Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
19th Congress 
First Regular Session 
House Bill No. ________________ 
Introduced by REPRESENTATIVE EMIGDIO P. TANJUATCO III 
EXPLANATORY NOTE 
Micro, small, and medium enterprises (MSMEs) play a vital role in promoting economic 
growth, which is not limited to the formulation of wealth or capital. MSMEs are crucial to 
creating new local industries to the provinces and likewise stimulating employment therein. 
MSMEs are mostly labor intensive, thus providing jobs wherever they are established, hence 
encouraging equity in income distribution 
 MSMEs serve as the backbone of the Philippine economy. As of 2020, the Philippine 
Statistics Authority accounted for 99.51% of existing establishments as MSMEs with micro-
enterprises producing almost 30% of the total jobs available in the country. 
The biggest challenge for these players to date, is access to financing. Credit may be available 
to them but interest rates are just too high for micro-enterprises to be competitive and still turn 
a profit. 
This bill seeks to institutionalize the "Pondo sa Pagbabago at Pag-asenso Fund”, or "P3 Fund” 
introduced by the Small Business Corporation upon the directive of the President. This same 
fund has served as a lifeline for many entrepreneurs during the pandemic and continues to 
help many more as the country’s economy begins to bounce back.  The program offers access 
to collateral-free credit for qualified micro-enterprises at interest rates lower than those offered 
by private micro-financing institutions. 
With the availability of cheap credit through the P3 Fund, entrepreneurs are given the 
opportunity to grow their business, compete not just locally but internationally, and continue 
generating jobs for a greater number of Filipinos. 
In view of the foregoing, passage of this bill is earnestly sought. 
EMIGDIO P. TANJUATCO III 
July 1, 2022
8:00 am
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
19th Congress 
First Regular Session 
House Bill No. _________________ 
Introduced by REPRESENTATIVE EMIGDIO P. TANJUATCO III 
AN ACT  
INSTITUTIONALIZING THE PONDO PARA SA PAGBABAGO AT PAG-ASENSO 
PROGRAM TO PROVIDE A SUSTAINABLE SOCIALIZED MICROFINANCING 
PROGRAM FOR MICRO ENTERPRISES THEREBY PROMOTING 
ENTREPRENEURSHIP 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Title. – This Act shall be known as the 'Pondo sa Pagbabago at Pag-
asenso" or the "P3 Act". 
SEC. 2. Declaration of Policy. –  It is the policy of the State to foster national 
development, promote inclusive growth, and reduce poverty by promoting the growth of micro, 
small, and medium enterprises (MSMEs) that facilitate local job creation, production and trade 
in the country. Towards this end, the State shall develop policies, plans and programs, and 
initiate means to encourage entrepreneurial activities, and to east the constraints and 
challenges to MSMEs, particularly on access to financing. 
SEC. 3. Objectives. – The objectives of this Act are as follows: 
(a) To provide an affordable, accessible and simple micro financing program for the country's
micro enterprises, especially those in the poorest populations.; 
(b) To provide a better alternative to the informal lenders or the so-called "5-6" money lending
system availed of by micro enterprises; and 
(c)To bring down the interest rate at which micro finance is made available to micro
enterprises. 
SEC. 4. Creation of the Pondo sa Pagbabago at Pag-asenso (P3) Fund. - There is 
hereby created the "Pondo sa Pagbabago at Pag-asenso Fund", hereinafter referred to as the 
"P3 Fund”, which shall be lent out to qualified MSMEs under such terms and conditions that 
will meet the purposes of this Act. 
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The beneficiaries of the "P3 Fund” shall be micro enterprises and entrepreneurs 
including market vendors, agri-businessmen and members of cooperatives, industry 
associations and cooperators. 
The fund shall be primarily lent through conduit financial institutions to be accredited 
for the purpose. 
 
SEC. 5. Lead Implementing Agency. –  The Small Business Corporation (SBCorp.), 
the financing arm of the Department of Trade and Industry (DTI), shall be the lead 
implementing agency for the "P3 Fund". It shall handle the fund delivery to micro enterprises 
through the following modes: 
(a) Direct lending to micro enterprises; 
(b) Wholesale lending to conduits, such as micro finance institutions (MFIs), rural 
banks and credit cooperatives, which shall on-lend the fund to micro enterprises; 
and 
(c) Provision of guarantees to loans granted by the banks to qualified P3 beneficiaries. 
 
SEC. 6. Features of the "P3 Fund”. – The "P3 Fund" shall have the following features: 
(a) The components of the "P3 Fund” shall be: 
(1) Loan fund; and 
(2) Guarantee fund of not more than twenty-five percent (25%) of the total loan 
exposure; 
(b) The loanable amount for individual loans, and the interest rate to the conduits and 
to the end beneficiaries shall be set and regularly reviewed by the Micro, Small, and Medium 
Enterprise Development (MSMED) Council, provided that the interest rate shall be lower than 
the prevailing interest rate charged by the MFIs. The interest earnings shall accrue to the "P3 
Fund"; and  
(c) There shall be no collateral requirement from the P3 loan beneficiaries. 
 
SEC. 7. Policy Oversight Function. – The MSMED Council shall monitor the utilization 
and disbursements of the "P3 Fund”. It shall submit to the President of the Philippines and to 
Congress, through the Congressional Oversight Committee on Micro, Small and Medium 
Enterprise Development (COC-MSMED), a yearly report on the status of the "P3 Fund”. 
 
SEC. 8. Appropriations. – The amount necessary to carry out the provisions of this Act 
shall be charged against the appropriations released for the purpose under the General 
Appropriations Act for the SBCorp. Thereafter, such sums as may be necessary for the 
continued implementation of this Act shall be included in the annual General Appropriations 
Act. 
 
SEC. 9. Implementing Rules and Regulations. – Within sixty (60) days from the 
approval of this Act, the DTI, in consultation with the concerned agencies, shall formulate and 
promulgate the necessary rules and regulations to implement the provisions of this Act. The 
implementing rules and regulations issued pursuant to this section shall take effect thirty (30) 
days after its publication in at least two (2) national newspapers of general circulation. 
 
SEC. 10. Separability Clause. – If any part or section of this Act is declared 
unconstitutional, such declaration shall not affect in any manner other parts or sections hereof. 
 
SEC. 11. Repealing Clause. – All laws, decrees, proclamations, issuances, or 
ordinances that are contrary to or inconsistent with the provisions of this Act are hereby 
amended, repealed or modified accordingly. 
 


 
 
SEC.  12. Effectivity. – This Act shall take effect fifteen (15) days after its publication 
in the official gazette or in a newspaper of general circulation in the Philippines. 
 
 
Approved,