Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City»

EIGHTEENTH CONGRESS
First Regular Session

7335

HOUSE BILL NO.

Introduced by REPRESENTATIVE MANUEL ANTONIO F. ZUBIRI

EXPLANATORY NOTE

The COVID19 pandemic that is currently ravaging the health of the Filipino and the economy has
opened a lot of realizations of what comprises the economy of the nation. The recent slump of
16.5% by the economy further pushed the poor and marginalized to poverty as unemployment and
lack of access to basic necessities increased.

‘Asa result, stimulus packages are being drawn by the government to jump start the economy while
balancing the safety of the people. To ensure that stimulus packages benefit the poor and

lized, businesses that operate not purely for profit or businesses that support the poor and
ed by allotting a huge portion of their revenues for such sectors need to be supported by
the government.

The Poverty Reduction through Social Entrepreneurship (PRESENT)Bill has been pending in Congress
since 2012. And this bill has been filed for this congress in both the Senate and House of
Representatives. This growing recognition of the importance of social enterprises as partners of
government in making good its commitment to accelerate the achievement of the Sustainable
Development Goals of zero poverty, food security, reduced inequality, women’s economic
‘empowerment and building resilient and sustainable communities reflect the importance of this bill.

Before the pandemic, social enterprises numbered around 164,000 representing more than 15% of
all enterprises in the country. They come in the form of cooperatives and associations of farmers,
agrarian reform beneficiaries, fishers, indigenous people, women, persons with disability and
overseas Filipino workers and their families; microfinance institutions serving the enterprising and
entrepreneurial poor; trading development organizations practicing ethical and fair trade; and
social-mission driven corporations and foundations providing decent jobs and services, sustainable
livelihoods and access to markets to women and men small producers and various segments of the
rural and urban poor.

‘An ongoing study of the Institute for Social Entrepreneurship in Asia (ISEA) provides an indication of
the impact of COVID19 on these social enterprises: More than 50% have experienced a major
downturn; close to 40% have experienced some downturn and less than 10% managed to sustain
their operations. Those who sustained their operations were mainly in agriculture and essential
services such as rice trading and social enterprise accounting.

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‘Amidst the challenges of Enhanced Community Quarantine, a number of social enterprises found
ways to sustain their operations or pursue innovations. These included the production and
distribution of personal protective equipment and face masks to provide livelihood to their partner
craft communities; cooperative-to-cooperative trading to provide mutual support to their farmer-
members and sustain the sales of their respective agricultural products; engaging the Department of
Agriculture in securing and distributing open pollinated varieties of corn and vegetable seeds to
strengthen community-based seed banking; continuing with organic and sustainable agriculture
production and marketing; implementing a moratorium on loan collections; shifting to e-marketing
and/or door-to-door delivery of their products to reach households and sustain or expand their
‘customer base; shifting to social microfinance by transforming all loans as capital invested with their
clients as business partners; and developing proposals for responsive relief and recovery measures
that government and private sector players can implement in partnership with social enterprises.

With the efforts of social enterprises and what they contribute directly to the people, it is clear that
a National Poverty Reduction through Social Entrepreneurship Program is needed, a support
package in the form of hybrid financing—a combination of loans ang grants—to enable the creation
of new and the recovery of existing social enterprises, towards effectively engaging the poor as
workers, suppliers, clients, co-owners and partners in economic recovery as well as tax breaks and
incentives. As enshrined in this bill, this will create decent jobs and sustainable livelihoods in
strategic economic subsectors and value chains where the poor are concentrated and could be
‘major players. This will allow them to use their hard-earned cash in recovery efforts and building
back better.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

MANUE|/ANTON|
Repres¢ntative
Third District, Bukidnon

F. ZUBIRI

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

7335

HOUSE BILL NO.

Introduced by REPRESENTATIVE MANUEL ANTONIO F. ZUBIRI

AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE POVERTY, ESTABLISHING
FOR THE PURPOSE THE POVERTY REDUCTION THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT)
PROGRAM AND PROVIDING INCENTIVES, BENEFITS AND APPROPRIATIONS THEREFOR

CHAPTER |
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “Poverty Redu
Entrepreneurship Act.”

ion through Social

SECTION 2, Statement of Policy. ~ As provided in the Constitution of the Republic of the Philippines,
it is the declared policy of the State to promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through policies that,
provide adequate social services, promote full employment, a rising standard of living, and an
improved quality of life for all. In Article Il, Sections 10 and 11, itis further declared that the 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.

In Article Xil, Section 1, itis 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.

The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and foreign markets. However, the
State shall protect Filipino enterprises against unfair foreign competition and trade practices.

The State also recognizes the important role of enterprises in the economy as the major agent of
development, creating off-farm employment opportunities and providing transitional means for
improving the livelihood of the people.

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Towards this end, the State shall pursue a poverty reduction program that promotes an environment
conducive to the development and growth of a vibrant social enterprise sector engaged in poverty
reduction, economic and social development. it shall empower the marginalized sectors as primary
stakeholders in social enterprises, establish mechanisms essential to realizing their potential and
achieving their full growth, and extend the assistance necessary for their advancement. The State
shall likewise ensure that the provision for technical and financial assistance, incentives and other
services are free from any condition that might infringe upon the autonomy or organizational
integrity of the social enterprises to enable them to develop into viable and vital anti-poverty agents,
and a strong social entrepreneurship movement which will be instrumental in reducing poverty in
the country.

SECTION. 3. Definition of Terms. ~ As used in this Act:

a. Social Enterprise or SE refers to primarily a social mission driven wealth-creating
organization, however organized, whether as non-stock non-profit including NGOs, POs,
Foundations, Associations; cooperatives, sole proprietorship, partnerships, corporations,
established to improve societal well-being as well as ecological sustainability. A social
enterprise for purposes of this act shall also mean a Social Enterprise with Marginalized
Sectors 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 sectors as 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. In addition
to reinvesting its surplus or profits back towards 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.

b. Assets refer to all kinds of properties, real or personal, owned by the social entrepreneur as
defined in paragraph (dd) 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;

. Basic sectors shall refer to the disadvantaged sectors of Philippine society, namely: farmer-
peasant, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in
the informal sector, indigenous peoples and cultural communities, women, persons with
disability, senior citizens, victims of calamities and disasters, youth and students, children,
and urban poor as defined under Republic Act (R.A.) No. 8425, otherwise known as the
“Social Reform and Poverty Alleviation Act;”

d. Copability building refers to the process of enhancing the viability and sustainability of
SEMPS and pertain to education, training, coaching and other learning events like study
tours; technical, consultancy and advisory services; assistance in organizational systems
development; technology incubation, development and dissemination; value chain and
subsector development; conduct of SE trade fairs and missions; 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

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activity that connotes the infusion of capital or funds from the government or from the SE
Development Fund created under Section 17 of this Act;

Givi society organizations refer to private voluntary 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;

Council shall refer to the SE Council;

Cooperative 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";

Economic subsectors are networks of related actors and enterprises performing 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;

Empowerment strategy shall mean 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;

Fair trade 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;

Fair trade organizations shall mean enterprises certified by internationally- and nationally-
recognized Fair Trade networks;

Fair trade principles 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;

Foundation shall mean 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. A foundation

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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;

Hybrid financing 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 well-being - in ways that are ecologically and financially
sustainable;

Intermediation 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. ASE 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;

‘Morginalized Sectors shall refer to groups 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;

Microfinance 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;

‘Minimum basic needs 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)

Non-Government Organization or NGO refers 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 Republic Act No. 8424, as
amended, otherwise known as the National Internal 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 com!
thereof, and no part of the net income of which inures to the benefit of any private
individual;

People's Organization or PO refers 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 lawful common social or economic end;

Persons with Disability 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;

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Poor shall 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.

Poverty reduction/alleviation shall mean overcoming the income, resource, and capability
deprivation among the poor as defined in the preceding paragraph and the marginalized
sectors as defined in paragraph (q) hereof;

Private 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;

Procuring Entity refers 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;

Resource mobilization 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;

SEGFP refers to the SE Guarantee Fund Pool created under this Act;

Social development refers 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;

Social Enterprise Resource Institution refers 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;

Social entrepreneur refers 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 well-being;

Social entrepreneurship entails innovations designed to explicitly improve societal well-being,
housed within entrepreneurial organizations, which initiate, guide or contribute to change in
society;

Social Inclusion strategy refers 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

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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;

99. Social Investors are 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 which may
include poverty reduction, concern for environmental protection, strong organizational
governance, and a desire for a more economically just world;

hh, Social reform refers to the continuing process of addressing the basic inequities in society
through a systematic, unified and coordinated delivery of socioeconomic programs or
packages;

ii, Transactional services refer to enterprise related assistance to the poor that involve an
exchange of goods or services for money including being workers, suppliers, clients or
‘owners;

jj. Transformational services 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;

kk. Value chain refers 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 towards improving the position and benefits of the poor in the value chain and
towards ensuring the viability and sustainability of the enterprise.

CHAPTER II
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE

SECTION 4, Social Enterprise (SE); General Concept and Coverage ~ A Social Enterprise (SE), for
purposes of this Act, refers to a Social Enterprise with the Marginalized Sectors as Primary
Stakeholders (SEMPS) as defined in Sec. 3 (a) of this Act.

‘An SE employs any of the following development strategies in the pursuit of its social mission: 1)
‘empowerment strategy; 2) social inclusion strategy; 3) intermediation strategy; and, 4) resource
mobilization strategy.

in the case of social enterprises organized as stock corporations, partnerships or sole
proprietorships, these social enterprises must not be a branch, subsidiary or division of a private
business enterprise, regardless of the size of such private business enterprise, nor may its policies be
determined by a private business enterprise. Provided, that this shall not preclude an SE from
accepting subcontracts from large private business enterprises or firms or from joining in
cooperative or joint-venture activities with other SEs or foundations.

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SECTION 5. Qualifications for Benefits and Incentives. - To qualify for the benefits and incentives
provided for in this Act, the SE shall:

‘a. Provide or facilitate the provision of a combination of transactional and/or transformational
services to improve the position and benefits derived by the poor from the SE and the value
chain or economic subsector where the SE is located, including becoming worker-owners,
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;

¢. Make 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. Ensure that a substantive part of the wealth created by the enterprise is distributed 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;

f. Be duly registered with the appropriate agencies as provided under the Corporation Code or
the Cooperative Code of the Philippines, Magna Carta for Micro, Small and Medium
Enterprises, Barangay Micro Business Enterprises Act, Microfinance NGOs’ Act, and other
laws;

Asocial enterprise may be organized as a stock corporation, partnership or sole proprietorship
provided that it (which) invests at least 60% of its net revenues to sustain the fulfillment of its social
mission and provides transformational services for the well-being of the marginalized sector it
serves.

Social enterprise resource institutions may also avail of support from government as partners for
building the capability and sustainability as well as developing an enabling environment for social
enterprises to flourish, provided they have:

a. a registration as a legal entity in the Philippines

b. a dedicated program supporting social enterprises

c. a track record of at least three (3) years of implementation of a dedicated SE program

d. at least three (3) qualified social enterprises vouching for their them

International social enterprise resource institutions and their subsidiaries operating in the
Philippines must partner with a qualified local social enterprise resource institution to avail of
government support.

Financial sustainability shall not be a prerequisite for the availment of incentives and benefits under
this Act. Provided that, social enterprises that have not achieved financial sustainability may be
eligible to avail of the services, assistance and incentives set forth in this Act by presenting a
workable strategy to achieve financial sustainability over a reasonable period.

SECTION 6. Formulation of a Poverty Reduction through Social Entrepreneurship (PRESENT)
Program. — To promote the development of a SE sector with the marginalized sectors as primary
stakeholders, a comprehensive and fully-integrated Poverty Reduction Through Social
Entrepreneurship (PRESENT) Program shall be formulated, guided by the following principles:
a. Incorporation of the PRESENT Program in the government's poverty reduction drive as a
‘major sustainable and comprehensive strategy;

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b. Rationalization of 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. People’s participation 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 increase 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 poor in economic subsectors and value chains;

f. Gender-sensitivity by ensuring women’s equal rights and access to SE’s resources; and,

g. Development of sustainable mechanisms for the provision of quality and accessible social
services to the poor.

The planning framework of the PRESENT Program and its planning process shall ensure that the
marginalized sectors are engaged as primary stakeholders. It shall add value and complement
ecosystem-based, area-based, community-based and other tools and processes in local economic
development by promoting and utilizing the economic subsector as a strategic unit of analysis and
planning SE development interventions.

‘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. Lead Agency. - The Department of Trade and Industry shall serve as the central planning,
coordinating, implementing and monitoring body of the program.

In the implementation of this Act, the DTI shall perform the following functions:

Work in close coordination with DSWD and DA in targeting the different sectors intended to

be benefitted by the program;
._ Disseminate the information relating to the program;

¢. 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.

SECTION 8. Social Enterprise Development Council. - To carry out the policy declared under this Act,
a Social Enterprise Development Council (SEDC), hereinafter referred to as the Council, is hereby
created as an agency attached to the Department of Trade and Industry (DTI). It shall be the 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:

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541
542
543
544
545
546
547
548

yameanse

Servnepesgcre:

Secretary of Trade and Industry, as chairperson
Secretary of Agriculture, as co-chairperson

Secretary of Social Welfare and Development, as vice chairperson

SE sector head representative, as co-vice chairperson

Office of the President

Director-General of the National Economic Planning and Development Agency
Lead Convener of the National Anti-Poverty Commission

Secretary of the Interior and Local Government

Secretary of Finance

Governor of the Bangko Sentral ng Pilipinas

Secretary of Environment and Natural Resources

Secretary of Agrarian Reform

Secretary of Science and Technology

Secretary of Labor and Employment

Secretary of Education

Secretary of Transportation

Secretary of Information and Communications Technology

Chairman of the Commission on Higher Education

Chairman of the Cooperative Development Authority

Chairman of the Securities and Exchange Commission

Director-General of the Technical Education and Skills Development Authority
Nine (9) representatives from SEMPS, three (3) representatives each from the main island
groupings of Luzon, Visayas, and Mindanao.

SECTION 9. Powers and Functions. ~The Council shall have the following powers and functions:

a

eomee

Formulate policies and plans to develop and promote, coordinate, synergize, integrate, and
ensure compatibility and complementation of policies and programs for SEs as well as other
anti-poverty reduction initiatives consistent with national development objectives.

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.
Issue certificate of qualification upon determination that the criteria set for this purpose
have been fully satisfied: Provided, That the certificate of qualification shall be valid only for
such period as may be prescribed under the implementing rules and regulations of this Act;
Oversee the successful implementation of the PRESENT Program and other SE programs;
Identify and access sources of financing to expand the SE sector;

Monitor and evaluate the performance of programs and projects for appropriate incentives;
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.

Call upon people's organizations, non-government 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;
‘Submit annual and other periodic reports to the President and the Congress of the
Philippines through the Congressional Oversight Committee;

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 23;

Propose the concomitant plantilla position and structure for the personnel under it;
Manage the funds provided for by this law, including ensuring the funds’ growth where

Page 11 of 20


549
550
551
552
553
554
555
556
557
558
559
560
561
562
563
564
565
566
567
568
569
570
S71
572
573
574
575
S76
S77
578
579
580
581
582
583
584
585
586
587
588
589
590
591
592
593
594
595
596

possible;

m. Align and synchronize the provision of support programs, benefits and incentives for SEs
provided for in this Act; and

n. Perform such other functions as may be necessary for its effective operations and the
continued enhancement, growth and development of the SE sector.

SECTION 10. Designation of Permanent Representatives to the Council. Within 30 days from the
effectivity of this Act, Cabinet-ranked ex-officio members of the Council shall designate a permanent
representative to the council, to attend the meetings of the council in cases that the Cabinet-ranked
ex officio members cannot personally attend such meetings. The designated permanent
representative of any of the Cabinet-ranked members of the Council must hold a position not lower
than a bureau director.

SECTION 11. Term and Appointment of SE Sector Representatives. Within 90 days, DT! as Chair shall
convene members of the Council from the Philippine Government, as identified in Section 10, who
shall in turn, confirm representatives of social enterprises and social enterprise resource institutions.
Said SE and SE Resource institution representatives must have been screened and pre-selected by
the SE sector convened by DTI, DA, DSWD.

The islands of Luzon, Visayas, and Mindanao shall each have two (2) representatives who will be
appointed for a term of three (3) years. While another three (3) representatives each representing
Luzon, Visayas and Mindanao shall be appointed for a term of two (2) years to ensure continuity.
Upon the expiration of all the terms of these first set of officers, all terms of SE Sector
Representatives shall be for three (3) years. No person shall be appointed to serve as an SE
representative in the SEDC for more than a period of two (2) terms or more than six (6) years.

‘Any vacancy in the SEDC arising from the death, incapacity, resignation, or termination of the term
of an appointed SE representative shall be filled up within 90 days from the occurrence of the said
vacancy. All nominations to the vacancy shall be submitted within 60 days from the occurrence of
such. This process should be consistent with the previous appointment process. In the case of
vacancy arising from death, incapacity or resignation, the representative appointed to the vacancy
shall serve only for the remaining period of the term for the vacated office.

SECTION. 12. Secretariat. There is hereby created a Secretariat headed by an Executive Director
and two (2) Deputy Directors, and supported by staff, whose composition shall be determined by the
‘SEDC, to serve as the national, technical and administrative secretariat of the Council with the
member agencies providing additional support staff when the need arises. The Secretariat shail
perform the following functions:

a. Provide administrative support to the Council, with the a
and Development Authority secretariat in the formula
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 accreditation 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;

stance of the National Economic
n of the PRESENT development

Page 12 of 20


597
598
599
600
601
602
603
604
605
606
607
608
609
610
611
612
613
614
615
616
617
618
619
620
621
622
623
624
625
626
627
628
629
630
631
632
633
634
635
636
637
638
639
640
641
642
643
644
645,
646

f. Submit periodic reports to the Council on the progress and accomplishment of its work
programs; and
g. Perform other functions that may be assigned and authorized by the Council

SECTION 13. Office. - The Council shall have its principal place of business within the DT!’s premises
or it may establish an office in Metro Manila. It may also establish such branches within the
Philippines as may be deemed necessary by the President of the Philippines to carry out the powers
and functions of the Council

SECTION 14. National Center for Social Enterprise Development. ~ There shall be established a
National Center for Social Enterprise Development (NCSED) under the Council which shall perform
the following functions:

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
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; and

e. Supervise capability- building projects approved by the Council implemented through
reputable Social Enterprise Resource Institutions contracted for the purpose

‘The NCSED shall be headed by the Executive Director of the Council Secretariat. It shall maintain a
multi-sectoral, multi-disciplinary poo! 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.

The NCSED shall coordinate with the University of the Philippines institute for Small Scale Industries
(UP ISSI), the Technical Education and Skills Development Authority (TESDA), the Department of
Transportation (DOTr), Department of information and Communications Technology, civil society
organizations and other relevant agencies, state universities and colleges in implementing its
programs.

SECTION 15. Personnel. - Subject to the civil service laws, rules and regulations, the Council is
authorized to select, appoint, employ and fix the compensation of the officers and employees of the
Secretariat and the NCSED as shall be necessary to carry out its functions.

SECTION 16. Role of LGUs in SE Development - LGUs shall be encouraged to incorporate viable
‘SE Development Plans in their local plans and collaborate with SEMPs.

CHAPTER Il
DEVELOPMENT OF SOCIAL ENTERPRISES

‘SECTION 17. SE Capability Building and Sustainability Program; Creation of SE Development Fund.
— 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

Page 13 of 20


647
648,
649
650
651
652
653
654
655
656
657
658
659
660
661
662
663
664
665
666
667
668
669
670
671
672
673
674
675
676
677
678
679
680
681
682
683
684
685
686
687
688
689
690
691
692
693
694

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, disaster-resiliency and other related activities.

The SE Capability Building and Sustainability Program shall likewise include the establishment of an
insurance system for SEs affected by natural calamities in line with the National Framework Strategy
on Climate Change 2010-2022 as provided for under RA 9729 or the Climate Change Act of 2009 and
RA 10121 or the Philippine Disaster Risk Reduction and Management Act of 2010.

For this purpose, there is hereby created and established an SE Development Fund (SEDF) in the
initial amount of Three Billion Pesos (@3,000,000,000.00) to be administered by the Council
chargeable against the General Appropriations Act following the year of the effectivity of this Act.
The SEDF shall likewise be funded with one percent (1%) of the following: 2) collected taxes pursuant
to the implementation of the SIN TAX Law; 3) earnings derived by the TIEZA from its collections; and
4) equity contributions of participating government financial institutions. Voluntary contributions,
grants, gifts from both local and foreign sources as may be accepted by the Council shall also form
part of the SEDF.

The Social Enterprise Development Fund may also come from programs or projects implemented by
national government agencies funded by development assistance from bilateral or multilateral
development partners.

‘Additional funding and appropriation shall be provided by the Office of the President as the needs
arise during calamities, pandemics and other extra-ordinary circumstances, subject to audit by the
Commission on Audit. Social enterprise resource institutions may receive funds for social enterprise
programs.

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 credit 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.

SECTION 18. Social Enterprise Recovery and Rehabilitation Fund. -in light extreme disasters and
pandemics, a Social Enterprise Recovery and Rehabilitation Fund is hereby established for financing

Page 14 of 20


695
696

697
698
699

700
701
702
703
704
705
706
707
708
709
710
ma
712
713
74
ns
716
n7
718
ng
720
721
722
723
724
725
726
27
728
729
730
731
732
733
734
735
736
237
738
739
740
741
742
743,
744

programs and projects supporting adaptation and resilience of social enterprises, including stimulus
grants. The Fund shall be lodged under the Department of Trade and Industry.

SECTION 18. Social Enterprise Research and Development System. -The Council, in coordination
with the NEDA, DOST, and DTI, and other appropriate agencies and research institutions, shall
develop and enhance a research and development system that:

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 in 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.

SECTION 19. Social Enterprise Marketing Infrastructure Development. - The Council 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
DTI 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.

All government departments, agencies, bureaus, research institutions, as well as the LGUs shall
consolidate and continuously update all relevant information and data that would be of use to SEs on
a periodic basis and make such data available in a dedicated website on the internet.

The SMIN shall provide information and marketing services related to products of SEMPS which shall
include the following:
a. Supply data;

b. Demand data;

c. Price and Price trends;

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;

g._ International, regional and local market forecasts; and

h. Resource accounting data.

CHAPTER IV
INCENTIVES AND BENEFITS

Page 15 of 20


745,
746
747
748
749
750
751
752
753
754
755
756
787
758
759
760
761
762
763
764
765
766
767
768
769
770
™m™
772
773
774
775,
776
m7
778
779
780
781
782
783
784
785
786
787
788
789
790
791
792
793
794
795

SECTION 20. Hybrid Financing. ~ Social Enterprises shall be supported through hybrid financing to
enable them to provide a combination of transactional and transformational services to the
marginalized they serve. Given the unique nature of SEs as wealth creating organizations that pursue
their social mission to improve societal well-being in ways that are ecologically and financially
sustainable, they need to be supported through hybrid financing that entails a combination of grants
with loans and other financial instruments.

SECTION 21. Special Credit Windows with non-collateralized loans. ~ In addition to the special
credit windows provided for the promotion of microfinance as provided under Section 16 of RA
£8425, the Land Bank of the Philippines, Development Bank of the Philippines, Philippine Postal Bank,
and Al Amanah Bank, and other public or government-owned banks are hereby mandated to set
aside at least ten percent (10%) of their total loan portfolio based on their balance sheet in the end
of the preceding quarter over a period of five (5) years and open a special credit window for qualified
SEs.

For a period of eight (8) years from the date of the effectivity of this Act, all other lending
institutions as defined under the Central Bank Act or the General Banking Act, as amended, shall
likewise set aside at least ten percent (10%) of their total loan portfolio that will not require a
collateral based on their balance sheet as of the end of the previous quarter and make the same
available for SEs through a special credit window. The BSP, in consultation with the Council, shall
formulate the rules for the effective implementation of this provision: Provided, That the purchase
of government notes, securities and other negotiable instruments shall not be deemed compliance
with the foregoing provision.

The Council shall establish a system to monitor all loan applications of SEs in order to account for the
absorptive capacity of the SE sector.

The BSP shall require lending institutions covered by this Act to furnish the Council on a quarterly
basis a regular report on their respective compliance with the above provisions on the mandatory
credit allocations for SEs and shall act immediately on the Council's reports of non-compliance
therewith,

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 22. Special Credit Window Purposes. - The special credit window provided under Section
21 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;

. 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; and

Page 16 of 20


796
797
798
799
800
801
802
803
804
805
806
807
808
809
810
811
812
813
814
815
816
817
818
819
820
821
822
823
824
825
826
827
828
829
830
831
832
833
834
835
836
837
838
839
840
841
842
843
B44
845,

Credit Line for re-lending to finance the livelihood project requirements of end-
borrowers.

SECTION 23. Grant facility. The SE Development Fund in Section 18 shall provide grants to qualified
social enterprises and resource institutions for the performance and conduct of their mission
towards poverty reduction, promotion of social justice, and improvement in economic welfare of the
poor and marginalized sectors.

There will be three windows under this fund facility, namely: capacity-building grant; start up
enterprise grant; ecosystem-building grant. The SE Council shall formulate the guidelines for the
management and implementation of grant assistance.

SECTION 24. Strengthening of the Agriculture and Fisheries Credit Policy. - In addition to the
special credit window provided above, at least ten percent (10%) of the funds created under Section
6 of RA 10000, otherwise known as "The Agri-Agra Reform Credit Act of 2009," is mandated to be set
fe by all banking institutions, whether government or private, for SEs engaged in agriculture and
fisheries activities as credit.

SECTION 25. Tax Exemptions. - Without prejudice to existing tax exemption provisions already
applicable to different SEs under other laws, a qualified SEMPS shall have the following tax
‘exemptions for five (5) years subject to renewal of another five (5) years:

a) SEMPs with a net annual income of not more than Fifteen million pesos (P15,000,000.00)
shall be exempt from all national, city, provincial, municipal or barangay taxes of whatever
nature: Provided, that such net income shall be allocated for transformational services and
other activities of the SE

b)_VATand other percentage taxes;

¢)_ Documentary stamp tax;

d) Capital gains tax on sales or exchanges of real property classified as ca
of stock; and

e) Donor’s Tax on donations made to SEs;

| assets or shares

SEDC will develop a system of valuation of social, economic and ecological contributions of social
enterprises to society and the social impact among the marginalized sector they serve, as bases for a
comprehensive incentives package from government.

All SEMPs duly certified by the Council, in consultation with the Department of Finance (DOF) and
the Board of Investment (BO!) of the DTI, shall be exempted from the payment of VAT, tariff and
duties for the importation of all types of product inputs, equipment, machinery, implements, and
spare parts: Provided, That these inputs, equipment, machinery, implements, and spare parts shall
be for the exclusive use of the importing SEMPS and can be shown to be directly related to further
improve the value chain operations of the SEMPS.

The Council shall, in consultation with the DOF and the BOI, within ninety (90) days from the
effectivity of this Act, formulate the implementing rules and regulations governing the importation of
the inputs, equipment, machinery, and implements for use by the SEMPS.

For income tax purposes, a reinvestment made by a SEMPS for the expansion of its socioeconomic
the area of its operation shall be tax deductible from the gross income.

projects wit

Page 17 of 20


846
847
848.
349
850
851
852
853
854
855
856
857
858
859
860
861
862
863
864
865
866
867
868
869
870
871
872
873
874
875
876
877
878
879
880
881
882
883

884
885,
886
887
888
889
890
891
392
893
894
395

SECTION 26. Preferential Rights. ~ 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.

‘SEMPs shall be given priority and preference in the following procurement processes:

a. Direct contracting as provided under Section 50 of RA 9184, otherwise known as the
“Government Procurement Reform Act,” may be resorted to if the contracting party selling
the goods and services required by the procuring entity is a social enterprise as certified by
the Council.

b. Shopping as provided under Section 52, paragraph (a) of RA9184 may be resorted to when
there is an unforeseen contingency requiring immediate purchase: Provided, That the
procurement of the goods and services shall be first obtained from the social enterprise
within the area of operation of the procuring entity which is duly certified by the Council as
having the capacity to supply the required goods and services: Provided, further, That the
amount shall not exceed One hundred thousand pesos (P100,000.00)..

. 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): Provided, That the Procurement does not result in splitting of contracts:
Provided, further, That a price quotation shall be first obtained from a social enterprise as
certified 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 certified by the Council as having the capacity
to supply the required goods and services.

. Aprocuring entity, when applicable, shall have at least one member representing SEMPS.

‘Qualified SEMPs under this Act shall be entitled to a share of at least twenty percent (20%) of the total
procurement value of goods and services supplied to the government, its bureaus, offices and
agencies annually. Provided, That, the DBM shall direct line agencies of government to include at least
10% of its annual budget for Maintenance and Other Operating Expenses and Capital Outlay
specifically for goods procured and services contracted from social enterprises producing and offering
such goods and services.

SECTION 27. Insurance for Social Enterprises. The insurance Commission shall issue the necessary

rules and regulations and implement measures to ensure that the insurance industry shall provide
insurance products, both life and non-life, for social enterprises and their stakeholders among the

poor. Furthermore, SEMPS shall be assisted to become eligible and effective insurance providers to
their clients and constituents.

SECTION 28. Incentives for Social Investors, SE Resource Institutions. — Social investors and social
enterprise resource institutions that contribute money or other forms of contribution in the
promotion and development of SEs shall be entitled to the following tax incentives:

‘© Equity investments shall be fully deductible from the gross income of the investor.

© Donations made to qualified SEMPS shall be exempt from donor's tax.

Page 18 of 20


396
897
398
899
900
901
902
903
904
905
906
907
908
909
910
911
912
913
914
915
916
917
918
919
920
921
922
923
924
925
926
927
928
929
930
931
932
933
934
935
936
937
938
939
940
941
942
943

‘* Dividends or other forms of profit shares received from a qualified SEMPS shall be exempt
from income tax.

* Grants and contributions to a qualified SE shall be deductible from gross income in the case
of corporate taxpayers and shall be included in the items chargeable against the estate in the
case of an individual taxpayer.

* Dedicated program funds for SE development and SE ecosystem building initiatives shall be
exempt from taxes.

The provisions of this Section shall apply to a social investor or SE resource institution when the
recipient SE has been certified as qualified SE by the Council.

SECTION 29. Appropriations. — 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 30. Penal Clause. ~ 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 discretion of the court.

SECTION 31. Non-Compliance with the Mandatory Allocation of Credit Resources. ~
Administrative sanctions including a fine of not less than Five hundred thousand pesos (PS00,000.00)
shall be imposed by the Banko Sentral ng Pilipinas upon any banking or lending institution who fails
to provide the credit allocations granted to SE in violation of Section 19 of this Act.

SECTION 32. Joint Congressional Oversight Committee. ~ Upon the effectivity of this Act, a
Congressional Oversight Committee, hereafter referred to as the PRESENT Oversight Committee is
hereby constituted. This Committee shall set the overall framework to review the implementation of
this Act. It shall likewise determine inherent weaknesses in the law and recommend necessary
remedial legislation or executive measures.

‘The PRESENT Oversight Committee shall be composed of fourteen (14) members with the

chairpersons of the Committee on Trade and Industry of the House of Representatives, and the
Committee on Trade, Commerce and Entrepreneurship of the Senate as Co-Chairpersons; and six (6)

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members from each House, to be designated by the Speaker of the House of Representatives, and

the Senate President, respectively.

For purposes of determining remedial legislation, the PRESENT Oversight Committee shall, within six
(6) years after the effectivity of this Act, conduct a sunset review which shall include a systematic
evaluation of the impact of this Act, accomplishments of the program, and the performance of its
implementing agencies.

SECTION 33. Separability. - If 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 34. 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 35. Repealing Clause. ~ 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 36. Effectivity. — This Act shall take effect fifteen (15) days from its publication in the
Official Gazette or in two (2) newspapers of general circulation.

Approved,

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