SIXTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES
HBno,_ 3729

Introduced by HONORABLE MARK A. VILLAR

EXPLANATORY NOTE

Micro, small, and medium enterprise (MSME) in the Philippines is defined as any
business activity/enterprise engaged in industry, agri-business/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: a micro enterprise has an asset value of not more than
PHP3,000,000, a small enterprise from PHP3,000,001 to PHP15,000,000, and a
medium enterprise from PHP15,000,001 to PHP100,000,000,

As the backbone of the Philippine economy, the MSME sector comprises about
99.6 percent of all registered firms nationwide, employs 62.3 percent of the labor force,
and contributes 32 percent to the economy.

Particularly, Micro enterprises comprised 91.6 percent (709,899) of the total
number of MSMEs while small and medium enterprises accounted for 8 percent
(61,979) and 0.4 percent (2,786), respectively. In terms of employment generation,
MSMEs provided a total of 3,532,935 jobs in 2010 or 62.3% of the total jobs generated
by all types of business establishments. Large enterprises generated 2,136,362 jobs
Among MSMEs, micro enterprises created 1,729,100 (30.5%) jobs while small and
medium enterprises generated 1,417,672 (25%) and 386,163 (6.8%) jobs, respectively,
as per NSO figures.

Considering the huge contribution to the economy, the "Go Negosyo Act of 2014"
seeks to further strengthen the MSME sector by providing this sector with better
incentives and benefits, granting more access to focused support for enhanced
business performance, promoting support to key growth industries, and facilitating
financing support programs that are much-needed for growth. Further, the Act promotes
more participation from the private sector in the MSME Development Council


Thus the legislature is urged to pass the Go Negosyo Act of 2014. Ultimately, this
Act can help improve the design and implementation of the nation's MSME sector. This
has the potential to assist MSMEs to integrate themselves in the formal economic
market, which will bring forth more job opportunities and the enhanced growth of our
nation’s economy.

Omit Voor

MARK A. VILLAR


SIXTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES
H.BNo,__ 3729

INTRODUCED BY HONORABLE MARK A. VILLAR

AN ACT PROMOTING THE REDUCTION OF POVERTY THROUGH THE
DEVELOPMENT OF MICRO, SMALL AND MEDIUM
ENTERPRISES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. This Act shall be known as the "Go Negosyo Act of
2014."

SECTION 2.Declaration of Policy. It is hereby declared the policy of the State
to foster national development, promote inclusive growth, and reduce poverty by
encouraging the establishment of micro, small and medium enterprises (MSMEs) that
facilitate local job creation and production in the country, MSMEs increase income for
poor households and build both business equity and personal assets over a period of
time. To this end, the State shall develop plans and initiate means to ease the
constraints on the establishment of MSMEs in order to rationalize the existing
bureaucratic regulations, providing greater incentives and benefits to MSMEs, and
strengthening the Micro, Small and Medium Enterprise Development (MSMED) Council

SECTION 3. Establishment of Negosyo Centers. - There shall be established
under the supervision of the Micro, Small and Medium Enterprises Development
(MSMED) Council a “Negosyo Center’ in all provinces, cities and municipalities. The
MSMED Council shall encourage public-private partnerships in the establishment and
management of Negosyo Centers. In applicable areas, the existing Micro, Small and
Medium Enterprise (MSME) Centers shall continue to operate as Negosyo Centers
subject to the provisions of this Act. The Negosyo Centers shall be responsible for
promoting ease of doing business and facilitating access to services for MSMEs within
its jurisdiction. The MSMED Council, through the regional offices of the Department of
Trade and Industry (DT!) shall perform oversight functions and shall assign personnel to
fulfill the functions of the Negosyo Centers.


SECTION 4. Function of Negosyo Centers.- Negosyo Centers shall have the
following functions:

(a) Promote ease of doing business and access to service for MSMEs within its
jurisdiction;

(b) Coordinate and facilitate processes of government related to the set-up and
management of MSMEs;

(c) Accept and facilitate all registration applications of MSMEs;

(d) Coordinate with the respective local government units and liaise with
concerned government agencies to process the duly accomplished forms
submitted by the MSMEs;

(e) Integrate a unified business process system for MSMEs;

(f) Monitor and recommend business-process improvements for MSMEs.

(g) Encourage government institutions that are related to the business application
process to help promulgate information regarding the Negosyo Center;

(h) Supply information and services in training, financing and marketing;

(i) Support private sector activities relating to MSMEs development;

(j) Co-organize with the local chambers of commerce and other business
organizations a mentoring program for prospective and current entrepreneurs

and investors;

(k) Build local support networks and establish market linkages for MSME
development;

(I) Coordinate with schools and organizations on the development of youth
entrepreneurship training program;

(m)Facilitate access to grants and other forms of financial assistance, shared
service facilities and equipment, and other support for MSMEs;

(n) Ensure labor-management guidance, assistance and improvement of the
working conditions of MSMEs;

(0) Establish a databank which shall be a source of all information necessary for
project monitoring, research and policy studies and information dissemination
campaigns;


(p) Map out all information and services essential to prospective entrepreneurs
and prospective investors especially in key value chains and economic
subsectors within its jurisdiction;

(q) Establish a feedback mechanism among the MSMEs in the respective
jurisdiction of the Negosyo Centers; and

(r) Conduct other programs or projects for entrepreneurial development in the
country aligned with the MSMEs development plan.

SECTION 5. Registration, -
(a) Micro, Small and Medium Enterprises

1. A.unified and simplified business registration form shall be created by
the DTI and shall be made available in all Negosyo Centers. The
unified business registration form shall contain all necessary
information for the business application process of MSMEs. The DTI
shall be responsible for regularly updating and maintaining the unified
business registration form.

2. The Negosyo Center of each city or municipality shall facilitate and
expedite the business application process of MSMEs in coordination
with the LGUs and other concerned agencies.

3. Should the concerned business permits and licensing offices fail to
process the application within fifteen (15) days, the MSMEs shall be
deemed registered for a period of one (1) year. In this case, these
offices shall have the authority to revoke the registration within a
period of thirty (30) days upon determination that the MSME has not
met the necessary requirements and qualifications.

4. Thereafter, MSMEs shall renew its registration annually.

(b) Certificate of Authority for Barangay Micro Business Enterprises
(BMBEs)- The Negosyo Center in the city or municipal level shall have
the sole power to issue the certificate of Authority to BMBEs in
accordance with Republic Act No. 9178. Upon the approval of registration
of the BMBE, the Negosyo Center shall issue the Certificate of Authority,
which shall automatically exempt the micro enterprise from the minimum
wage law and from income tax. To defray the administrative costs of
registering and monitoring the micro enterprise, the Negosyo Center may
charge a fee of not more than Five Hundred Pesos (Php 500.00).


(c) Philippine Business Registry- A Philippine business registry system
shall be housed under the Negosyo Center, if available, for use of
MSMEs to expedite registration with concerned licensing offices.

SECTION 6. Start-up Fund for MSMEs- Aside from the existing benefits for
MSMEs the MSMED Council, through DTI, the Department of Finance (DOF) and the
appropriate financing institutions, shall establish a Start-up Fund for MSMEs to be
sourced from the MSME Development Fund and BMBE Fund to provide financing for
the development and promotion of MSMEs in priority sectors of the economy as
specified in the MSMED Plan.

SECTION 7. Composition of the Micro, Small and Medium Enterprise
Development Council (MSMED). - To ensure greater representation by the sectors
involved, the members of the Council shall be the following:

(a) Secretary of Trade and Industry as Chairman;

(b) Secretary of Agriculture;

(c) Secretary of the Environment and Natural Resources;

(d) Secretary of the Interior and Local Government;

(e) Secretary of Science and Technology;

(f) Secretary of Tourism;

(g) Director General of National Economic Development Authority;

(h) Governor of the Bangko Sentral ng Pilipinas;

(i) Chairman of Small Business Corporation;

()) Three (3) representatives from the MSME sector to represent Luzon, Visayas,
and Mindanao with at least one representative from the micro enterprise
sector and at least one representative from the micro enterprise sector and at
least one representative from the youth sector to focus on the promotion of
youth entrepreneurship;

(k) One representative from the labor sector, to be nominated by accredited labor
groups;


(I) A representative from the private banking sector to serve alternately among
the Chamber of Thrift Banks; the Rural Bankers’ Association of the
Philippines (RBAP); and the Bankers’ Association of the Philippines (BA);

(m) A representative of Microfinance Non-Government Organizations (NGO's);

(n) Chairperson of the Senate Committee on Trade, Commerce and
Entrepreneurship; and

(0) Chairperson of the House Committee on Small Business and
Entrepreneurship Development.

The members may elect from among themselves a Vice-chairman to preside
over the Council meetings in the absence of the Chairman.

SECTION 8. Functions of MSMED Council.- The MSMED Council shall have
the following additional functions:

(a) Coordinating and Oversight Body for the Negosyo Center - MSMED
Council, through the DTI, shall act as the coordinating and supervising
body for all the agencies involved in the establishment and operation of
the Negosyo Centers.

(b) Provision of a Compliance Guide- For each rule or group of related
rules issued by any govemment agency for compliance by MSMEs, the
Council shall publish compliance guides entitled ‘Micro, Small and
Medium Enterprises Compliance Guide.’ The Council shall ensure that
the compliance guide shall be written in plain language or in the local
dialect, if necessary,

The Council shall prepare separate compliance guides covering
groups or classes of similarly affected MSMEs and shall cooperate
with industry associations to develop and distribute such compliance
guides. The publication of each compliance guide shall include the
posting of the guide in an easily identified location on the website of
the agency; and distribution of the guide to known industry contacts,
such as small entities, associations, or industry leaders affected by the
rule. The issuing government agencies shall publish and disseminate
the compliance rules within ninety (90) days from the date of issuance

SECTION 9. Information Dissemination.- The Philippine Information Agency,
through the office of Public Information in each city or municipality, in coordination with
DTI, Bangko Sentral ng Pilipinas (BSP), Department of Labor and Employment (DOLE),
and Department of Interior and Local Government (DILG) shall ensure the proper and
adequate information dissemination of the contents and benefits of this Act to the
general public especially to its intended beneficiaries specifically in the barangay level


SECTION 10. Appropriations.- The amount necessary to carry out the initial
implementation of this Act shall be added to the budget of DTI. Thereafter, such sums
as may be necessary for the continued implementation of this Act shall be included in
the succeeding General Appropriations Act

SECTION 11. Implementing Rules and Regulations- The Secretary of DTI, in
consultation with the appropriate agencies as may be deemed necessary, shall
formulate the necessary rules and regulations to implement the provisions of this Act
within ninety (90) days after its approval. The rules and regulations issued pursuant to
this Act shall take effect fifteen (15) days after its publication in a newspaper if general
circulation

SECTON 12. Separability Clause.- If any provision of this Act shall be held
unconstitutional, the remainder of the Act not otherwise affected shall remain in full
force and effect.

SECTION 13. Repealing Clause.- Section 4 of Republic Act No. 9178 is hereby
repealed. Section 7-A and 7-B of Republic Act No. 6977, as amended by Republic Act
No. 8289 and Republic Act No. 9501, are hereby amended. Section 12 of Republic Act
No. 9178 is also hereby amended. All other existing laws, presidential decrees,
executive orders, proclamations or administrative regulations that are inconsistent with
the provisions of this Act are hereby amended, modified or repealed accordingly

SECTION 14. Effectivity.- This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspaper of general circulation

Approved,