector at large who has a proven 
track record in catering to the needs of the informal sectors and to be 
appointed by the Chairperson frorn among those recommended by 
members of the informal sector. 
An ex officio member of the council who possesses a cabinet rank shall 
designate an undersecretary or assistant secretary as his/her permanent 
alternate representative in case he/she fails to attend meetings in the exigency of 
his/her official function in the department. 
The ex officio members of the council shall not have voting rights in any matter or 
issue subjected to voting of the coundl as this is a right reserved only to regular 
members of the council to ensure that decisions shall reflect the sentiments of 
the informal sector themselves. However, the Chairperson or Vice-Chairperson, 
in the absence of the former, shall have. the right to vote in case of tie. 
The regular members of the council may conduct a meeting excluding the ex 
officio members for purposes of voting on matters concerning the informal sector. 
Elected representatives of the private sector, non-government organizations and 
informal sector organizations shall serve as regular members of the council for a 
term of three (3) years without re-election. 
In case of vacancy for whatever 
cause or reason, the Chairperson shall appoint a representative to fill the 
vacancy from among those recommended by members of the informal sector. 
Appointment to any vacancy shall be only for the unexpired term of the 
predecessor. Appointment for the unexpired term shall not bar the appointee 
from running during the next regular election. 
The representatives from the private sector, non-government organizations and 
informal ,sector organizations' shall be entitled to receive a per diem of two 
thousand 
pesos 
(P2,000.00) 
per 
meeting 
exclusive 
of expenses 
for 
transportation and accommodation. The Council shall meet once every two 
months or it may call for special meetings as the need may arise; provided, that 
the frequency of such special meetings shall not exceed four (4) times annually. 
The NEDA shall allocate five million pesos (P5,000,000) out of its savings for the 
initial operating expenses of the Council, after which the Council'S budget shall 
be included in the department's annual appropriation. 
The initial election of representatives of the informal sector shall be conducted 
within six (6) months from the effectivity of this Act. The implementing rules and 
regulations (IRR) of this Act shall contain the guidelines for the formation of 
members of the council, the election process, the nomination process, recall 
procedures and such other mechanisms to ensure accountability of the 
representatives. 
SEC. 60. Mandate of the Council. The Council shall have the following 
mandates: 
23 


(a) develop a system of registration and accreditation of members of the 
Informal Sector, with attention to women workers, in accordance with 
the standards and provisions of this Act; 
(b) provide guidelines for the LGUs' implementation of a fair and credible 
system of evaluation, accreditation, review and assessment, merit 
promotion, rendering of grant and incentive awards and other policies 
relative to the effective and efficient implementation of this Act; 
(c) further develop the existing Philippine Country Program for the 
development and protection of the Informal Sector workers towards 
institutionalizing comprehensive, rights-based, gender-responsive and 
child friendly programs and policies for the Informal Sector. Towards 
this end, the Council must ensure government capacity to undertake 
, and implement this program for the Informal Sector; 
(d) develop 
rights 
and 
gender-based 
monitoring 
and 
evaluation 
mechanisms to ensure that programs and policies are implemented 
effectively and efficiently; and ensure gender-responsiveness of 
interventions toward harnessing full potentials of women Informal 
Sector workers; 
(e) coordinate with LGUs for the development and implementation of 
periodic evaluation of all accredited Informal Sector workers, taking 
into account their accomplishments, capabilities and potentials, the 
results of which shall be used as bases for evaluation, registration, 
accreditation for the grant of awards and incentives, training and 
retraining; 
(f) monitor the income of the LGUs generated from the members of the 
informal sector through the LGUs' periodic report submitted to the 
Council; 
(g) establish a performance appraisal system for all accredited Informal 
Sector workers which shall be the basis for granting or renewal of 
incentives, rewards and recognition, training and development, 
including adequate mechanisms to ensure their active participation and 
involvement; 
(h) ensure effective participation of the Informal 'Sector workers through 
the establishment of regular consultations at the national, regional and 
provincial level among the organizations of Informal Sector workers to 
determine specific issues and problems affecting their sector and 
monitor/evaluate implementation of programs and policies. 
(i) establish and develop a centralized and sex-disaggregated database 
system to effectively guide policy formulation relative to the Informal 
Sector workers. The databank shall be available for public use and 
shall include but not be limited to the following: 
i.1. masterlist of workers in the informal sector classified according to 
geography (urban or rural based), premises (home based or non 
home based), gender (male, female), vulnerability (children, elderly 
or person with disability), industry (industrial, commercial, services 
or agricultural), occupation (fisherfolks, farmers, construction, 
drivers, 
vendors, 
laborers or sales personnel), 
nature of 
employment (casual, contractual, seasonal, permanent/regular or 
24 


pakyaw/commission basis/boundary system) and roles/functions 
(own-accountlself-employed 
or 
subsistence/marginal 
employment). 
i.2. list of government and non-governmental organizations which 
provide educational, socio-economic and legal services to the 
Informal Sector; 
i.3. sex-disaggregated statistical profile of various Informal Sector 
workers based on age, location, type of work, average monthly 
income, number of hours worked, and other statistical information; 
i.4. statistical data on informal enterprises, including capitalization and 
sources of capital, number and status of workers, average income; 
i.5. database of the needs and problems of the informal sector in 
general and database of particular needs of women and children in 
the Informal Sector; and 
i.6. compilation of existing laws and programs affecting the interest 
and welfare of the Informal Sector. 
OJ develop and implement a communication plan including massive 
information dissemination activities targeting Informal Sector workers 
in various regions towards making them understand and appreciate the 
benefits this Act may bring them; 
(k) make necessary adjustment of the applicable amount of total asset 
value as provided under Section 4 (d) after five (5) years from the 
enactment of this Act and five (5) years thereafter, based on prevailing 
poverty threshold and other established standards in determining 
subsistence level of living; 
(I) formulate, 
implement, coordinate and 
monitor all 
non-financial 
government programs, including fee-based services, to support and 
promote entrepreneurial spirit among the poorest of the poor; and 
, 
(m)develop alternative conflict or dispute resolution systems and 
mechanisms, which shall aim to promote dialogue, conciliation and 
mediation while protecting the rights of Informal Sector workers. 
SEC. 61. Authority of the Council to Solicit Assistance form Various Agencies. 
The Council may, from time to time, call upon the participation of any government 
agency or bureaucracy in its deliberations especially when such agency is 
directly or indirectly concerned with and/or affecting the growth and development 
of the Informal Sector in any manner. 
SEC. 62. 
Council Secretariat. The Council, through the Chairperson, shall 
designate, in his capacity as the Director of the NEDA, any division or bureau 
within the NEDA to act as the Council Secretariat and shall have the following 
duties and functions: 
(a) to prepare in coordination with LGUs and other local government 
agencies, and recommend annual as well as medium-term Informal 
Sector Enterprise Development Plans for the approval of the Council; 
(b) to coordinate the preparation of position papers and background 
materials for discussion or approval during Council meetings; 
25 


(c) to assist the Council in coordinating and monitoring the policies, 
programs and activities of all government agencies with respect to the 
implementation of this Act; 
(d) to prepare, collate, integrate all inputs to the Council's yearly report on 
the status of the Informal Sector business activities or enterprises in 
the country; 
(el to submit periodic reports to the Council on the progress and 
accomplishment of its work programs; and 
. (f) t 0 perform ad hoc functions as authorized by the Council. 
SEC. 63. Rationalization of Programs. The Council shall conduct continuing 
review of government programs for the poorest of the poor and the Informal 
Sector and submit to Congress and the President a report thereon together with 
its policy recommendations. 
Chapter III 
Informal Sector Local Development Office 
SEC. 64. Informal Sector Local Development Office. The Informal Sector Local 
Development Office (ISLDO) shall be established in every province, municipality 
and city to enhance the Informal Sector access to assistance and support. 
For this purpose, the DTI, Technical Education and Skills Development Authority 
(TESDA) and Technology and Livelihood and Resource Center (TLRC) shall 
develop livelihood programs that will harness the skills of the Informal Sector 
workers. 
The aforesaid agencies shall conduct human resource development program and 
management in the following areas: 
(a) adequate facilities and resources to render quality social service; 
(b) opportunities for Informal Sector workers to grow and develop their 
potentials and experience a sense of worth and dignity in their work; 
(c) mechanisms for democratic consultations; 
(d) upgrading of working conditions; and 
(e) allocation of funds for the participation of Informal Sector workers in 
skills training and workshops and other similar activities as part of their 
, continuing advancement. 
SEC. 65. Functions of Informal Sector Local Development Office. The Informal 
Sector Local Development Office shall have the following functions: 
(a) prepare an over-all development plan and work program that will 
address the needs, rights and capacities of the Informal Sector 
workers and incorporate them in their respective provincial, municipal 
and city development plans; 
26 


(b) in consultation with organizations of Informal Sector workers in the 
area, identify specific needs of the sector and recommend appropriate 
measures to be taken; 
(c) ensure registration and accreditation of the Informal Sector workers, 
especially women; 
(d) monitor, assess and evaluate implementation of the plans and 
programs as well as the performance of the sector in the areas; 
(e) coordinate with 
other local 
offices, 
private sector and 
other 
organizations with existing programs for the Informal Sector workers 
for .integration and convergence; 
(f) conduct training programs which will provide new ideas to the Informal 
Sector workers and upgrade the technical and entrepreneurial skills of 
others who are already in the field; 
(g) implement consciousness-raising and capability building activities to 
include information on workers', women's and children's rights and 
leadership training; 
(h) provide technical support and access to credit, market, technology, 
social security schemes, and training for micro-entrepreneurs, small 
'transport, small farmers, marginalized fisherfolks, 
non-corporate 
construction workers and other skilled workers; 
(i) train pools of community trainers in business counselling and 
awareness-raising on occupational safety and health hazards, risks 
and social security; 
U) support organizing activities among Informal Sector workers; 
(k) establish databanks on human resources and skills registry to be used 
as tools for LGU planning and budgeting; 
(I) provide offices and other necessary resources to support organizing, 
advocacy, training and other activities of local organizations of Informal 
Sector workers; 
(m)train Informal Sector workers on negotiation skills and on the conduct 
of time and motion studies to determine proper wages; and 
(n) provide services, to include but not limited to counselling and legal 
assistance for the furtherance of this Act, 
(0) ensure that the LGU is capaCitated to undertake and implement rights-
based and gender-responsive programs for the Informal Sector. 
The Local Government Units shall annually allocate at least two hundred fifty 
thousand pesos ( P250,000.00) or at least five percent (5%) of the twenty 
percent (20%) Development Fund of their Internal Revenue Allotment or 
whichever is higher for the operations and maintenance of the ISLDO. 
The LGUs shall submit to the ISDC the annual report of disbursement of the fund 
allocations for Informal Sector as specified in this section and section 40 
27 


paragraph (g) of this Act. In case of failure on the part of the LGU to submit the 
annual report to the ISDC, the local chief executive and other officers of the LGU 
shall be held administratively liable. 
SEC. p6. Composition. 
The local chief executives shall act as the primary 
overseers to the overall operations of ISLDO, while Informal Sector workers shall 
be represented by at least five (5) representatives from POs of IS workers; 
provided that each sub-group (vendor, small transport, 
small farmers, 
marginalized fishersfolks and home-based workers! non-corporate construction 
workers) shall have one (1) representative each in the ISLDO, whenever 
applicable. However, in case of highly urbanized cities, there shall be ten (10) 
representatives of informal sector in the ISLDO, with two (2) representatives 
coming from each sub-group. 
The representatives shall be elected in a general assembly of each sub-group 
duly called for the purpose of election of a representative!s to the ISLDO. The 
elected representatives shall serve as such for a term of three (3) years without 
re-election. 
In case of vacancy for whatever cause or reason, the local chief 
executive shall appoint a representative to fill the vacancy from among those 
recommended by members of the informal sector. Appointment to any vacancy 
shall be only for the unexpired term of the predecessor. 
Chapter IV 
Informal Sector Comprehensive and Integrated Plan 
And Inter-Agency Networking 
SEC. 67. Comprehensive Plan. The Informal Sector Development Councilor 
IS DC shall be tasked to formulate a Ten-Year Comprehensive and Integrated 
Plan on the impact of globalization to the informal sector. It shall determine and 
recommend the necessary safety nets needed by the informal sector to prepare 
them for the possible effects of globalization. 
SEC. 68. Inter-Agency Networking. The NEDA shall provide for and lead the 
inter-agency networking 
system 
among 
the different 
departments 
and 
instrumentalities of government, should the same be required in the continuing 
efforts to protect the interests, rights and privileges of Informal Sector workers. 
The Council· in cooperation with the DepEd and CHED, shall design a 
comprehensive and integrated program for Informal Sector workers to give them 
opportunity to pursue free education. 
The cooperatives, through the help of the Department of Trade and Industry 
(DTI), TESDA and TLRC shall inform Informal Sector workers of opportunities for 
market and technology access and the availability of livelihood training seminars 
to respond to Informal Sector needs and potentials. 
The DSWD shall, within a period of one (1) year from the date of effectivity of this 
Act, institute a program designed specifically to provide emergency services 
specifically to women and the minor Informal Sector worker who are in need of 
custody, shelter, counseling, or medical, psychological, legal and rehabilitative 
services. 
28 


The DSWD shall, upon the recommendation of the DOLE, effect the repatriation 
of minor-aged Informal Sector workers who voluntarily seek government 
protection against abuse and exploitation or upon report or discovery of the 
same. The cost of such repatriation shall be borne by the DSWD. The DSWD 
and DOLE shall formulate the rules and regulations governing the emergency 
repatriation of the same. 
For this purpose, a Repatriation Fund is hereby created and established under 
the administration and control of the DSWD in the amount of five million pesos 
(P5,000,000) to be taken from the President's Social Fund. 
SEC. 69. Consultations with Informal Sector Organizations. The Informal Sector 
Development Council or ISDC, in coordination with other concerned agencies 
and LGUs through the Informal Sector Local Development Office, shall conduct 
annual national, regional and provincial consultations among the Informal Sector 
organizations to determine the specific issues and problems affecting their 
sector. The Council shall channel Informal Sector concerns to the appropriate 
agencies and provide the necessary recommendations to the executive and 
legislative departments. 
, 
SEC .. 70. 
Establishment of Informal Sector Database. The Council, 
in 
coordination with the National Statistical Coordination Board or NSCB, shall 
establish and develop a centralized database system to effectively work on policy 
formulation and policy concerns relative to the Informal Sector. The NSCB shall 
regularly update the said centralized database system. The database shall 
include but is not limited to the following: 
(a) masterlist of workers in the informal sector classified according to 
geography (urban or rural based), 
premises (home-based or non 
home-based), gender (male, female), ethnicity (etcho-linguistic group 
or indigenous community) vulnerability (children, elderly or person with 
disability), industry (industrial, commercial, services or agricultural), 
occupation 
(fisherfolks, 
farmers, 
construction, 
drivers, 
vendors, 
laborers 
or sales 
personnel), 
nature of employment (casual, 
contractual, 
seasonal, 
permanent/regular or 
pakyaw/commission 
basis/boundary 
system) 
and 
roles/functions 
(own-account/self-
employed or subSistence/marginal employment). 
(b) List of government and non-governmental organizations which provide 
educational, socio-economic and legal services to the Informal Sector; 
(c) Sex-disaggregated statistical profile of various Informal Sector workers 
based on age, location, type of work, average monthly income, number 
of hours worked, and other statistical information; 
(d) Statistical data on informal enterprises, including capitalization and 
sources of capital, number and status of workers, average income; 
(e) Database of the needs and problems of women and children in the 
Informal Sector nationwide; and 
(f) Compilati on of existing laws and programs affecting the interest and 
welfare of the Informal Sector. 
29 


The public shall be allowed to have access to the said data provided that they 
shall abide with the regulations that will be set by the Council. 
SEC. 71. Establishment of a Shared Government Information System for 
Informal Sector. An inter-agency committee, composed of the Department of 
Agriculture (DA), Department of Interior and Local Government (DILG), the 
Department of Labor and Employment DOLE), the National Statistics Office 
(NSO), the Informal Sector Development Council, the Informal Sector Local 
Development Office, shall be established to implement a shared government 
information system for the informal sector. The inter-agency committee shall 
initially make available to itself the information contained in existing data 
bases/files. The second phase shall involve linkaging of computer facilities in 
order to allow free flow of data exchanges and sharing among concerned 
agencies. 
Title IV 
MISCELLANEOUS AND FINAL PROVISIONS 
SEC. 72. Violation of Prohibited Acts. Any person who commits the prohibited 
acts mentioned in Sections 18, 19, 21, 22, 23 and 24 shall be punished by a fine 
of two hundred thousand (P 200,000) pesos or by imprisonment for six (6) years, 
or both in the discretion of the court. 
Violations of the prohibited act mentioned in Section 20 shall be punished 
pursuant to Republic Act 9208. 
SEC. 73. Implementing Rules and Regulations. The departments and agencies 
charged with carrying out the provisions of this Act shall, within ninety (90) days 
after the effectivity of this Act, formulate the necessary rules and regulations for 
its effective implementation. 
SEC. 74. Repealing clause. All laws, decrees, executive orders, rules and 
regulati9ns, or parts thereof inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly. 
SEC. 75. Separability of proviSions. If, for any reason, any section or proviSion of 
this Act is held unconstitutional or invalid, the other sections or provisions hereof 
shall not be affected thereby. 
SEC. 76. Effectivity Clause. - This Act shall take effect after fifteen (15) days 
from its publication in the Official Gazette or in at least two (2) national 
newspapers of general circulation whichever comes earlier. 
Approved, 
30