Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
||ouSE BIIjLNI).     §§54
Introduced by Hon. lose Manuel F. Alba
EXPI.ANATORY NOTE
The  Philippine  Constitution  mandates  the  promotion  of social  justice  and  self-
reliance alongside creating economic opportunities. It also put emphasis to raise the
quality  of life  for  all,  especially  the  under-privileged.  The  country,  however,  is
continuously faced with poverty. Alongside the private sector, academe, and CSOs,
the Philippine government have been continuously looking for innovative means to
ensure that this constitutional mandate is fulfilled.
Experiences in the past thought us that in order to address this perennial challenge,
it  requires  appropriate  systems,  organization,  stnictures,  and  resources.   It  also
requires new social investment models and capacity building programs to help new
breed entrepreneurs achieve significant positive impact.
There are many social enterprises able  to prove its models  to create wealth while
performing its social mission. As a poverty reduction strategy, it creates social and
economic   value   that   benefits   the   poor   as   its   primary   stakeholders.   These
stakeholders are engaged as partners in the value chain (either as wofkefs, suppliers,
clients, co-developer, co-producer) and in social enterprise governance.


This Bill provides the framework for planning and implementation of a National
Poverty Reduction through Social Entrepreneurship q'RESENT) Program. It also
seeks to provide incentives and benefits to promote the growth of social enterprises,
and to integrate SE into the overall poverty reduction strategy of the government.
The  support and  passage  of this  bill is  also  a means  for the  country  to  further
contribute in the achievement of the national targets in conformance of the 2030
Sustainable Development Goals. In particular, zero hunger, zero poverty, reduced
inequality, decent jobs, and inclusive, sustainablecommunities.
ill±
UEL F. ALBA
istrict, Bukidnon


-.-       5554
1                                                                                                  AN ACT
2                  ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE POVERTY,
3                 ESTABLisHiNG FOR THE puRposE THE povERrv REDucTioN THRouGH SociAL
4            ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROVIDING SUPPORT, BENEFITS AND
5                                                                         APPROPRIATIONS THEREFOR
6                                                                                                 CHAPTER I
7                                                                                   GENERAL PROVISIONS
8
9        SECTloN 1.   Short Title. -This Act shall be known as the "Poverty Reduction through social
10        Entrepreneurship Act."
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12        SECTION 2.   Statement of policy. -As provided in the constitution of the Republic of the
13        Philippines, it is the declared pelicy of the state to promote ajust and dynamic social order that will
14       ensure the prosperity and independence of the nation and free the people from poverty through
15        policies that provide adequate social services, promote full employment, a rising standard of living,
16        and an improved qualityoflifeforall.   InArticle  ll,  Sections 10 and  11,  it isfurtherdeclared thatthe
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State shall provide social justice in all phases of national development and that the State values the
dignity of every human person and guarantees full respect for human rights.
ln Article XII,  Section 1,  it is further stated that the goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding productivity as the
key to raising the quality of life for all, especially the underprivileged.
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25        The state shall promote industrialization and full employment based on sound agricultural
26        development and agrarian reform, through industries that make full and efficient use of human and
27        natural resources, and which are competitive in both domestic and foreign markets. However, the
28        State shall protect Filipino enterprises against unfair foreign competition and trade practices.
29        The state also recognizes the important role of enterprises in the economy as the major agent of
30        development, creating off-farm employment opportunities and providing transitional means for
31         improving people's livelihoods.
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33        Toward this end, the state shall pursue a poverty reduction program that promotes an environment
34        conducive to the development and growth of a vibrant social enterprise sector engaged in poverty
35        reduction, and economic and social development.  It shall empower the marginalized sectors as
36        primary stakeholders in social enterprises, establish mechanisms essential to realizing their potential
37       and achieving their full growth, and extend the assistance necessary for their advancement. The state
38        shall likewise ensure that the provision for technical and financial assistance, incentives and other
39        services are free from any condition that might infringe upon the autonomy or organizational integrity
40        of the social enterprises to enable them to develop into viable and vital anti-poverty agents, and a
41        strong social entrepreneurship movement which will be instrumental in reducing poverty in the
42        country.
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44        The state, through the creation of an enabling policy environment for social enterprises, affirms its
45        commitment to the sustainable Development Goals (SDGs). Social enterprises shall form part of
46        national and local development plans toward accelerating the achievement of the sDGs, especially
47        the targets of zero poverty; no hunger; gender equality; decent work and inclusive economic growth;
48        reducing inequalities; and sustainable production and consumption.
49        The state shall pursue a low carbon development pathway, to which social enterprises engaged in
50        renewable energy, environmental protection, circular economy, and other such activities, can
51        contribute. This is consistent with the commitment of the state to its Nationally Determined
52        Contribution (NDC) under the global paris climate Agreement, which it ratified in 2017.
53       The state affirms the role of women in nation building and ensures the fundamental equality of men
54        and women before the law.  It shall promote empowerment of women and pursue equal opportunities
55       for women and men and ensure equal access to resources and to development results and outcome.


56       Further, as set out in RepublicAct No. 9719, otherwise known as the "Magna carta of women Act of
57        2009," the state shall ensure the full integration ofwomen's concerns in the mainstream of
58        development, shall provide ample opportunities to enhance and develop their skills, acquire
59        productive employment,  and contribute to their families and communities to the fullest of their
60        capabil jties.
61        SECTION. 3.  Definition of Terms. -As used in this Act:
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a.   Socr.a/ Enterpn.se /SE/ shall primarily refer to a social mission-driven organization that creates
wealth while contributing to social wellbeing and ecological sustainability.  It can take the form
of non-stock,  non-profit corporations including NGOs, POs,  Foundations, Associations;
cooperatives; and sole proprietorships, partnerships, and stock corporations.
A social enterprise, for purposes Of this Act, shall also refer to a Social Enterprise with the
Marginalized as Primary Stakeholders (SEMPS). A SEMPS is a social enterprise that
explicitly declares and pursues poverty reduction or improving the quality of life of specific
segments of the marginalized and vulnerable sectors as its principal objective. A SEMPS
engages and invests in the poor to become effective workers, suppliers, clients and/or
owners, and ensures that a substantive part Of the wealth created by the enterprise is
distributed to them.  This includes efforts to help workers in the informal sector transition to be
stakeholders of the formal economy.  In addition to reinvesting its surplus or profits back
toward the fulfillment of its social mission in a sustainable way, a SEMPS also uses its surplus
or profits and mobilizes other resources to assist the poor to become partners in SE or value
chain management/ governance and to become partners in community, sectoral and societal
transformation.
a.   Assets shall refer to all kinds of properties, real or personal, owned by the social entrepreneur
as defined in paragraph (ff) of this Section and used for the conduct of its business: Provided,
that for the purpose of exemption from taxes and to benefit from other incentives under this
Act, this term shall mean all kinds of properties, real or personal, owned and/or used by the
SE for the conduct of its business;
c.     CapabJ.//.fy bu/./d/.ng shall refer to the process of enhancing the viability and sustainability of
SEMPS.  It pertains to 1 ) education, training, coaching and other learning events such as, but
not limited to,   study tours; 2) technical, consultancy and advisory services; 3)  assistance in
organizational systems development; 4) technology incubation, development and
dissemination; 5) value chain and subsector development; 6) conduct of SE trade fairs and
missions; 7) networking and policy advocacy  initiatives, and other such activities that enable
SEs to be effective and efficient vehicles for poverty reduction. The term capability building
precludes the grant of any loan or equity funds to the SE and shall in no way refer to the
provision of equity investments, seed funding, partnership's seed funds, equity participation,
start-up funds or any such activity that connotes the infusion of capital or funds from the
government or from the SE Development Fund created under Section 18 of this Act;
d.   C/.v/./ soci.edy organi.zaf/.ons shall refer to private, voluntary, and non-profit organizations of
citizens that are established to pursue a mission,  usually involving the interest of the public,
marginalized groups or specific sectors of society.  They include non-government
organizations, socio-civic groups, foundations and people's organizations;
e.    Cotjnci./ shall refer to the SE Council;
f.      Coaperaf/.ve shall refer to an autonomous and duly registered association of persons, with a
common bond of interest, who have voluntarily joined together to achieve their social,
economic, and cultural needs and aspirations by making equitable contributions to the capital
required, patronizing their products and services and accepting a fair share of the risks and
benefits of the undertaking in accordance with universally accepted cooperative principles as
defined in R.A. 6938, as amended by R.A. 9520, otherwise known as the "Philippine
Cooperative Code of 2008";
9.   Econom/.c subsectors shall refer to networks of related actors and enterprises performing


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various functions in value chains.  These actors and enterprises transform raw materials into
finished products, or develop services, and distribute or provide them through market
channels to final consumers; they may be identified by key raw material source, by finished
product or final service provided.  An economic subsector may be comprised of several
competing value chains. By understanding the dynamics of economic subsectors and using
them as units of planning social entrepreneurship interventions, government agencies,
support institutions and SEs shall more effectively reach and benefit a greater number Of poor
in poverty reduction programs;
h.   Empowermenf strategy shall refer to a development strategy that enables the marginalized
sectors to own, manage, and control SEs in order for them to reap maximum benefits from it
and which acts as a channel for directly distributing income;
/..      Fa;.r fracJe shall refer to a trading partnership based on dialogue, transparency and respect
and which seeks greater equity in international trade and the transformation and adaptation of
trading structures and practices in favor of the poor and disadvantaged by offering better
trading conditions to, and securing the rights of, marginalized producers and workers;
/..      Fa/.r frade organ/.zaf/.ons shall refer to enterprises certified by internationally-and nationally-
recognized Fair Trade networks;
A.     Fa/.r trade pn.nc/.p/es shall refer to the values adopted by fair trade organizations in their day-
to-day operation.  These include creating opportunities for economically-disadvantaged
producers; transparency and accountability; payment of a fair price; ensuring no child labor
and forced labor; commitment to non-discrimination, gender equity and freedom of
association; ensuring good working conditions; providing capacity building; and, respect for
the environment;
/.      Foundaff.on shall refer to the categorization of a non-profit organization duly registered that
typically either donates funds and support to other organizations or provides the source of
funding for its own charitable purposes.   Unlike a company, foundations have no shareholders
though they may have a board, an assembly and voting members. Afoundation may hold
assets in its own name for the purposes set out in its constitutive documents, and its
administration and operation are carried out in accordance with its statutes or articles of
association rather than fiduciary principles;
in.  GenderAna/ysi.s shall refer to a systematic analytical process based on sex-disaggregated
and gender information. This process is used to identify, understand, and deschbe gender
differences and the relevance of gender roles and power dynamics in a particular context;
n.   Gencfer and Deve/apmenf or GAD shall refer to the development perspective and process
that are participatory and empowering, equitable, sustainable, free from violence, respectful of
human rights, and supportive of self-determination and actualization of human potentials.  It
seeks to achieve gender equality as a fundamental value that should be reflected in
development choices; seeks to transform society's social, economic and political structures
and questions the validity of the gender roles they ascribed to women and men; contends that
women are active agents of development and not just passive recipients of development
assistance; and stresses the need of women to organize themselves and participate in
political processes to strengthen their legal rights;
o.   Gender Mai.nstreami.ng shall refer to the strategy for making women's as well as men's
concerns and experiences an integral dimension of the design, implementation, monitoring,
and evaluation of policies, programs and projects in all social, political, civil, and economic
spheres so that women and men benefit equally.  It is the process of assessing the
implications for women and men of any planned action,  including legislation, policies or
programs in all areas and at all levels;
p.   H)ron.d #nancing shall refer to the combination of grants with loans and other financial
instruments to support the unique nature of SEs as wealth creating organizations that pursue
social missions to improve societal wellbejng -jn ways that are ecologically and financially


sustainable;
a.   /ntermed/.air.on strategy shall refer to a development strategy that provides financial,
agricultural, business development and institutional development services to the
entrepreneurial poor and employers of the poor and provides product development and
marketing support using the principles of fair trade to marginalized producers.  A SE engaged
in intermediation strategy need not be owned by the marginalized stakeholders but provide
immediate access to services among a critical mass of these marginalized stakeholders;
r,     Marg/.na//.zed shall refer to basic sectors and disadvantaged or vulnerable persons or groups
who are mostly living in poverty and have little to no access to: land and other resources;
basic social and economic services, such as health care, education, water and sanitation,
employment and livelihood opportunities, housing, social security, physical infrastructure; and
the justice system.
As defined in RepublicAct (RA) No. 9710, otherwise known as the "Magna Carta of Women
of 2009," these include, but are not limited to, the following sectors, groups, and persons:
(1 )            "Small Farmers and Rural workers" refers to those who are engaged directly or
indirectly in small farms and forest areas, workers in commercial farms and plantations,
whether paid or unpaid, regular or season-bound. These shall include, but are not limited to,
(a) small farmers who own or are still amortizing for lands that is not more than three (3)
hectares, tenants,  leaseholders, and stewards; and (b) rural workers who are either wage
earners, self-employed, unpaid family workers directly and personally engaged in agriculture,
small-scale mining, handicrafts, and other related farm and off-farm activities;
(2)             "Fisherfolk" refers to those directly or indirectly engaged in taking, culturing, or
processing fishery or aquatic resources, These include, but are not to be limited to, women
engaged in fishing in municipal waters, coastal and marine areas, women workers in
commercial fishing and aquaculture, vendors and processors of fish and coastal products,
and subsistence producers such as shellngatherers, managers, and producers Of mangrove
resources, and other related producers;
(3)             "Urban poor" refers to those residing in urban and urbanizable slum or blighted
areas, with or without the benefit of security of abode, where the income of the head of the
family cannot afford in a sustained manner to provide for the family's basic needs of food,
health, education, housing, and other essentials in life;
(4)            "Workers in the Formal Economy" refers to those who are employed by any person
acting directly or indirectly in the interest of an employer in relation to an employee and shall
include the government and all its branches, subdivisions, and instrumentalities, all
government-owned and -controlled corporations and institutions, as well as nonprofit private
institutions or organizations;
(5)            "Workers in the Informal Economy" refers to self-employed, occasionally or
personally hired, subcontracted, paid and unpaid family workers in household incorporated
and unincorporated enterprises, including home workers, micro-entrepreneurs and producers,
and operators of sari-sari stores and all other categories who suffer from violation of workers'
rights;
(6)            "Migrant workers" refers to Filipinos who are to be engaged, are engaged, or have
been engaged in a remunerated activity in a State of which they are not legal residents,
whether dooumented or undocumented;
(7)            " Indigenous peoples" refers to a group of people or homogenous societies identified
by self-ascription and asoription by other, who have continuously lived as organized
community on communally bounded and defined territory, and who have, under claims of
ownership since time immemorial, occupied, possessed customs, tradition, and other


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distinctive cultural traits, or who have, through resistance to political, social, and cultural
inroads Of colonization,  non-indigenous religions and culture,  became historically
differentiated from the majority of Filipinos. They shall likewise include peoples who are
regarded as indigenous on account of their descent from the populations which inhabited the
country, at the time of conquest or colonization, or at the time of inroads of non-indigenous
religions and cultures, or the establishment of present state boundaries, who retain some or
all of their own social, economic, cultural, and political institutions, but who may have been
displaced from their traditional domains or who may have resettled outside their ancestral
domains as defined under Section 3 (h), Chapter 11 of RepublicAct No. 8371, otherwise
known as "The Indigenous Peoples Rights Act of 1997" (lpRA of 1997);
(8)            "Children" refers to those who are below eighteen (18) years of age or over but are
unable to fully take care of themselves or protect themselves from abuse, neglect, cruelty,
exploitation, or discrimination because of a physical or mental disability or condition;
(9)         "Senior citizens" refers to those sixty (60) years of age and above;
(10)          "Persons with Disabilities" refers to those who are suffering from restriction or
different abilities, as a result of a mental, physical, or sensory impairment to perform an
activity in the manner or within the range considered normal for a human being; and
(11)         "Solo parents" refers to those who fall under the category of a solo parent defined
under Republic Act No. 8972, otherwise known as the "Solo Parents Welfare Act of 2000".
Further, as defined in RepublicAct No.11054, otherwise known as the "Bangsamoro Organic
Act of 2018," marginalized groups shall include "Bangsamoro People," to wit:
(12)       "Bangsamoro people" shall refer to those who, at the advent of the spanish
colonization, were considered natives or original inhabitants of Mindanao and the Sulu
archipelago and its adjacent islands, whether of mixed or full blood, shall have the right
identity themselves, their spouses and descendants, as Bangsamoro.
(13) Further, as artioulated in Republic Act. No. 9710, or the Magna Carta of women of 2009,
marginalized groups shall include women in all aforementioned sectors or groups.
s.     M/.crofinance shall refer to the provision of a broad range of financial services such as
deposits, loans, payment services, money transfers and insurance products to the poor and
low-income households and their microenterprises and small businesses, to enable them to
raise their income levels and improve their living standards;
f.      M/.n/.mum bas;'oneeds shall refer to the needs of a Filipino family pertaining to survival (food
and nutrition; health; water and sanitation), security (shelter; peace and order; public safety,
income and livelihood); and enabling services (basic education and literacy, participation in
community development, family and psycho-social care); and inclusion (assistive
device/technology, personal assistance, sign language interpreter, accessibility);
u.   IVon-Goverrmenf Organ/.zaf/.on or IVGO shall refer to a duly registered non-stock,  non-profit
organization focusing on the upliftment of the basic or disadvantaged sectors of society by
providing advocacy, training, community organizing, research, access to resources, and other
similar activities and, as defined under Section 34 (H)(2)(c) of RepublicAct No. 8424, as
amended, otherwise known as the "National lnternal Revenue Code of 1997," organized and
operated exclusively for scientific, research, educational, character-building and youth and
sports development, health, social welfare, cultural or charitable purposes, or a combination
thereof, and no part of the net income of which inures to the benefit of any private individual;
v.    Peop/e's Organi.zafi.on or PO shall refer to a self-help group belonging to the basic sectors
and/or disadvantaged groups composed of members having a common bond of interest who
voluntarily join together to achieve a lawiul common social or economic end;


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w.  Persons w/-fA D/.sabi./i'fy or PWD shall refer to individuals with restriction or different abilities, as
a result of a mental, physical or sensory impairment, to perform an activity in the manner or
within the range considered normal for a human being;
x.     Poorshall refer to individuals and families whose income fall below the poverty threshold as
defined by the National Economic and Development Authority and/or are deprived of the
means to provide in a sustained manner their minimum basic needs of food, health,
education, housing and other essential amenities of life, as defined under R.A. 8425; it may
also be the state of deprivation -such as poor health, lack of education, inadequate living
standard, lack of income (as one of several factors considered), disempowerment, poor
quality of work and threat from violence.
y.    Poverty neddct/.on/a//ew'a£7.on shall refer to overcoming the income, resource, and capability
deprivation among the poor as defined in the preceding paragraph and the marginalized
sectors as defined in paragraph (r) hereof;
z.     Pn.vale Enterprise shall refer to an organization engaged in a business activity organized for
the purpose of accumulating profit and whose primary stakeholders and beneficiaries are its
owners;
aa.  Procun.ng Enfrty shall refer to any branch, department, office, agency, or instrumentality of the
government,  including state universities and colleges, government-owned and/or - controlled
corporations, government financial institutions, and local government units procuring Goods,
Consulting Services and Infrastructure Projects;
bb.  Resou/ce mobi./i.zaf7.on strategy shall refer to a development strategy intended to generate
income from the sale of products and services of a SE in order to finance or subsidize the
operations of its core development program or development interventions among the
marginalized sectors;
cc.   SEGFP shall refer to the SE Guarantee Fund Pool created under this Act;
dd.  Socfa/ devie/apmenf shall refer to the continuing process of addressing the needs of society,
beginning with the people's minimum basic needs, through a systematic implementation of
socioeconomic programs or packages;
ee.  Soc/.a/ Enferpn.se Resource /nsfr.fur/.on shall refer to an organization that provides financial
and/or other forms of assistance to social enterprises for them to become viable and
sustainable including but not limited to trainings, education and other capacity-building
measures, research and development, advocacy and other support activities;
ff.   Soc/.a/ entrepreneur shall refer to an innovative individual or institution that promotes the
creation and operationalization of enterprises or livelihood endeavors for those in need or
which address social problems and improve societal wellbeing;
gg.  Soc/.a/ enfrepreneursh/.p entails innovations designed to explicitly improve societal wellbeing,
housed within entrepreneurial organizations, which initiate, guide or contribute to change in
society;
M.  Socv.a/ /nc/usi.on sfrafegy shall refer to the development strategy that assists marginalized
groups of people in society who, for reasons of poverty, geographical inaccessibility, culture,
language, age, sex, gender, migrant status, disability or other disadvantage, have not
benefited from health, education, employment and other opportunities, and who are relegated
to the sidelines of political persuasion, social negotiation, and economic bargaining in order to
restore their dignity by not only removing the barriers that limit their access to the delivery of
basic social services and employment, but more importantly, by nurturing work and other
environments that create avenues for their participation as productive members of society;
/./..     Soci.a/ /nvestors shall refer to individuals or institutions that choose to put in money to a
business endeavor or activity not principally for financial profit but to fulfill a social mission


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which may include poverty reduction, concern for environmental protection, strong
organizational governance, and a desire for a more economically just world;
giv..     Soc/.a/ reform shall refer to the continuing process of addressing the basic inequities in society
through a systematic, unified and coordinated delivery of socioeconomic programs or
packages;
AA.   Soc/.a/ va/ue shall refer to the additional benefit to society of procuring a good or service, over
and above the direct benefit and value of the good or service to the procuring entity,
Additional benefits may include support for poor communities or marginalized groups,
advancement of human rights and social justice, protection of the environment, and
community development.
//.     7tansactona/ sem.cos shall refer to enterprise related assistance to the poor that involve an
exchange of goods or services for money including being workers, suppliers, or clients;
mm.               7Tansformaf7.ona/ servr.cos shall refer to the assistance to the poor as conscious
agents of change to lift their own selves from poverty and to participate in group efforts to
improve the quality Of life of their community, sector or society as a whole. This shall include
building the leadership and management capacity and role of the poor in social enterprises;
nn.   Va/t/e cha/-n shall refer to value-adding economic activities that an enterprise is interlinked
with in the process of producing goods and/or services to serve its chosen market. A value
chain typically consists Of:  1 ) inbound distribution or logistics, 2) manufacturing operations, 3)
outbound distribution or logistics, 4) marketing and selling, and 5) after-sales service. These
activities are supported by 6) purchasing or procurement, 7) research and development, 8)
human resource development, and 9) organizational development. A SE that understands and
manages its value chain improves its capability to create economic, environmental and social
values toward improving the position and benefits of the poor in the value chain and toward
ensuring the viability and sustainability of the enterprise,
oo.  Vu/nerab/e sectors shall refer to groups who are at-risk of any potential event, loss or danger.
CHAPTER 11
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE
SECTION 4. Social Enterprise (SE); General Concept and Coverage -A Social Enterprise (SE),
ip_r_pappses Of thiis Act, refers to a Social Enterprise with the Marginalized as Primary Stakeholde;s
(SEMPS) as defined in Sec. 3 (a) of this Act.
376
377        An sE employs any of the following development strategies in the pursuit of its social mission:  1)
378        empowerment strategy; 2) social inclusion strategy; 3) intermediation strategy; and 4) resource
379        mobilization strategy.
380        ln the case of social enterprises organized as stock corporations, partnerships, or sole
381        proprietorships, these social enterprises should invest at least 60% of their net revenues to sustain
382        the fulfillment of their social mission and provide transformational services for the wellbeing of the
383        marginalized sector they serve. They must not be a branch, subsidiary or division of a private
384        business enterprise, regardless of the size of such private business enterprise, nor may its policies be
385        determined by a private business enterprise. Prow/.ded, that this shall not preclude an sE from
386        accepting subcontracts from large private business enterprises or firms or from joining in cooperative
387        orjojnt-venture activities with other sEs or foundations.
388        SECTION 5. Qualifications for Benefits and Incentives. -To qualify for the benefits and incentives
389        providedforinthisAct, thesE shall:
390                a.   Provide or facilitate the provision of a combination of transactional and/or transformational
391                       services to improve the position and benefits derived by the poor from the sE and the value


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chain or economic subsector where the SE is located, including becoming workerowners,
supplier-owners, supervisors and managers, active members and leaders in governing bodies
of the SE or its allied organizations;
b`   Invest a substantive part of its surplus, profits or mobilize other resources to assist the poor to
become partners in SE or value chain management/governance and/or to become partners in
community, sectoral and societal transformation;
c.     Pursue a pro-active contribution to resolving social and environmental problems and generate
profit or surplus with due regard to social and environmental costs;
d.   Be engaged in an economic activity within the sectors of agriculture and fisheries,  industry
and services which, for purposes of this Act,  shall refer to an activity in any of the economic
subsectors;
e.   Distribute a substantive part Of the wealth created by the enterprise  to the poor in the form of
services, dividends and other forms Of benefits, and payments and incentives for products or
services rendered consistent with the principles of fair trade; and
f.      Be duly registered with the appropriate agencies as provided under RepublicAct No.11232,
or the "Revised Corporation Code Of 2018;" RepublicAct No. 9520, or the "Revised the
Cooperative Code of the Philippines of 2009;" RepublicAct No. 9501, or the "Magna Carta for
Mioro,  Small and Medium Enterprises Of 2008;"  RepublicAct No. 9178,  or the Barangay Micro
Business Enterprises Act Of 2002;" Republic Act No.  1 ce93, or the "Microfinance NGOs' Act of
2015;" and other relevant laws.
412
413        Social enterprise resource institutions may also avail of support from government as partners for
414        building the capability and sustainability as well as developing an enabling environment for social
415        enterprises to flourish, provided they have:
416                a.   a registration as a legal entity in the philippines
417               b.   a dedicated program supporting social enterprises
418               c.    a track record of at least three (3) years of implementation of a dedicated sE program
419                d.    at least three (3) qualified social enterprises vouching for their them.
420
421        International social enterprise resource institutions and their subsidiaries operating in the philippines
422        must partner with a qualified local social enterprise resource institution to avail of government support.
423        Financial sustainability shall not be a prerequisite for the availment of incentives and benefits under
424        this Act.  Provided that, social enterprises that have not achieved financial sustainability may be
425        eligible to avail of the services, assistance and incentives set forth in this Act by presenting a
426        workable strategy to achieve financial sustainability over a reasonable period.
427       SECTION 6, Formulation of a poverty Reduction through social Entrepreneurship (PRESENT)
428       Program. -To promote the development ofa sE sectorwith the marginalized sectors as primary
429        stakeholders, a comprehensive and fully-integrated poverty Reduction Through social
430        Entrepreneurship (PRESENT) Program shall be formulated,  guided by the following principles:
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a.   Incorporating the PRESENT Program in the government's poverty reduction drive as a major
sustainable and comprehensive strategy;
b.   Rationalizing poverty reduction programs by streamlining and coordinating the various anti-
poverty programs of the government to reduce inefficiency and duplication and to improve the
effectiveness of each program;
c.     Ensuring people's participation, access to information, and empowerment by mobilizing civil
society organizations and social movement groups working with the poor;
d.   Promoting sustainable programs that reduce inequality in incomes across economic sectors
and inorease self-reliance among the poor;
e.   Enabling SEs to overcome constraints and to take advantage of opportunities for enhancing
the position and benefits of the pcor in economic subsectors and value chains;
f.      Recognizing women and men as equal partners in development and nation building and
ensuring women's and men's equal rights and access to SE's resources, gender shall be
mainstreamed in the program formulation; and
9.   Developing sustainable mechanisms for the provision Of quality and accessible social
services to the poor.
448        The planning framework of the PRESENT program and its planning process shall ensure that the
449        marginalized sectors are engaged as primary stakeholders.  It shall add value and complement


450       ecosystem-based, areabased, community-based, etc.  tcols and processes in local economic
451        development by promoting and utilizing the economic subsector as a strategic unit of analysis and
452        planning sE development interventions.
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The PRESENT Program shall identify and develop key SEMPS and resource institutions as partners
in strategic economic subsectors that have the potential for growth and where large numbers of the
poor are concentrated.  SEMPs shall be developed as vehicles to ensure that the marginalized
sectors benefit the most from sustainable subsector development.
PRESENT medium-term and annual development plans shall be formulated in synchrony with the
medium-term development plan of the national government.
SECTION 7. LeadAgency. -The Department of Trade and Industry (DTl) shall serve as the central
planning, coordinating,  implementing and monitoring body of the program.
In the implementation of this Act, the DTl shall perform the following functions:
a.     Work in close coordination with the Department of Social Welfare and Development (DWSD)
and the Department of Agriculture (DA) in targeting the different sectors intended to be
benefitted by the program;
b.     Disseminate the information relating to the program;
c.     Assist the Social Enterprise Development Council in calling upon the Departments and
Agencies in fulfilling the objectives of this Act;
d.     Recommend to the SEDC measures and policies for the responsive delivery of the
commitments under this Act;
e.    Provide seminar-workshops and training programs to educate the target sectors about the
conditions and other actions pertinent to this Act;
f.     Perform such other functions as may be necessary or incidental to the proper implementation
of this Act.
479       SECTION 8.  Soci.a/ EnfeapH.se Deye/apment counc;/. -To carry out the policy declared under this
480       Act, a social Enterprise Development council (SEDC), hereinafte"eferred to as the council, is
481        hereby created as an agency attached to the Department of Trade and Industry (DTI).  It shall be the
482        primary agency tasked to carry out the promotion, growth and development of sEMPs in the country.
Given the complexities of a social enterprise and its constituents, the Council shall be composed of
the following:
a.    Secretary of Trade and Industry, as chairperson
b.    Secretary of Agriculture, as co-chairperson
c.     Secretary of social welfare and Development, as vice chairperson
d.    SE sector head representative, as co-vice chairperson
e.
f.
9.
h.
Lead Convener of the National Anti-Poverty Commission
Director-General of the National Economic Planning and Development Agency
Vice Chair for Basic Sectors of the National Anti-Poverty Commission
Secretary of the Interior and Local Government
i.      Secretary of Finance
J.
k
Governor of the Bangko Sentral ng Pilipinas
Secretary of Environment and Natural Resources
I.      Secretary of Agrarian Reform
in.   Secretary of science and Technology
n.    Secretary of Labor and Employment
o.     Seoretary of Education
p.    Secretary of Transportation
q.     Secretary of Information and communications Technology
r.     Chairperson of the commission on Higher Education
s.     Chairperson of the cooperative Development Authority
t.     Chairperson of the securities and Exchange commission
u.    Chairperson of the philippine commission on women
v.     Director-General of the Technical Education and skills Development Authority


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w.   Nine (9) representatives from SEMPS, with three (3) representatives each from the main
island groupings of Luzon, Visayas, and Mindanao, where at least one of the three
representatives from each island grouping shall be a woman,
511       SECTION 9. Powers andFuncli.ons. -The council shall have the following powers and functions:
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a.     Formulate policies and plans to develop and promote, coordinate, synergize, integrate, and
ensure compatibility and complementation of policies and programs for SEs as we// as other
anti~poveriy reduction initiatives consistent with national development objectives.
b.    Formulate policies and plans to ensure the resilience and preparedness of social enterprises
for disaster risk reduction and management as well as develop capacities of social
enterprises to respond, recover and build back better in the face disasters and pandemics.
c.     Issue certificate of qualification upon determination that the criteria set for this purpose have
been fully satisfied: Pnovf.bed, That the certificate of qualification shall be valid only for such
period as may be preschbed under the implementing rules and regulations of this Act;
d.    Oversee the successful implementation of the PRESENT Program and other SE programs;
e.     Identify and access sources of financing to expand the sE sector:
f.     Monitor and evaluate the performance of programs and projects for appropriate incentives;
9.     Call upon any government agency to carry out and implement programs and projects
identified by the Council and to assist in clarifying issues and finding resolution to problems
that concern their respective offices with respect to the implementation of the PRESENT
Program enunciated under this Act or any development program for SEs.
h.    Call upon people's organizations, noni]ovemment organizations. the academe and other
sectors to provide advice on matters pertaining to SEs and conduct of transactional and
transformational services to farmers, producers, workers, consumers and other stakeholders;
i.      Submit annual and other periodic reports to the president and the congress of the philippines
through the Congressional Oversight Committee;
j.      Promulgate such rules and regulations and exercise such other powers and functions as may
be necessary to carry out the purposes of this Act,  including guidelines for the administration
of grant windows provided for in Section 24;
k.     Propose the concomitant plantilla positions and structure for the personnel under it;
I.      Manage the funds provided for by this law, including ensuring the funds' growth where
possible;
in.  Put in place mechanisms for accountability to marginalized stakeholders being served
n.    Align and synchronize the provision of support programs, benefits and incentives for SEs
provided for in this Act;  and
o.    Perform such other functions as may be necessary for its effective operations and the
continued enhancement, growth and development of the SE sector.
544
545       SECTION 10.  Des/.gnafr-on ofper7r)anenf Rapresenfafives fo fAe counc//. Within 30 days from the
546        effectivity of this Act, CabinetTanked exoffic7.o members of the council shall designate a permanent
547        representative to the council, to attend the meetings of the council in cases that the cabinet-ranked
548        ex off/.a/.o members cannot personally attend such meetings. The designated permanent
549        representative of any of the cabinet-ranked members of the council must hold a position not lower
550        than a bureau director.
551
552       SECTION 11.  Ten andrAppoi.ntmenfofsEsecforRapresenfal7.yes. Within 90 days, DTl as chair
553        shall convene members of the council from the philippine Government, as identified in section 10,
554        who shall in turn, confirm representatives of social enterprises and social enterprise resource
555        institutions. Said sE and sE Resource Institution representatives must have been screened and pre-
556        selected by the sE sector convened by DTl, DA, and DSWD, in consultation with established social
557       enterprises and networks ofsEs.
558
559        The islands of Luzon, Visayas, and Mindanao shall each have two (2) representatives who will be
560        appointed for a term of three (3) years. While another three (3) representatives each representing
561        Luzon, Visayas, and Mindanao shall be appointed for a term of two (2) years to ensure continuity.
562        Upon the expiration of all the terms of these first set of officers, all terms of sE sector
563        Representatives shall be for three (3) years. No person shall be appointed to serve as an sE
564        representative in the sEDc for more than a period of two (2) terms or more than six (6) years.


565
566       Any vacancy in the sEDc arising from the death,  incapacity, resignation, ortermination of the term of
567        an appointed sE representative shall be filled up within 90 days from the occurrence of the said
568        vacancy. All nominations to the vacancy shall be submitted within 60 days from the occurrence of
569        such. This process should be consistent with the previous appointment process.  In the case of a
570       vacancy arising from death, incapacity or resignation, the representative appointed to the vacancy
571        shall serve only for the remaining period of the term forthe vacated office.
572
573        SECTION 12.     SecrefaH.af. -There is hereby created a secretariat headed by an Executive Director
574        and two (2) Deputy Directors, and supported by staff, whose composition shall be determined by the
575        SEDC, to serve as the national, technical and administrative secretariat of the council with the
576        member agencies providing additional support staff when the need arises. The secretariat shall
577        perform the following functions:
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a.     Provide administrative support to the council, with the assistance of the National Economic
and Development Authority secretariat in the formulation of the PRESENT development
programs and plans;
b.    Assist the Council in the implementation of the PRESENT development program and the
annual and medium-term development plan;
c.     Assist the council in the performance of its acoreditation and screening function;
d.    Assist the Council in monitoring the PRESENT development programs and the activities of
the various concerned government agencies with respect to SEs;
e.     Prepare, collate and integrate all necessary inputs to the Council's yearly report on the status
of SEs in the country;
f.     Submit periodic reports to the council on the progress and accomplishment of its work
programs; and
9.     Perform other functions that may be assigned and authorized by the council.
591
592        SECTloN 13.   Office. -The council shall have its principal place of business within the DTl's
593        premises or it may establish an office in Metro Manila.  It may also establish such branches within the
594        Philippines as may be deemed necessary by the president of the philippines to carry out the powers
595        and functions of the council.
596
597       SECTION 14.  Waf/.ona/ Cenfer forsoci.a/EntexpH.se Deye/apment. -There shall be established a
598        National center for social Enterprise Development (NCSED) under the council which shall perform
599        thefollowingfunctions:
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a.     Provide sEMPs with capability-training and education through the social Enterprise capability
Building and Sustainability Program created under Section 17 of this Act.
b.     Develop and enhance a research and development system which shall equip every SE with
innovative and sustainable approaches that ensures improvement in the access to basic 604
social services by the poor pursuant to Section 18 of this Act;
c. Manage a  Social  Enterprise  Marketing Assistance  Program  (SMAP) that will  ensure the
generation of the highest possible income for the SEs pursuant to Section 19 of this Act.
d.  Implement capability building projects approved by the Council;
e.     Supervise capability-building projects approved by the council implemented through
reputable Social Enterprise Resource Institutions contracted for the purpose; and
f.     Research on existing policies and programs of other countries for benchmarking purposes
(e.g. support system, ecosystem, programs, regulations).
The NCSED shall be headed by the Executive Director of the Council Secretariat.  It shall maintain a
multi-sectoral, multi~disciplinary pool of experts including those from the academe,  practicing
professionals, business and industry, youth, women and other concerned sectors, who shall be
screened according to the qualifications set by the Council.
618        The NCSED shall coordinate with the university of the philippines Institute for small scale Industries
619        (UP ISSI), the Technical Education and skills Development Authority (TESDA), the Department of
620       Transportation (DOTr),  Department of Information and communications Technology (DICT), the
621        Philippine commission on women (PCW), civil society organizations,  including women's
622        organizations, and other relevant agencies, state universities and colleges in implementing its
623        programs.


624
625    SECTION  15.     Persome/. -Subject to the civil  service laws,  rules and regulations,  the Council is
626 authorized to select,  appoint,  employ and fix the compensation  of the officers and employees of the
627 Secretariat and the NCSED as shall be necessary to carry out its functions.
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SECTION 16.     Ro/e ofLGus /.n SE Deye/opmenf. -LGUs shall be enjoined to incorporate viable
SE Development plans jn their local development planning and to collaborate with SEMPs. The
Gender and Development (GAD) Fund of LGUs may be used toward the design and implementation
of SE development plans at the local level.
Grants from government agencies, such as the Department of Interior and Local Government (DILG),
for civil society toward local development may also be used to support social enterprises.
SECTION 17.     Soci.a/ EnlreprenetirsAi.p Edqcafi.on i.n scAoo/s. -Toward strategically developing
the nation's human resource capability in social entrepreneurship, the Department of Education
(DepEd) and the Commission on Higher Education (CHED) shall cause the integration of SE content
and inclusion of SE courses in the curricula at all levels, especially in the secondary and tertiary
levels. This shall be part of the SE Capability and Sustainability Program stated in this Act.
A continuing social enterprise education program for out-of-school youth and adults shall likewise be
developed and undertaken. The social entrepreneurship education program for primary and
secondary education shall include information regarding:
a.   Social issues and civic ways of addressing them;
b.   The producer as a steward of natural resources;
c.     The consumer as a responsible member of society and their responsibility to develop critical
awareness which is the responsibility to be alert and questioning about environmental and 651
social impacts of the goods and services they use;
d.   Social concern which is the responsibility to be aware of the impact of their consumption to
society, especially to the disadvantaged;
e`  Environmental awareness which is the responsibility to understand the consequences of their
use of natural resources, consumption,  recognizing their individual and social responsibility to
conserve natural resources for future generations; and
f.      Genderjustice, orthe full equality and equity between men and women in all spheres of life,
resulting in women jointly, and on an equal basis with men, defining and shaping the policies,
structures, and decisions that affect their lives and society as a whole.
All higher learning institutions and vocational schools are mandated to include a subject on social
entrepreneurship in their social studies program or in their business, commerce, or economics
courses.
CHAPTER 111
DEVELOPMENT OF SOCIAL ENTERPRISES
SECTIO" 18. SE Capability Building and Sustainability Program; Creation of SE Development
Fwhdr. -  There is hereby established a SE Capability Building and Sustainability Program whose
primary objective is to guarantee the viability and sustainability of SEMPS through activities that
advance, in general, both transformational services and transactional services.  This program shall
include training in social entrepreneurship development institutional strengthening, human resource
competency and skills training, business planning and advisory services, upgrading of accounting and
auditing systems, technical assistance for the installation or improvement of management information
systems, technology intervention, technology incubation/commercialization, market studies, and
product development competitiveness, business matching activities, trade fairs and missions, policy
advocacy, gender and development, resiliency, and other related activities.


679    The SE  Capability Building and Sustainability Program shall  likewise include the establishment of an
680   insurance system for SEs affected  by natural  calamities in  line with the  National  Framework Strategy
681 on  Climate  Change 2010-2022 as  provided for under Republic Act  No.  9729,  otherwise  known  as the
682 "Climate Change Act Of 2009," and Republic Act No.10121,  otherwise known as the "Philippine
683      Disaster Risk Reduction and Management Act of 2009."
684
685        For this purpose, there is hereby created and established an sE Development Fund (SEDF) in the
686        initial amount of Three Billion pesos (P3,000,000,000.00) to be administered bythe council
687       chargeable against the General Appropriations Act following the year of the effectivity of this Act. The
688        SEDF shall likewise be funded with one percent (1%) of the following: 2) collected taxes pursuant to
689        the implementation of RepublicAct No.10351,  otherwise known as the "SIN TaxAct of2012;" 3)
690        earnings derived by the Tourism Infrastructure and Enterprise zone Authority (TIEZA) from its
691   collections;  and  4)  equity  contributions  of participating  government financial  institutions.  Voluntary
692  contributions,  grants,  gifts from  both  local  and foreign sources as  may be accepted by the Council
693 shall also form part of the SEDF.
694
695        The social Enterprise Development Fund may also come from programs or projects implemented by
696        national government agencies funded by development assistance from bilateral or multilateral
697       development partners.
698
699       Additional funding and appropriation shall be provided by the office of the president as the needs
700        arise during calamities, pandemics and other extra-ordinary circumstances, subject to audit by the
701        Commission on Audit.  Social enterprise resource institutions may receive funds for social enterprise
702        programs.
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In addition to the SEDF, the 5% allocation for Gender and Development (GAD) programs of
government agenCi.es and local government units as prescribed in Republic Act.  No. 9710, otherwise
known as the "Magna Carta of Women Act of 2009," may be accessed by social enterprises which are
women-led or contribute to women's economic empowerment. The allocation can help build the
capacity of such enterprises, including further organizing women-led cooperatives and groups to
improve women's economic participation.
The SEDF shall be used for the purposes provided herein. Any undisbursed funds from the preceding
year shall form part of the disbursable portion of the SEDF in the following year.
Also to this end, there is hereby created a Social Enterprise Guarantee Fund Pool (SEGFP) which
shall be comprised Of the five percent (5%) of the preceding year budget surplus of the government-
owned and controlled corporations and government financial institutions as contribution to the SEGFP
in accordance with relevant laws, charters and by-laws,  in addition to voluntary contributions, grants
and gifts from both local and foreign sources as may be accepted by the Council.
The SEGFP shall be administered by the Council and shall be used to mitigate the risks involved in
SE sector lending, facilitating the provision of oredit therefor.  The fund shall be placed in trust with the
Land Bank of the Philippines for the purpose of providing guarantee cover to participating financial
institutions and other parties in extending financing to SEs: Provided, that the fund may also be used
to cover the performance bond of SEs in government procurement,
The Council,  in coordination with the Land Bank of the Philippines,  shall draw up the mechanics and
administrative arrangements and issue the implementing guidelines for the fund pool.
729 SECTION  19.  Cash /ncenfi.res fo/ Persons w/-th D/.sab/.//-f7.es /PWD/.  -To level the playing field and
730 recognize the  circumstances  of start-up SEs  primarily employing  PWDs,  the  SEDF  created  in  Section
73118 of this Act shall provide a cash incentive for every PWD,  in accordance with RepublicAct No.
732      7277, otherwise known as the "Magna carta for Disabled personsAct of 1992," and other
733  marginalized sectors as may be provided  by this  law,  representing at least twenty five percent (25%)
734  of the daily minimum wage,  until  such time that the said SE  is able to achieve financial sustainability.
735


736       SECTION 20. Social Enterprise Recovery and Rehabilitation Fund. -To prepare for or respond to
737        climate risks and impacts, disaster vulnerabilities and hazards, humanitarian emergencies (including
738        those arising from armed conflict), epidemics, financial crises or economic shocks, and other such
739        events, a social Enterprise Resilience Fund is hereby established to build the resilience of social
740  enterprises.  This  shall  include  stimulus  grants,  climate  adaptation  initiatives,  risk  insurance,  and  other
741  such facilities and  products to improve the ability Of SEs to withstand  shocks and  stresses.  The  Fund
742 shall be lodged with the Department of Trade and Industry and shall be managed by the SEDC.
743  SECTION  21 `  Soci.a/ Enfeaprl.se Research and Dove/opmenf System.  -The  Council,  in coordination
744  with the  Department of Science and Technology (DOST),  NEDA,  DTI,  and other appropriate agencies
745 and research institutions, shall develop and enhance a research and development system that:
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a) Provides studies on opportunities for poverty reduction and SE development in key economic
subsectors and other inputs for the Council to undertake strategic planning for its PRESENT
Program;
b)   Equip SEs and support institutions with technologies that are appropriate for enhancing the
participation and benefits of the poor jn various economic subsectors; and,
c)   Equip SEs and support institutions with innovative and sustainable approaches to improve
access of the poor to quality basic social services.
This system must be based on gender analysis, or, as defined in this bill, the systematic analytical
process based on sex-disaggregated and gender information.
SECTl9N..22. . Social Enterprise Marketing Infrastructure Development. -The Coundil shall
promote the development and expansion of local and foreign markets for the products and services of
SEMPs, guided by the principles of fair trade.   Consistent with this, the Council shall:
a) Establish a SE Marketing Assistance Program (SMAP) that will assist SEMPs match supply
with demand in both domestic and foreign markets,  as well as promote SE products and
services through tri-media, trade fairs and trade missions;
b)   Develop,  install and sustain a SE market information system (SMIN) with the assistance Of
the DTl and DICT which shall be called the SE Marketing Information Network (SMIN).
The SMIN shall be set up from the level of the municipal and provincial LGUs, the regional and up to
the Council level within one (1 ) year from the approval of this Act, taking into account existing
information networks such as the internet and using a dedicated website for the purpose, to ensure
linkage of the SEs with the government and its various departments, agencies, bureaus and
instrumentalities, the local and domestic markets, as well as research institutions.  The Council shall
provide technical assistance in setting up the SMIN at the local and regional levels.
774        All government departments, agencies, bureaus, research institutions, as well as the LGUs shall
775        consolidate and continuously update all relevant information and data that would be of use to sEs on
776        a periodic basis and make such data available on a dedicated website on the internet.  Data shall be
777       gender-disaggregated as far as possible. Compliance with the relevant laws, rules, and regulations
778        concerning data privacy shall be ensured.
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The SMIN shall provide information and marketing services related to products of SEMPS which shall
include the following:
a.     Supplydata;
b.     Demanddata;
c.     Priceand pricetrends;
d.     Product standards;
e.     Directory of, but not limited to SEs, traders, key market centers, processors and
business institutions both at the national and local levels;
f.      Information and technology generated from research institutions;
9.     International, regional and local market forecasts; and
h.    Resource accounting data.
CHAPTER IV


794
FINANCING AND BENEFITS
795
796        SECTION 23. Hybrid Fi.nanci-ng. -Social Enterprises shall be supported through hybrid financing to
797        enable them to provide a combination of transactional and transformational services to the
798        marginalized sectors, groups or persons they serve. Given the unique nature of sEs as wealth-
799        creating organizations that pursue their social mission to improve societal wellbeing in ways that are
800        ecologically and financially sustainable, they need to be supported through hybrid financing that
801        entails a combination of grants with loans and other financial instruments.
802
803       SECTION 24.     Speci.a/ C/edi.I Mndows w7.th nor-co«afera/fzed /oans. -ln addition to the special
804        credit windows provided for the promotion of microfinance as provided under section 16 of Republic
805        Act No. 8425, the Land Bank of the philippines,  Development Bank of the philippines,  Philippine
806       Postal Bank, andAI Amanah Bank, and other public or government-owned banks are hereby
807       mandated to set aside at least ten percent (10%) of their total loan portfolio based on their balance
808       sheet in the end of the preceding quarter over a period offive (5) years and open a special credit
809        windowforqualified sEs.
810
811        For a period of eight (8) years from the date of the effectivity of this Act, all other lending institutions
812       as defined under the central Bank Act or the General Banking Act, as amended, shall likewise set
813        aside at least ten percent (10%) oftheirtotal loan portfolio that will not require a collateral based on
814       their balance sheet as of the end of the previous quarter and make the same available for sEs
815        through a special credit window. The BSP,  in consultation with the council, shall formulate the rules
816       for the effective implementation of this provision:  Provided, That the purchase of government notes,
817       securities and other negotiable instruments shall not be deemed compliance with the foregoing
818        provision.
819
820        The council shall establish a system to monitor all loan applications of sEs in order to account for the
821        absorptive capacity of the sE sector.
822
823        The BSp shall require lending institutions covered by thisAct to furnish the council on a quarterly
824        basis a regular report on their respective compliance with the above provisions on the mandatory
825       credit allocations for sEs and shall act immediately on the council's reports of non€ompliance
826        therewith.
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The special credit window for SEMPS shall bear interest lower than the market rate and shall have
longer terms of payment and waiver of applicable fees.
SECTION 25.  Spec/.a/ Credff mndow Pu/poses. -The special credit window provided under
Section 24 of this Act shall be intended for the following purposes:
a.     Credit line for business development loan or working capital loan to cover the operational and
management expenses of a start-up or existing business or income generating project,
including receivable financing or purchase of additional  inventory,  soft or intangible
investments such as trade fair participation or acquisition of software or franchise
development packages;
b.  Fixed assets financing to cover acquisition of fixed assets like machineries and equipment,
motor vehicle, or acquisition of lot for project site or construction of a plant and building and
the improvement thereof;
c.     Value chain financing to cover any of the value chain activities such as production, processing
and marketing;
d.     Domestic letter of credit or trust receipt to provide a stand-by credit facility for the SE borrower
for the purchase Of product inputs, equipment, machinery, implements, and spare parts,
whereby payment of which is guaranteed and to be made to the seller by the lending
institution, provided all documents conform with the terms and conditions of the credit; and847
e.     Revolving Credit Line for re-lending to finance the livelihood project requirements of end-
borrowers.
f.     A special Credit line (X% of total loan porfrolio) for women-led sEs or sEs that support women
(ie„ 50%), particularly those in the agricultural and informal sectors, Women shall have no
barriers to economic participation as provided for in RepublicAct No. 7192, otherwise known
as the "Women in Development and Nation Building Act of 1992."


854       SECTION 26. Grant faci./fly. The sE Development Fund in section 18 shall provide grants to
855        qualified social enterprises and resource institutions for the performance and conduct of their mission
856       toward poverty reduction, sustainable development, promotion of gender and social justice,
857        environmental conservation, climate action, and improvement in economic welfare of the poor and
858        marginalized sectors.
859
860
861
862
863
864
865
866
867
868
869
870
871
872
There will be three windows under this fund facility, namely: capacity-building grant; start up
enterprise grant; and ecosystem-building grant. The SE Council shall formulate the guidelines for the
management and implementation of grant assistance.
SECTION 28.  ran Credfts.  -SEDC will develop a system of valuation of social, economic and
ecological contributions of social enterprises and the social impact on the marginalized sectors they
serve, as bases for tax credits from the government,
SECTION  29.   Pro/erenf/a/ Ri.gAts. -Without prejudice to preferential rights already available to
specific enterprises or organizations under other laws, qualified SEMPs shall be accorded a
preferential right in the procurement process and in the implementation Of procurement contracts by
the government in all its branches, departments, agencies, subdivisions, and instrumentalities,
including in the government-owned and controlled corporations and local government units`
873
874        Such a preferential right is anchored notjust in economic efficiency but in social values which provide
875        long-term benefits to society. As defined in this bill,  social value refers to the additional benefit to
876 society of procuring a good or service,  over and above the direct benefit and value of the good or
877 service to the procuring entity.
878  These  social  values  include,  ;.nfer a/i.a,  poverty  reduction,  sustainable  development,  environmental
879  conservation,  climate action,  community development,  and  gender and  social justice.  As  such,  the
880 determination of government procurement shall factor in social values.
881
882       Such a preferential right, however, shall not be prejudicial to the interests of the government and the
883       public.
884
885        SEMPs shall be given priority and preference in the following proourement processes:
886                a.     Direct contracting as provided under section 50 of Republic Act No. (RA) 9184, otherwise
887
888
889
890                 b.
891
892
893
894
895
896                 c.
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known as the "Government Procurement Reform Act of 2002," may be resorted to if the
contracting party selling the goods and services required by the procuring entity is a social
enterprise as qualified by the Council.
Shopping as provided under Section 52, paragraph (a) of RA 9184 may be resorted to when
there is an unforeseen contingency requiring immediate purchase: Provf'ded, That the
procurement of the goods and services shall be first obtained from the social enterprise within
the area of operation of the proouring entity which is duly qualified by the Council as having
the capacity to supply the required goods and services: Prow.ded, furfber, That the amount
shall not exceed Five hundred thousand pesos (P500,000.00).
Shopping as provided in Section 52, paragraph (b) of RA 9184 may be resorted in the
procurement of ordinary or regular office supplies and equipment not available in the
Procurement Service involving an amount not exceeding Two hundred fifty thousand pesos
(P250,000.00): Provt.ded, That the Procurement does not result in splitting of contracts:
Provt.dec/, rurfher, That a price quotation shall be first obtained from a social enterprise as
qualified by the Council as having the capacity to furnish or provide the required office
supplies and equipment. Only in the event of failure of submission or absence of SE price
quotation that at least three (3) price quotations from other bona fide suppliers shall be
obtained.
d.  Negotiated  procurement as provided  under Section  53 of RA 9184 may be allowed when the
goods or services subject of the procurement may be obtained from a SE  within the area of
operation of the procuring entity which is duly qualified by the Council as having the capacity to
supply the required goods and services.
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912
f.     A procuring entity, when applicable, shall have at least one member representing SEMPS.
913
914 Qualified  SEMPs under this Act shall be entitled to a share of at least twenty percent (20%) of the total
915   procurement value of goods and services supplied to the government,  its bureaus, offices and agencies
916     annually.  Provided,  That,  the  DBM  shall  direct line agencies of government to include at least  10%  of
917       its annual  budget for Maintenance and  other operating Expenses and  capital  outlay specifically for
918  goods procured and services contracted from social enterprises producing and offering such goods and
919 services.
920   SECTION 30. /nsurance fo/ Socf.a/ EnferpH-see. The Insurance Commission shall issue the necessary
921    rules   and  regulations   and  implement   measures   to ensure that   the  insurance industry   shall  provide
922   insurance products,  both life and non-life, for social enterprises and their stakeholders among the poor.
923         Furthermore,  SEMPS shall  be assisted to become eligible and effective insurance providers to their
924 clients and constituents.
925   SECTION 31.     Support for soci.a/ /nves{ors and sE Resource /nsfi-fufjons. -The government shall
926  develop a  program that fosters a community of social  investors and  resource  institutions supportive of
927 social enterprises.
928
929
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936
937
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939
940
941
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943
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SECTloN 32.    Approprfa!fons. -The amount necessary to implement the provisions of this Act
shall be charged against the current year's appropriation of the Office of the President. Thereafter,
such sums as may be necessary for its continued implementation shall be included in the GAA. The
budget requirements for the implementation of this Act for cooperating agencies shall be incorporated
in their respective budgets.
SECTION 33.     Pena/ C/ause. -The penalty of imprisonment for not less than six (6) months but not
more than two (2) years or a fine of  not less than two hundred fifty-thousand  (P250,000) or both
imprisonment and fine, at the discretion of the court, shall be imposed upon any person, who,
intentionally or by gross negligence, fails to provide the benefits,  rights and incentives granted to SEs
in  violation of this Act or perform any act in violation of its provisions.
If a corporation is found to have violated the provisions of this Act, the officers, directors, members or
trustees shall be held liable.  If the violation was committed by a government official or employee,  such
official or employee shall be terminated from the service with forfeiture of all the benefits due him in
addition to the fine and/or imprisonment mentioned above.
Corporations and other juridical entities, financial or otherwise, found representing themselves as a
SE shall be caused to pay double the benefits it reaped from this program through the taxes it was
able to save when it represented itself as a SE.  In addition, the officers of the juridical entity who
represented itself as a SE shall be liable for a fine of P500,000.00 or imprisonment for not less than
two (2) years or both fine and imprisonment at the disoretion of the court.
950
?5_I    _ SECTION 34.    Non-Compliance with the Mandatory Allocation of credit Resources. -
952  Administrative sanctions including  a fine of not less than  Five hundred thousand  pesos (P500,000.00)
953  shall  be  imposed  by the  Banko  Sentral  ng  Pilipinas upon any banking or lending  institution who fails to
954 provide the credit allocations granted to SE in violation Of Section 19 of this Act.
955
956       SECTION 35. Jo,-nf congress;.ona/ Oyers/.givf commt.#ee. -Upon the effectivity of this Act, a
957       Congressional oversight committee, hereafter referred to as the PRESENT Oversight committee is
958        hereby constituted` This committee shall set the overall framework to review the implementation of
959       this Act.  It shall likewise determine inherent weaknesses in the law and recommend necessary
960        remedial legislation or executive measures.
961
962        The PRESENT Oversight committee shall be composed of fourteen (14) members with the
963       chairpersons of the committee on Trade and Industry of the House of Representatives, and the
964       Committee on Trade, Commerce and Entrepreneurship of the senate as co-Chairpersons; and six (6)


members from each House, to be designated by the Speaker Of the House of Representatives, and
the Senate President, respectively.
967
968        For purposes of determining remedial legislation, the PRESENT Oversight committee shall, within six
969        (6) years after the effectivity of this Act, conduct a sunset reviewwhich shall include a systematic
970  evaluation of the impact of this Act,  accomplishments of the program,  and the performance of its
971  implementing agencies.
9
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977
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9981
982
983
984
985
986
987
SECTION 36. Separability. -lf any provision or part of this Act is declared invalid or unconstitutional,
the remaining parts or provisions not affected shall remain in full force and effect.
SECTION 37. Implementing Rules and Regulations. -Within ninety (90) days from the effectivity of
this Act, the Department of Trade and Industry shall, in consultation and coordination with the
concerned government agencies and social enterprise sector, promulgate the necessary rules and
regulations for the effective implementation of this Act.
SECTION 38. Repca/ing C/ause, -For purposes of this Act, Section 11  Of RA 8425 and Sections 50,
52 and 53 of RA 9184 which are inconsistent with this Act are hereby deemed amended.  All other
laws, executive orders, presidential decrees, rules and regulation or parts thereof inconsistent with
any provisions of this Act are hereby repealed, amended or modified accordingly.
SECTION 39. Effecfi.yi.fy. -This Act shall take effect fifteen (15) days from its publication in the
Official Gazette or in two (2) newspapers of general circulation.
988
989      Approved,
990
991