~~ REPUBLIC OF THE PHILIPPINES.

FIFTEENTH CONGRESS _

FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

2272

House Bill No.
EXPLANATORY NOTE
Section 1, Article XV (The Family) of the Constitution provides:

“The State recognizes the Filipino family as the
foundation of the nation. Accordingly, it shall strengthen its
solidarity and actively promote its total development.”

This bill seeks the establishment of a Magna Carta for Kalakalan
Pampamilya which shall grant family-owned businesses certain incentives
and benefits.

The extreme poverty of majority of the Filipinos is an issue of national
concern which the government should immediately address. If government
wants to minimize poverty and hasten economic development, priority
programs must be geared towards the development of the family.

The main purpose of the Magna Carta for Kalakalan Pampamilya is to
encourage the family members to venture into business enterprise in order to
provide work and source of livelihood for the family members. It will likewise
augment the income of family members which can help provide for the basic
human necessities. The proposed measure also seeks to respond to the
national effort of alleviating poverty in the country and thereby accelerate
economic development.

In view of the foregoing, approval of this bill is earnestly recommended.

RUFYS B. ROPRIGUEZ

Wii
IDRIGUEZ, JR.

MAXIMO B. Rt


FIFTEENTH CONGRESS. —) —
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No, 2272

AN ACT
ESTABLISHING THE MAGNA CARTA FOR KALAKALAN PAMPAMILYA,
PROVIDING INCENTIVES AND BENEFITS THEREFOR AND FOR OTHER
PURPOSES

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

SECTION 1. Short Title. — This Act shall be known as the “Magna
Carta for Kalakalan Pampamilya.”

SEC. 2. Declaration of Policy. — It is hereby declared to be the
policy of the State to give priority to the family in the socio-economic
development and enhance the quality of life of every Filipino.

SEC.3.  Kalakalan Pampamilya. — Any family business
enterprise with employees of not more than twenty (20) and with assets of not
more than Five Hundred Thousand Pesos (Php 500,000.00), at the time of
registration, shall qualify for the incentives and benefits provided for under this
Act.

SEC. 4. Kalakalan Pampamilya Office. - The Kalakalan
Pampamilya Office, referred to as the Office, is hereby created under the
Department of Trade and Industry to exercise the following functions:

a) __ Effectively facilitate the financial assistance to qualified family
business enterprise;

b) Assist the designated banks in the collection of payments of
loan granted to family business enterprises;

©) Monitor and evaluate on a regular basis the status of the family
business enterprises which availed of the benefits and incentives under this
Act;

d) Help family business enterprises achieve viability and success;

) Pursue appropriate measures to avail of foreign loans or grants;
and

f) __ Provide such guidelines as may be necessary to carry out the
mandate of this Act.


SEC. 5. Management Board. - The Office shall-be governed by —
a Management Board which shall be composed of the following:

a) Representative of the Secretary of the Department of Trade and
Industry, as Chairman:

b) Representative from the Department of Science and
Technology;

c) Representative from the Department of Finance;

d) _ Representative from the City Mayors’ League of the Philippines;

e) Representative from the Municipal Mayors’ League of the
Philippines; and

Three (3) private sector representatives from the trade and
commerce groups, from the labor groups and from the socio-civic groups, as
members.

The private sector representatives of the Management Board shall be
appointed by the President of the Philippines within thirty (30) days from
approval of this Act.

The secretariat and the technical staff of the Management Board shall
be provided by the Department of Trade and Industry and supplemented by
personnel, as may be necessary, from other departments and agencies of the
government.

SEC.6. Registration. - To acquire a separate and distinct
juridical personality from the owners or members thereof, the Kalakalan
Pampamilya business enterprise shall register as provided under this Act.
Upon such registration, the family business enterprise can own, dispose of
and encumber its properties and enter into contracts on its own account, with
the capacity to sue and be sued, and transact business anywhere in the
Philippines.

The registration fee of Five Hundred Pesos (Php 500.00) shall be paid
to the municipality or city where its principal place of office and business
operations is located.

SEC.7. Benefits and Incentives. — All Kalakalan Pampamilya
business enterprise shall be exempted from all taxes, national or local,
building permit fees and other business taxes, except real property and capital
gains taxes, import duties and other taxes on imported articles. In addition,
any and all income, receipts and proceeds derived from the business
operations of the Kalakalan Pampamilya business enterprise shall be
excluded from the computation of gross income of the individual income tax of
the business owner or members thereof.

It shall be exempted from any and all government rules and regulations
in respect to assets, income, and other activities indispensably and directly
utilized in, proceeding from, or connected with the business enterprise

The family business enterprise, however, shall pay the fee to the
municipal or city treasurer where they are registered, starting on their second
year of operations, based on the following schedule:

a) Those with net assets before financing amounting to not more
than One Hundred Thousand Pesos (Php 100,000.00) shall pay the fee of
‘One Thousand Pesos (Php 1,000.00) per annum;


b) Those with net assets before financing-of not less than One
Hundred Thousand Pesos (Php 100,000.00) and not more than Two Hundred
Fifty Thousand Pesos (Php 250,000.00) shall pay the fee of Two Thousand
Five Hundred Pesos (Php 2,500.00) per annum;

¢) Those with net assets before financing of not less than Two
Hundred Fifty Thousand Pesos (Php 250,000.00) and not more than Four
Hundred Thousand Pesos (Php 400,000.00) shall pay the fee of Four
Thousand Pesos (Php 4,000.00) per annum; and

d) Those with net assets before financing of not less than Four
Hundred Thousand Pesos (Php 400,000.00) and not more than Five Hundred
Thousand Pesos (Php 500,000.00) shall pay the fee of Five Thousand Pesos
(Php 5,000.00) per annum.

In the event the family business enterprise uses a brand name on its
products, such brand name shall first be registered with the Bureau of Trade
Regulation and Consumer Protection, through the Department of Trade and
Industry (DTI) provincial office

SEC.8. Local Development Council. - The local development
councils of the various local government units, shall receive all applications for
the establishment or additional funding of family business enterprises, within
its area of jurisdiction; evaluate and approve or disapprove all applications
within thirty (30) days from receipt thereof, endorse the applications to the
Office for funding; and assist designated banks to collect payments of loan
granted to the family business enterprises.

SEC.9. Registration Fee. - Eighty percent (80%) of the
registration fee shall accrue exclusively to the municipality or city where the
Kalakalan Pampamilya is located, and shall be used for developmental
projects approved by the municipal or city council. Twenty percent (20%) will
be remitted to the National Treasury of the Philippines

SEC. 10. Forfeiture of Exemptions and Benefits. ~ (a) In case of
any violation of the provisions of this Act by the Kalakalan Pampamilya
business enterprise or by any of its officers and authorized representatives, all
the exemptions and benefits herein provided shall, after due notice and
hearing, be forfeited and all existing loans be paid in full.

(b) The exemptions and other benefits provided in this Act shall apply
for a period not exceeding five (5) years from the date of the registration.

SEC.11.  Kalakalan Pampamilya Fund. - The Kalakalan
Pampamilya Fund hereinafter referred to as the Fund, is hereby created as a
source of financial assistance to all qualified family business enterprises.

The Fund shall be appropriated from the national budget, and
supplemented by funds from bilateral and multilateral sources which shall be
negotiated and arranged by the National Government to ensure adequacy of
the Fund.

The Fund shall be deposited with and managed by the Development
Bank of the Philippines (DBP). Disbursements from the said Fund shall be
made solely for investments as equity, grants or loans, in favor of family
business enterprises.


‘SEC. 12. Cancellation of the License. ~ The license of Ka/akalan
Pampamilya business enterprise shall, after due notice and hearing, be
revoked and cancelled upon the failure of the family business enterprise,
without valid reasons, to commence its operations within forty five (45) days
from receipt of the license to operate.

SEC. 13. Implementing Rules and Regulations. - The Secretary
of Trade and Industry shall, in consultation with the Secretaries of Finance,
Labor and the Interior and Local Government, formulate and prepare the
necessary rules and regulations to implement the provisions of this Act within
one hundred twenty (120) days after effectivity thereof.

The rules and regulations issued pursuant to this section shall take
effect fifteen (15) days after publication in a newspaper of general circulation
or by any other means of notification as the Secretary of Trade and Industry
may deem reasonably sufficient to inform interested parties of such issuance

SEC. 14, Annual Report. —- The Management Board shall submit
to the President and the Congress of the Philippines an annual report of its
operations accounting for the availment and use of the financial assistance
including its collection under this Fund.

SEC. 15. Penalties. - Any person who shall divert the financial
assistance allocated under this Act shall, in addition to penalties imposed
under existing laws, be punished with imprisonment ranging from three (3)
years to five (5) years and a fine of Fifty Thousand Pesos (Php 50,000.00).

‘Any public officer or employee who shall, on his own or in connivance
with others, commit the act mentioned under the preceding paragraph shall be
punished with the maximum penalty imposed under the law in addition to
perpetual disqualification from public office.

Finally, if the offender is an alien, he shall be deported immediately
without further proceedings, after service of sentence.

SEC. 16. Appropriations. - There is hereby authorized to be
appropriated from the unappropriated funds of the Office of the President, the
amount of One Billion Pesos (Php 1,000,000,000.00) as initial capital of the
Kalakalan Pampamilya Fund.

The Management Board shall submit to the Office of the President the
budget needed for its operations for inclusion in the annual General
Appropriations Act

SEC. 17. _ Repealing Clause. - All laws, decrees, orders, rules and
regulations, or parts thereof, inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SEC. 18. _Effectivity Clause. - This Act shall take effect thirty (30)
days after its publication in two (2) national newspapers of general
circulations.

Approved,