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Republie of the Philippines ml
HOUSE OF REPRESENTATIVES, = DATE March 21,2023
Quezon City TIME 2:35pm iy

NINETEENTH CONGRESS
First Regular Session

BY Rei
a a

So
asat INDEX

Introduced by Representative Joseph Gilbert F. Violago

HOUSE BILL Ni

EXPLANATORY NOTE,

The 1987 Constitution provides that the State recognizes the indispensable role
of the private sector, encourages private enterprise, and provides incentives to needed
investments. (Art. II, Sec. 20)

In his speech during the Go Negosyo's MSME Summit last August 26, 2022,
President Ferdinand R. Marcos, Jr. stressed that one of his administration's top priorities
is the “the revitalization of our MSMEs” and he reiterated the “government's full
commitment to work hand-in-hand with all stakeholders to make certain that MSMEs
are protected and provided with ample opportunities, not only to recover from these
extraordinary times but to grow and thrive in this modem age.”*

In the Philippines, there are about 1,080,810 business enterprises operating in the

- Based on the 2021 data from the Philippine Statistics Authority (PSA), of these,
1,076.279 (99.58%) are MSMEs and 4,531 (0.42%) are large enterprises. Micro
enterprises constitute 90.54% (978,612) of total establishments, followed by small
enterprises at 8.63% (93,230) and medium enterprises at 0.41% (4,437)2

When the COVID-19 pandemic hit the country in March 2020, these MSMEs
were not spared. According to a report of the Asian Development Bank, “one-fourth to
‘one-half of the sample MSMEs experienced a temporary closedown during this period
and one-third to two-thirds were facing a cash shortage at the time of the survey. Thus,
the impacts of the pandemic on the employment and the sustainability of business were
quite severe.”>

* Geducos, Ardy. “Marcos renews commitment to strengthen MSMEs”. Manilo Bulletin. 27 August 2022. Web.
‘Accessed on 10 March 2023. < https://mb.com.ph/2022/08/26/marcos-renews-commitment-to-strengthen-

msmes/>
* hutpsi//www.dti,gov.ph/resources/msme-statistcs/

 Sonobe, TA. Takeda, S. Yoshida, and H. . Truong, 2021, “The Impacts of the COVID-19 Pandemic on Micro,
‘Small, and Mediurn Enterprises in Asia and Their Digitalization Responses". ADBI Working Paper 1241. Tokyo:
‘Asian Development Bank institute. Available: https://www.adb.ore/publications/impacts-covid-19, pandemic
msme-asia-their-digitalizationresponses


This bill is relevant especially today, considering that the country is reeling from
the socio-economic impact of the COVID-19 pandemic. Therefore, there is a need to
strengthen, empower, and enhance the financing and other support programs for these
MSMEs.

Among the highlights of this bill include:

+ Mandating the National Government, its bureaus, offices and agencies to
allocate at least 10% of all its procurement opportunities for goods and
services to eligible MSMEs, in accordance with existing laws;

+ Providing duly registered micro and small enterprises a discount of at
least twenty percent (20%) on shipping and delivery fees for their
products and raw materials, as well as for mailing, freight and other
similar services provided by either public or private couriers;

+ Extension of the mandatory allocation of credit resources to micro, small
and medium enterprises to another ten (10) years;

© Mandating all lending institutions to allocate ten percent (10%) of their
total loan portfolio for MSMEs, but only a maximum of one percent (1%)
thereof shall be the allocation for medium enterprises;

‘+ Mandating all banks to provide access 10 deposit accounts, such as
savings, checking and debit accounts, to registered MSMEs as well as
financial technology to ensure their financial inclusion;

‘* Providing that all lenders shall report credit information and transactions
‘of MSMEs to a National Credit Registry.

Similar versions of this commendable bill were filed by Rep. Maximo Rodriguez,
Jr, Rep. Michael Romero, among others, in the 17 Congress. The same was approved
on Third and Final Reading, and was transmitted to the Senate; however, it was not
passed into law. Similar bills were again filed in the 18 Congress and was likewise
approved by the body. ‘The present proponent acknowledges the hard work and wisdom
of his predecessors.

In view of the foregoing, the urgent passage of this bill is eamestly sought.

Ji, VIOLAGO



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL No. _7741

Introduced by Representative Joseph Gilbert F. Violago

AN ACT
FURTHER PROMOTING ENTREPRENEURSHIP BY STRENGTHENING,
EMPOWERING, AND ENHANCING THE FINANCING AND OTHER
SUPPORT PROGRAMS FOR MICRO, SMALL AND MEDIUM
ENTERPRISES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO.
6977, AS AMENDED, OTHERWISE KNOWN AS THE “MAGNA CARTA
FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)”

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

SECTION 1. Scction 2 of Republic Act No. 6977, as amended, is hereby further
amended to read as follows:

“SEC. 2. Declaration of Policy. — Recognizing that MSMEs have the potential
[for] TO GENERATE more employment [generation] and SPUR economic
growth and therefore can help provide a self-suCicient industrial foundation for
the country, it is hereby declared the policy of the State to promote, support,
strengthen and encourage the growth and development of MSMEs in all
productive sectors of the economy particularly ruraV/agri-based,
MANUFACTURING, FINANCE AND SERVICES enterprises. To this end, the
State shall recognize the specific needs of the MSMEs and shall undertake to
promote entrepreneurship, support entrepreneurs, encourage the establishment of
MSMEs and ensure their continuing viability and growth and thereby attain
countryside industrialization by:

“Xxx”

SECTION 2. Section 4 of the same Act, as amended, is hereby further amended to read
as follows:

“SEC. 4. Eligibility for Government Assistance. ~'To qualify for assistance,
counseling, incentives and promotion under this Act, businesses falling under
the above definition must be:


“a) duly registered with the appropriate agencies as presently provided by
law: Provided, that in the case of micro enterprises as defined herein,
registration with the oLice of the municipal or city treasurer shall be deemed
su lcient compliance with this requirement;

“THE APPLICATION OF AN MSME FOR ANY PERMIT AND LICENSE
FROM ANY LOCAL GOVERNMENT UNIT, INCLUDING A
BARANGAY, SHALL BE AUTOMATICALLY — APPROVED
PROVISIONALLY, SUBJECT TO THE FINAL APPROVAL OF THE
APPLICATION AND THE ISSUANCE OF THE PERMIT OR LICENSE
APPLIED FOR.

“THE TOTAL COST FOR THE ISSUANCE OF ALL PERMITS,
LICENSES, CERTIFICATIONS, AND OTHER SIMILAR REQUIRED
DOCUMENTATION FOR THE CONDUCT OF BUSINESS FOR
REGISTERED MICRO ENTERPRISES SHALL NOT EXCEED FIVE
HUNDRED PESOS _(P500.00). FOR REGISTERED SMALL
ENTERPRISES, THE TOTAL COST SHALL NOT EXCEED FIVE
‘THOUSAND PESOS (P5,000.00) FOR A PERIOD OF FIVE (5) YEARS.

“b) one hundred percent (100%) owned, capitalized by Filipino citizens,
whether single proprietorship or partnership. If the enterprise is a juridical
entity, at least sixty percent (60%) of its capital or outstanding stocks must. be
‘owned by Filipino citizens;

ERK,

[Eligible MSMEs shall be entitled to a share of at least ten percent (10%) of
{otal procurement value of goods and services supplied to the Government, its
bureaus, oLices and agencies annually. THE NATIONAL GOVERNMENT, ITS
BUREAUS, OFFICES AND AGENCIES SHALL ALLOCATE AT LEAST
TEN PERCENT (10%) OF ALL ITS PROCUREMENT OPPORTUNITIES
FOR GOODS AND SERVICES TO ELIGIBLE MSMEs IN ACCORDANCE
WITH THE PROVISIONS OF REPUBLIC ACT NO. 9184, OTHERWISE
KNOWN AS THE ‘GOVERNMENT PROCUREMENT REFORM ACT’,
ANDITSIMPLEMENTING RULES AND REGULATIONS.

“The [Department of Budget and Management] GOVERNMENT
PROCUREMENT POLICY BOARD (GPPB) shall FORMULATE RULES FOR
‘THE EFFECTIVE IMPLEMENTATION OF THIS PROVISION AND monitor
the compliance of government agencies on the required procurement for MSMEs
and submit its report to the MSMED Council on a semestral basis and to the
Congress of the Philippines, through its appropriate committeesona yearly basis.

“DULY REGISTERED MICRO AND SMALL ENTERPRISES SHALL BE
ENTITLED TO A DISCOUNT OF ATLEAST TWENTY PERCENT (20%) ON


SHIPPING AND DELIVERY FEES FOR THEIR PRODUCTS AND RAW
MATERIALS, AS WELL AS FOR MAILING, FREIGHT AND OTHER
SIMILAR SERVICES PROVIDED BY EITHER PUBLIC OR PRIVATE
COURIERS.

“GOVERNMENT BUILDINGS, STRUCTURES AND OPEN AREAS,
INCLUDING PUBLIC MARKETS, WHETHER WET OR DRY, AIRPORTS,
SEA PORTS, FISH PORTS, PARKS, ZOOS, CONVENTION CENTERS,
ENTERTAINMENT CENTERS, TOURISM CENTERS, SCHOOLS, SCHOOL
CAMPUSES, AND OTHER SIMILAR STRUCTURES OR AREAS
SUITABLE FOR SELLING OR MARKETING, WHETHER PERMANENT
OR TEMPORARY, THAT CAN BE USED AS SELLING AREAS, SHALL
GIVE AN AUTHORIZED MSME STORE FREE SPACE MEASURING AT
LEAST ONEPERCENT (1%) OF THE TOTAL SPACEAVAILABLE THEREIN.

“PRIVATE MALLS, SUPERMARKETS, SHOPPING CENTERS,
COMMERCIAL SELLING ESTABLISHMENTS, STRUCTURES, OR
AREAS WITH A SELLING AREA, WHETHER PERMANENT OR
TEMPORARY, MEASURING AT LEAST FIVE THOUSAND SQUARE
METERS (5,000 SQM), INCLUDING COMMON AREAS, BUT
EXCLUDING PARKING SPACES AND DRIVEWAYS, SHALL GIVE FREE
‘SPACE OR AREA EQUIVALENT TO ONE HALF OF ONE PERCENT (0.5%)
OF THE SAID SELLING AREA FOR EVERY FIVE THOUSAND SQUARE.
METERS (5,000 SQM) OF SELLING AND COMMON SPACE, TO ANY
AUTHORIZED MSME STORE. AS USED IN THIS ACT, “FREE SPACE”
SHALL MEAN SPACE THAT MAY BE USED FOR SELLING PURPOSES
WITHOUT NEED FOR THE PAYMENT OF RENT, GOODWILL FEI
ROYALTIES, COMMISSION, PERCENTAGI
OTHER SIMILAR SCHEME.

S ON SALES, NOR ANY

“THE MSMED COUNCIL OF THE CONCERNED CITY, MUNICIPALITY
OR BARANGAY SHALL APPROVE THE MSME STORE THAT WILL BE
GIVEN FREE SPACE, UPON THE RECOMMENDATION OF — THE
LOCAL OFFICE OF THEDEPARTMENT OF TRADE AND INDUSTRY. THE
FREE SPACE ALLOCATED FOR THE MSME STORE SHALL BE GIVEN IN
‘THE FOLLOWING ORDER OF PREFERENCE:

1. ONE TOWN ONE PRODUCT (OTOP) STORE OR GO LOKAL!
STORE OF THE DEPARTMENT OF TRADEAND INDUSTRY;

2. MSME KUMUNIDARAN PRODUKTO AT RESONABLENG
SERBISYO STORE (OR “KUMPARE STORE”);OR

3. ALOCALMICROORSMALL ENTERPRISE STORE.

“ONCE AN MSME STORE IS IN PLACE, REMOVAL OR REPLACEMENT


SHALL NOT BE ALLOWED EXCEPT FOR VALID CAUSE AND AFTER
DUE PROCESS.

“THE APPROVAL AND THE REMOVAL OF THE MSME STORE THAT
WILL BE GIVEN FREE SPACE SHALL BE REPORTED BY THE MSMED.
COUNCIL OF THE CONCERNED CITY, MUNICIPALITY OR BARANGAY
TO THE CONGRESSIONAL OVERSIGHT COMMITTEE ON MICRO,
SMALL AND MEDIUM ENTERPRISE DEVELOPMENT.

“PRIVATE MALLS SHALL ALSO ALLOCATE TWENTY PERCENT (20%)
OF THEIR TOTAL RENTABLE SPACE TO LOCAL MICRO AND SMALL,
ENTERPRISESWHICH SHALL BE EXTENDED A TWENTY PERCENT
(20%) DISCOUNT ON RENTAL RATES. PRIVATE MALLS SHALL NOT
CHARGE ROYALTY CHARGES, GOODWILL CHARGES, COMMISSION
CHARGES, PERCENTAGE OF SALES, AND OTHER SIMILAR SCHEMES
UPON THE MSMEs.”

SECTION 3. Section 5 of the same Act, as amended, is hereby further amended to read

as follows:

“SEC. 5. Guiding Principles. — To set the pace for MSME development, the State
shall be guided by the following principles:

“a) Minimal set of rules and simplification of procedures and requirements. All
government agencies having to do with MICRO AND small enterprises shall
pursue the principles of minimum regulation to ensure stability of rules and to
encourage entrepreneurial spirit among the citizenry, The agencies shall see to it
that procedural rules and requirements, within their respective oCices in
coordination with other agencies, are minimized in the act of registration,
availment of financing and accessing other government services and assistance,

“b) Role of the private sector. In order to hasten growth and expansion of
MICRO, small and medium enterprises, the private sector throughout the country
shall be encouraged to assist in the eClective implementation of this Act by
participating in goverament programs for MICRO, small and medium enterprises
strictly in accordance with the law, and consistent with the attainment of the
purposes hereof. To encourage private sector participation, the Council, in
consultation with the concemed sector, may recommend simplified procedure and
localized incentives to MICRO AND small enterprises. The Government shall
encourage the organization and establishment of MICRO, small and medium
enterprise industry associations at the local and regional levels preferably unified
undera national federation/association.

“c) Coordination of government eClorts. Government eCiorts shall be
coordinated to achieve coherence in objectives. All appropriate oDees,
particularly those under the Departments of Trade and Industry, Finance, Budget


and Management, Agriculture, Agrarian Reform, Environment and Natural
Resources, Labor and Employment, Transportation [and Communications],
INFORMATION AND COMMUNICATIONS ‘TECHNOLOGY, Public Works
and Highways, Science and Technology, Interior and Local Government, and
‘Tourismas well as the National Economic and Development Authority, Philippine
Information Agency, SECURITIES AND EXCHANGE COMMISSION and the
Bangko Sentral ng Pilipinas, through their national, regional and provincial
“lees shall, to the best of their eC orts and in coordination with local government
units, provide the necessary support and assistance to MSMEs. THE
DEPARTMENT OF TRADE AND INDUSTRY SHALL BE THE LEAD
AGENCY THEREFOR.

“xxx”

SECTION 4. Section 6 of the same Act, as amended, is hereby further amended to read
follows:

“SEC. 6. Micro, Small and Medium Enterprises Development Plan (MSMEDP).
~ The President OF THE PHILIPPINES shall approve a six-year micro, small
and medium enterprises development plan prepared by the Department of Trade
and Industry (DTI) which shall form part of the [Medium Term] Philippine
Development Plan ([MTJPDP). It shall be formulated in consultation with the
private sector, validated and updated semestrally. Such plan shall include a
component ona micro credit financing scheme.”

SECTION 5. Section 7 of the same Act, as amended, is hereby further amended to read
follows:

“SEC. 7. Micro, Small and Medium Enterprise Development (MSMED) Council.
~ The cxisting Small and Medium Enterprise Development Council, which was
created by Republic Act No. 6977, as amended [by Republic Act No. 8289], shall
be strengthened to eLlectively spur the growth and development of MSMEs
throughout the country, and to carry out the policy declared in this Act and shall
now be known as the Micro, Small and Medium Enterprise Development
(MSMED) Council. The Council shall beattached tothe Department of Trade and
Industry and shall be constituted within sixty (60) days after the approvalof this
Act.

“The Council shall be the primary agency responsible for the promotion, growth
and development of MICRO, small and medium enterprises inthe country by way
of facilitating and closely coordinating national eLiorts to promote the viability
and growth of MICRO, small and medium enterprises, including assisting
relevant agencies in the tapping of local and foreign funds for MICRO, small and
medium enterprise development, as well as promoting the use of existing
programs, as well as seeking ways to maximize the use of our labor resources.”

SECTION 6. Section 7-A of the same Act, as amended, is hereby further amended to
read follows:


“SEC. 7-A. Composition of the Micro, Small and Medium Enterprises
Development (MSMED) Council. ~ The members of the Council shall be the
following:
“(@) TheSecretary of Tradeand Industry as Chair;
“(b) The Secretary of Agriculture;
“(©) The Secretary of the Interior and Local Government; “
(D)  THESECRETARY OF FINANCE;
“[(@)] (E) Three (3) representatives from the MSME sector, [to represent
Luzon, Visayas and Mindanao, with at least one (1) representative from the
microenterprise sector] TO BE DESIGNATED BY A NATIONAL
ORGANIZATION REPRESENTING AND DOMINATED BY MSMEs;
AND

“[(@) One (1) representative from the women sector designated by the
Philippine Commission on Women;]

“{(f) One (1) representative from the youth sector designated by the
National Youth Commission; and]

“{(g)] (F) The[{Chairman]PRESIDENT of THE Small Business Corporation.

“A. Advisory Unit. There shall be an Advisory Unit to the Council, which shall
consist of the following:

“@) The Secretary of Science and Technology;
“(b) The Governor of the Bangko Sentral ng Pilipinas;

“(C) THE COMMISSIONER OF THE SECURITIES AND EXCHANGE
COMMISSION;

“{(@](@) The President of the Land Bank of the Philippin

“((@)](E) The President of the Development Bank of the Philippines;

“{()|(F) ‘The Director General of the National Economic and
Development Authority;

“@ THE EXECUTIVE DIRECTOR OF THE COOPERATIVE
DEVELOPMENT AUTHORITY;


@ A_ REPRESENTATIVE OF A NATIONAL ORGANIZATION
REPRESENTING AND DOMINATED BY MSMEs:

“[@] @ One (1) representative from the labor sector, to be nominated by
accredited labor groups;

“((g)] () A representative from the private banking sector to serve [altematively]
ALTERNATELY between the [c|Chamber of [t]Thrift [b]Banks, and the Rural
Banker's Association of the Philippines (RBAP);

“{(h)] (K) A representative of the microfinance nongovemment organizations
(NGOs), DESIGNATED BY THE MICROFINANCE NGO REGULATORY
COUNCIL;

“{()] (L) A representative of the University of the Philippines-Institute for Small
Scale Industries (UP-ISSD;[and]

“[@)] (M) The President of the Credit Information Corporation{.];

“(N) ONE (1) REPRESENTATIVE FROM THE WOMEN SECTOR
DESIGNATED BY THE PHILIPPINE COMMISSION ON WOMEN:
“(O) ONE (1) REPI TATIVE FROM THE YOUTH SECTOR
DESIGNATED BY THE NATIONAL YOUTH COMMISSION; AND

“(P) A REPRESENTATIVE FROM NONSTOCK SAVINGS AND LOAN
ASSOCIATIONS DESIGNATED BY THE ALLIANCE OF NON-STOCK
SAVINGS AND LOAN INSTITUTIONS, INC.(ANSLD.

Sonn"

SECTION 7. Section 7-B of the same Act, as amended, is hereby further amended to
read as follows:

“SEC. 7-B. Powers and Functions.

A. The MSMED Council shall have the following powers, duties and functions:
“xxx

“d) To review the existing policies of government agencies that would aCTect the
growth and development of MSMEs and recommend changes to the President
and Congress through the Committee on Economie ALairs of the Senate and the
Committee on [Small Business and Entrepreneurship] MICRO, SMALL AND
MEDIUM ENTERPRISE Development of the House of Representatives,
whenever deemed necessary. This shall include eTlorts to simplify rules and
regulations, as well as review of the applicability and relevance of procedural and
documentary requirements in the registration, financing, and other activities
relevant to MSMBstheresultshall be included intheannual report to besubmitted



to Congress;
Sons

“h) To promote the productivity and viability of MSMEs IN DIT’S TOP
PRIORITY INDUSTRIES FOR DEVELOPMENT by way of directing [and/Jor
assisting relevant government agencies and institutions at the national, regional
and provincial levels towards the:

XXX;
“12) Through appropriate government agencies:

“XxX:

“f) Set-up new MSME NEGOSYO centers and revitalize already established
MSME NEGOSYO centers to provide MSMEs in the regions easier access to

services such as the following:
ome”

“B. ADDITIONAL FUNCTIONS OF THE MSMED COU! - AS
PROVIDED FOR IN S$ (ON 10 OF REPUBLIC ACT NO. 10644,
OTHERWISE KNOWN AS THE “GO NEGOSYO ACT’,THE MSMED
COUNCIL SHALL HAVE THE FOLLOWING ADDITIONAL FUNCTIONS:

“(A) COORDINATING AND OVERSIGHT BODY FOR THE MSME
NEGOSYO CENTER. — THE MSMED COUNCIL, THROUGH THE DTI,
SHALL ACT AS THE COORDINATING AND SUPERVISING BODY FOR
ALL THE AGENCIES INVOLVED IN THE ESTABLISHMENT AND.
OPERATION OF THE MSME NEGOSYO CENTERS. FURTHER, THE.
MSMED COUNCIL SHALL MONITOR AND ASSESS THE PROGRESS OF
THE MSME NEGOSYO CENTERS, WHICH SHALL BE INCLUDED IN ITS
ANNUAL REPORT SUBMITTED TO THECONGRESS;

“(B) PROVISION OF A COMPLIANCE GUIDE. — FOR EACH RULE OR
GROUP OF RELATED RULES ISSUED BY ANY GOVERNMENT AGENCY
FOR COMPLIANCE BY MSMES, THE COUNCIL SHALL PUBLISH
COMPLIANCE GUIDELINES WHICH SHALL BE WRITTEN IN PLAIN
LANGUAGE OR IN THE LOCAL DIALECT, IF NECESSARY.

“THE COUNCIL SHALL PREPARE SEPARATE COMPLIANCE GUIDES
COVERING GROUPS OR CLASSES OF SIMILARLY AFFECTED MSMES.
AND SHALL COOPERATE WITH INDUSTRY ASSOCIATIONS TO
DEVELOP AND DISTRIBUTE SUCH COMPLIANCE GUIDES. THE
PUBLICATION OF EACH COMPLIANCE GUIDE SHALL INCLUDE THE
POSTING OF THE GUIDE IN A CONSPICUOUS LOCATION ON THE
WEBSITE OF THE AGENCY, AND DISTRIBUTION OF THE GUIDE TO



KNOWN INDUSTRY CONTACTS, SUCH AS SMALL ENTITIES,
ASSOCIATIONS OR INDUSTRY LEADERS AFFECTED BY THE RULE.

THE ISSUING GOVERNMENT AGENCY SHALL PUBLISH AND
DISSEMINATE THE COMPLIANCE RULES WITHIN NINETY (90) DAYS
FROM THE DATE OF ISSUANCE; “(C) CONDUCT OF RESEARCH ON
WOMEN ENTREPRENEURSHIP. — THE COUNCIL SHALL CONDUCT
RESEARCH TO SUPPORT WOMEN ENTREPRENEURSHIP
INCLUDING — ENTREPRENEURIAL BEHAVIOR, _ BARRIERS,
PARTICIPATION AND CESSATION RATES, DISCRIMINATORY
PRACTICES AND CONTRIBUTION TO THE NATIONAL ECONOMY AND.
GROWTH;

“(D) POLICY FORMULATION ON WOMEN ENTREPRENEURSHIP. —
THE COUNCIL SHALL PROVIDE POLICY DIRECTION TOWARDS
RECOGNIZING WOMEN’S PROPENSITY AND TALENT IN
ENTREPRENEURSHIP AS WELL AS ESTABLISH LINKAGES THAT WILL,
ENABLE MORE OPPORTUNITIES FOR WOMEN TO ENGAGE IN
ENTREPRENEURSHIP; AND

“(E) DEVELOPMENT OF ENTREPRENEURIAL EDUCATION AND
TRAINING. — THE MSMED COUNCIL SHALL DEVELOP, IN
COORDINATION WITH THE DEPARTMENT OF EDUCATION,
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY,
AND COMMISSION ON HIGHER EDUCATION, A COURSE
CURRICULUM OR TRAINING PROGRAM IN ENTREPRENEURSHIP
THAT WILL PROMOTE ENTREPRENEURIAL CULTURE AND
COMPETENCE. ENTREPRENEURSHIP SHALL BE INTEGRATED IN THE
CURRICULUM OF EDUCATIONAL AND TRAINING INSTITUTIONS IN
ALL LEVELS.”

SECTION 8. A new subsection is hereby inserted after Section 7-B of the same Act, as
amended, and numbered as Section 7-C to read as follows:

“SEC. 7-C. CITY, MUNICIPALITY, AND BARANGAY MSMED COUNCIL. -
‘THERE SHALL BE CREATED A MSMED COUNCIL IN EVERY LOCAL
GOVERNMENT UNIT WHICH SHALL HAVE THE AUTHORITY TO
PROPOSE POLICIES THAT ARE GEARED TO ASSIST MSMEs IN THE
AREAS OF PRODUCTIVITY ENHANCEMENT, MARKETING,
ACHIEVING SUSTAINABILITY BY EXTENDING CREDIT TO
CUSTOMERS, AND IMPLEMENTING FFFICIENT LOAN COLLECTION
SYSTEMS, AMONG OTHER STRATEGIES.

“THE LOCAL MSMED COUNCIL, IN THE CASE OF A CITY OR
MUNICIPALITY, SHALL BE COMPOSED OF THE CITYOR MUNICIPAL
BUSINESS PERMIT AND LICENSING OFFICER AS CHAIRPERSON, THE


PRESIDENT OF THE ASSOCIATION OF BARANGAY CAPTAINS, THE
PRESIDENT OF THE SANGGUINIANG KABATAAN FEDERATION, THE
TOURISM OFFICER, AND THE CITY ORMUNICIPAL AGRICULTURIST
OR THE CITY PLANNING OFFICER.

“THE BARANGAY MSMED COUNCIL SHALL BE COMPOSED OF THE
PUNONG BARANGAY AS CHAIRPERSON, THE SANGGUNIANG
KABATAAN CHAIRPERSON, A REPRESENTATIVE OF THE LADIES’
BRIGADE OR LADIES’ SECTOR, A REPRESENTATIVE OF THE
BARANGAY PUBLIC SAFETY OFFICE, AND A REPRESENTATIVE OF
THE SENIORCITIZENS.

“TO ENSURE THEIR CONTINUED FINANCIAL VIABILITY, THE CITY,
MUNICIPAL, AND BARANGAY MSMED COUNCILS SHALL
COORDINATE AND FORMULATE MEASURES TO ENSURE
OPERATIONAL AND FINANCIAL VIABILITY WITHIN THEIR
TERRITORIAL JURISDICTION, TAKING INTO CONSIDERATION THE
RELEVANTFACTORS AFFECTING THE CAPACITIES OF THE MSMEs.”

SECTION 9. Section 8 of the same Act, as amended, is hereby further amended to read
as follows:

“SEC. 8. Designation of the Bureau of Micro, Small and Medium Enterprise
Development as Council Secretariat. — x xx:

““1) to prepare, in coordination with local government units and/or associations
of local government oCicials, and recommend annual as well as medium-term
MICRO, small and medium enterprise development plans for approval of the
Council;

my

*3) to assist the Council in coordinating and monitoring MICRO, small and
medium enterprise policies and programs and activities ofall governmentagencies
with respect to MICRO, small and medium enterprises;

“4) to prepare, collate and integrate all inputs to the Council's yearly report on
the status of MICRO, small and medium enterprises in the country;
“Xxx.”

SECTION 10. Section 11 of the same Act, as amended, is hereby further amended to
read as follows:

“SEC. 11. Creation of THE Small Business [Guarantee and Finance]
Corporation. ~ Thereis hereby created a body corporate to be known as the Small
Business [Guarantee and Finance] Corporation, hereinafter referred to as the


[Small Business Corporation (SB Corporation)] SB CORPORATION, which
shall be charged with the primary responsibility of implementing comprehensive
policies and programs to assist MSMEs in ali areas, including but not limited to
finance and information services, training and marketing.”

SECTION 11. Section 11-A of the same Act, as amended, is hereby further amended
to read as follows:

“SEC. 11-A. Composition of the Board of Directors and its Powers. ~The
SB Corporation [corporate powers shall be vested on] SHALL HAVE a Board
of Directors composed of [eleven (11)] THIRTEEN (13) members which shall
include the following:

“a) The Secretary of Trade and Industry, WHO SHALL ACT AS
CHAIRPERSON OF THE BOARD UNTIL SUCH TIME THAT THE
PRESIDENT OF THE PHILIPPINES SHALL HAVE APPOINTED THE
CHAIRPERSON OF THE BOARD FROM AMONG ITS MEMBERS;

“b) The Secretary of Finance;

“C) THE PRESIDENT OF THE GOVERNMENT SERVICE INSURANCE,

SYSTEM (GSIS);

“D) THE PRESIDENT OF THE SOCIAL

“[c] B) A private sector representative to be appointed by the President OF THE
PHILIPPINES upon the recommendation of the MSMED Council;

“{d] F) Seven (7) representatives of the SB Corporation common. stock
shareholders who shall be elected based on proportional distribution, in
accordance with Section [24] 23 of the REVISED Corporation Code; and

*[c)]G)The president of the SB Corporation as ex-oCicio member and to serve as
vice chairman of the Board.

“The President OF THE PHILIPPINES shall appoint the [chairman]
CHAIRPERSON of the Board from among its members.

“All members of the Board so appointed, except for the ex-oCicio members, shall
serve for a term of three (3) years [without reappointment] AND MAY BE
REAPPOINTED TO ANOTHER TERM UNLESS EARLIER REVOKED. IF
THE TERM OF THE INCUMBENT MEMBER HAS EXPIRED, THE
MEMBER SHALL CONTINUE TO FUNCTION IN A HOLDOVER
CAPACITY UNTIL A REPLACEMENT HAS BEEN APPOINTED AND
QUALIFIED. [The]ANY person [so] appointed to replace a member who has
resigned, died, or been removed for cause shall serve only forthe unexpired portion



ofthe term.

“The Board of Directors shall have, among others, the following specific powers
and authorities:

“xxx and

“) [Notwithstanding the provisions of Republic Act No. 6758 and Compensation
Circular No. 10, Series of 1989 issued by the Department of Budget and
Management, the Board shall have the authority to pJProvide for the
organizational structure, [and] staCIng pattern fofSB Corporation and to extend
to the employees and personnel thereof salaries, allowances and fringe benefits
similar to those extended to and currently enjoyed by employees and personnel of
other government financial institutions.| AND COMPENSATION OF
EMPLOYEES AND PERSONNEL OF THE SB CORPORATION, FOR
SUBMISSION TO THE GOVERNANCE COMMISSION FOR GOCCs.”

SECTION 12. Section 11-B of the same Act, as amended, is hereby further amended
to read as follows:

“SEC. 11-B. Corporate Structure and Powers.—“A. The SB Corporation shall:
“Xxx.
“B. For this purpose, the SB Corporation [subject to compliance with the rules
and regulations to be issued by the Bangko Sentral ng Pilipinas (BSP) and the
Securitiesand Exchange Commission,] shall have the following functions and
duties:

“a) Source and adopt development initiatives for globally competitive MSMES
in finance and business technologies;

“b) [To] [e]Extend all forms of financial assistance, EXCEPT GRANTS AND
SUBSIDIES, to eligible MSMEs|.|, AND NOT TO PRECLUDE RETAIL
LENDING IN AREAS WHERE PRIVATE BANKS ARE NOT ABLE TO
SERVE, SUBJECT TO CONSULTATION WITH PRIVATE BANKS. SB
Corporation may also engage in wholesale lending. The SB Corporation shall be
given two (2) years from the e(lectivity of this Act to comply with this
requirement;

“c)[Guarantee loans obtained by qualified MSMEs under such terms and
conditions adopted by the SB Corporation Board of Directors;] ESTABLISH AN
ENTERPRISE REHABILITATION FUND FOR CALAMITY-STRICKEN
MSMEs NOT TO EXCEED FIVE HUNDRED MILLION PESOS
(P500,000,000.00) AS PART OF SB CORPORATION'S CAPITALIZATION
BY THE NATIONAL GOVERNMENT;

“xxx;


“D Apply for, receive and accept grants and donations from sources within and
outside the country; [and]

“g) Hold, own, purchase, acquire, sell, mortgage, dispose or otherwise invest
or re-invest in stocks, bonds, treasury bills, debentures, securities and similar
forms of indebtedness of the government, its agencies and instrumentalities orany
government financial institution[.J; AND

“H) SUBMIT AN ANNUAL REPORT TO THE MSMED COUNCIL, THE
CONGRESS OF THE PHILIPPINES AND THE GOVERNANCE
COMMISSION FOR GOCCs ON THE PERFORMANCE AND FINANCIAL,
CONDITION OF THE CORPORATION.

“THE SB CORPORATION SHALL BE EXEMPT FROM SECURING PRIOR
BSP AUTHORIZATION FOR ENGAGING IN QUASI-BANKING
ACTIVITIES AND SHALL NOT BE SUBJECT TO BSP SUPERVISION AND
REGULATION FOR SUCH ACTIVITIES.”

SECTION 13. A new subsection is hereby inserted after Section 11-B of the same Act,
as amended, and numbered as Section 11-C to read as follows:

“SEC. 11-C. STRATEGIC MANAGEMENT OF THE SB CORPORATION. —
THE BOARD OF THE SB CORPORATION, THROUGH ITS
CHAIRPERSON, SHALL BE FULLY RESPONSIBLE AND
ACCOUNTABLE FOR THE PERFORMANCE OF THE CORPORATION'S.
MANDATE. TO ENSURE THIS, THE BOARD SHALL BE CONSTITUTED
AS A MANAGING BOARD, LED BY ITS CHAIRPERSON, TO
CONCEPTUALIZE THE STRATEGIC PLANS AND POLICIES OF THE
CORPORATION. “THE SB CORPORATION SHALL ADOPT A BALANCED
SCORECARD MANAGEMENTAPPROACH, SUBJECT TO THE REVIEW
AND APPROVAL OF THE GOVERNANCE COMMISSION FOR GOCCs,
TO ENABLE IT TO MANAGE ITS FINANCIAL PERFORMANCE WHILE
PURSUING ITS PUBLIC POLICY OBJECTIVES OF SUPPORTING MICRO,
SMALLAND MEDIUMENTERPRISES DEVELOPMENT.”

SECTION 14. Section 12 of the same Act, as amended, is hereby further amended to
read as follows:

“SEC. 12. Capitalization and Funding of the SB Corporation. — The SB
Corporation shall have an authorized capital stock of Ten billion pesos
(P10,000,000,000.00). The initial capital of One billion pesos
(P1,000,000,000.00) shall be established from a pool of funds to be contributed
in the form of equity investments in common stock by the Land Bank of the
Philippines (LBP), the Development Bank of the Philippines (DBP), in the
amount of Two hundred million pesos (P200,000,000.00) each. The Social


Security System (SSS) and the Government Service Insurance System (GSIS)
shall also set aside Two hundred million pesos (P200,000,000.00) each for the SB
Corporation. Authorized capital stock of the [s]Small _[b]Business
{c}Corporation shall be divided into 80,000,000 common shares and20,000,000
preferred shares with a par value of One hundred pesos (P100.00) per share:
Provided, That the common shares which have been issued, including those
issued against the assets of the KKK Guaranty Fund consolidated under the
[s}Small [b]Business [c] Corporation by virtue of Executive Order No. 233, Series
of 2000 and Executive Order No. 19, Series of 2001 and including those already
subscribed, shall form part of the capitalization of the corporation: Provided,
further, That holders of preferred shares issued under Republic Act No. 6977,as
amended, shall have the option to convert the same into common shares.
Additional equity funding shall come from trust placements of excess and unused
funds of existing government agencies, bilateral and multilateral oLicial
development assistance funds, subscriptions from government owned or
controlled corporations AND THE NATIONAL GOVERNMENTTHROUGH
THE DEPARTMENT OF BUDGET AND MANAGEMENT — (DBM), and
investments of private financial institutions and corporations: Provided, finally,
That any investment from the private sector shall only be in the form of preferred
shares,

“[To allow for capital build-up, SB Corporation shall be given a five (5) year grace
period on dividend commitments beginning on the date of eLiectivity of this
amendment. Thereafter, it] THE SB CORPORATION may [only] declare as
dividend not more than thirty percent (30%) ofits netincome and the rest withheld
asretained earnings.”

SECTION 15. Section 13 of the same Act, as amended, is hereby deleted:
“{SEC. 13. The SB Corporation shall be subject to the supervision and

examination of the Bangko Sentral ng Pilipinas taking into consideration its
developmental objectives.”]

SECTION 16. Section 14 of the same Act, as amended, is hereby renumbered as
Section 13, and further amended to read as follows:

“SEC. [14]13. Venture Capital and Micro Finance Trust Fund. — The SB
Corporation may set aside an amount of money to encourage the setting up of a
venture capital and micro finance trust fund for the purpose of promoting
AVAILABLE business opportunities [available] to THE MSME sector. The
Venture Capital Fund shall be used mainly for venture capital finance especially
in technology-oriented industries. The micro finance trust fund shall be used to
provide collateral-free fixed and working capital loans to micro and small
enterprises run by those emerging out of poverty. THE INITIAL AMOUNT OF
ATLEAST TEN PERCENT (10%) OF THE EQUITY CONTRIBUTION OF
THE NATIONAL GOVERNMENT TO THE CAPITALIZATION OF THE



SMALL BUSINESS CORPORATION, NOT TO EXCEED FIVE HUNDRED
MILLION PESOS (P500,000,000.00), SHALL BE APPROPRIATED TO
FUND THE VENTURE CAPITAL AND MICRO FINANCE TRUST FUND,

SECTION 17. Section 15 of the same Act, as amended, is hereby renumbered as
Section 14, and further amended to read as follows:

“SEC. [15]14. Mandatory Allocation of Credit Resources to Micro, Small and
Medium Enterprises. — For the period of ANOTHER ten (10) years from the date
of the e-lectivity of this amendatory Act, all lending institutions [as defined under
Bangko Sentral ng Pilipinas rules}, whether public or private, shall set aside at
least [cight percent (8%) for microand small enterprises and at least two percent
(2%) for medium enterprises] TEN PERCENT (10%) of their total loan portfolio
based on their balance sheet as of the end of the previous quarter FOR MICRO,
SMALL AND MEDIUM ENTERPRISES, and make it available for MSME
credit as hereincontemplated: PROVIDED, THAT A MAXIMUM OF ONE
PERCENT (1%) THEREOF SHALL BE THE ALLOCATION FOR MEDIUM
ENTERPRISES.

“Compliance of this provision shall be:
“a) actual extension of loans to eligible MSMEs; or “x x x; or

“f) [subscribe] SUBSCRIPTION/purchase of liability instruments as may be
oLered by the SB Corporation, THE SAME SHALL NOT BE DEEMED AS
QUASI-BANKING OPERATIONS, AND SHALL NOT REQUIRE A QUASI-
BANKING LICENSE FROM THE BSP; OR

“(G) EXTENSION OF LOANS TO MSME VALUE CHAIN ACTORS WHO
ALLOW MSMEs TO PARTICIPATE IN ORGANIZED OR FORMAL VALUE
CHAINS. VALUE CHAIN ACTORS INCLUDE, AMONG OTHERS,
TRADERS, SUPPLIERS, PROCESSORS, AGGREGATORS WHO
CONDUCT LINKED SEQUENCE OF VALUE ADDING ACTIVITIES
INVOLVED IN BRINGING A PRODUCT TO FINAL CONSUMERS.

“The Bangko Sentral ng Pilipinas AND THE SECURITIES AND EXCHANGE.
COMMISSION, IN CONSULTATION WITH THE MSMED COUNCIL
AND THE DEPARTMENT OF TRADE AND INDUSTRY, shall formulate
rules for the eClective implementation of this provision: Provided, That the
purchase of government notes, securities and other negotiable instruments shall
not be deemed compliance with the foregoing provisions: Provided, further, That
the Bangko Sentral ng Pilipinas AND THE SECURITIES AND EXCHANGE
COMMISSION, IN CONSULTATION WITH ALL STAKEHOLDERS, shall
establish [an] A MEANINGFUL incentive [program] SYSTEM to encourage
[lending to micro, small and medium industries beyond the mandatory credit
allocation to said enterprises,] COMPLIANCE WITH THIS PROVISION, such



as possible reduction in bank’s reserve requirement{.]:_ PROVIDED, FINALLY,
‘THAT THE BANGKO SENTRAL NG PILIPINASAND THE SECURITIES AND.
EXCHANGE COMMISSION SHALLALIGN THEIRREGULATIONS ON
THE PENALTIES FOR BANKS AND OTHER ENTITIES, FOR
NONCOMPLIANCE WITH THE PROVISION FOR -MANDATORY
LENDING.

“The MSMED Council shall set up the appropriate systems to monitor all. loan
applications of MSMEs in order to account for the absorptive capacity of the
MSME sector. EACH LENDING INSTITUTION SHALL DESIGNATE A
CHIEF COMPLIANCE OFFICER WHO WILL PREPARE AND SIGN THE
REPORT ON COMPLIANCE AND NONCOMPLIANCE WITH THE
MANDATORY CREDIT ALLOCATION, FOR SUBMISSION TO THE
BANGKO SENTRAL NG PILIPINASIN THE CASE OF BANKS, AND THE
SECURITIES AND EXCHANGE COMMISSION IN THE CASE OF NON-
BANK FINANCIAL INTERMEDIARIES. The Bangko Sentral ng Pilipinas IN
THE CASE OF BANKS, AND THE SECURITIES AND EXCHANGE
COMMISSION IN THE CASE OF NON-BANK FINANCIAL
INTERMEDIARIES, shall furnish to the MSMED Council on a quarterly basis
comprehensive reports on the [bank’s] LENDING ENTITY’S compliance{,]
AND noncompliance [and penalties of] WITH the above provisions on the
mandatory credit allocation for MSMEs[.], AND SHALL SUBMIT AN
ANNUAL REPORT, SIGNED BY AN OFFICER WITH THE RANK OF AT
LEAST A MANAGING DIRECTOR, ON THE AMOUNTS OF THE
PENALTIES FOR NONCOMPLIANCE WITH THE MANDATORY
LENDING PROVISION OF THIS ACT.

“ALL BANKS SHALL PROVIDE A\
SUCH AS SAVINGS, CHECKING AND DEBIT AC
REGISTERED MSMEs. FINANCIAL TECHNOLOGY SHALL BE
PROVIDED TO MSMEs TOENSURE THEIR FINANCIALINCLUSION.

“ALL LENDERS SHALL REPORT CREDIT INFORMATION AND
TRANSACTIONS OF MSMEs TO A NATIONAL CREDIT REGISTRY TO
MONITOR PROPER COMPLIANCE AND EFFICIENTIMPLEMENTATION.

“FOR EFFICIENT IMPLEMENTATION AND OPERATION,
COOPERATIVES EXCEPT COOPERATIVE BANKS AND INSURANCE
COOPERATIVESSHALL BE UNDER THE SOLE SUPERVISION AND
EXAMINATION OF THE COOPERATIVE DEVELOPMENT AUTHORITY
(CDA); ALL OTHER FINANCIAL ENTITIES, CORPORATIONS AND
FINANCIAL _INTERMEDIARII SUCH AS NON-GOVERNMENT
ORGANIZATIONS, FINANCING COMPANIES, NON-STOCK SAVINGS
AND LOAN ASSOCIATIONS, MICROFINANCE NON-GOVERNMENT
ORGANIZATIONS,AND LENDING INVESTORS SHALL BE UNDER THE.
SECURITIES AND EXCHANGE COMMISSION (SEC); BANKS SHALL BE



UNDER THE BANGKO SENTRAL NG PILIPINAS (BSP); AND INSURANCE.
COMPANIES SHALL BE UNDER THE INSURANCE COMMISSION (IC).

FOR CLARITY, COOPERATIVE BANKS SHALL BE UNDER THE
SUPERVISION AND EXAMINATION OF THE CDA AND BSP; WHILE
INSURANCE COOPERATIVES SHALL BE UNDER THE: SUPERVISION
AND EXAMINATION OF THE CDA AND INSURANCE COMMISSION(IC).

“Lending institutions which are not qualified to acquire or hold lands of the public
domain in the Philippines shall be permitted to bid and take part in sales of
‘mortgaged real property in case of judicial or extra-judicial foreclosure, as well
asavailofreceivership, enforcement and other proceedings, solely upon default of
a borrower, and for a period not exceeding five (5) years from actual possession:
Provided, That in no event shall title to the property be transferred to such
Jending institution. If the lending institution is the winning bidder, it may, during
said five (5) year period, transfer its rights to a qualified Philippine national,
without prejudice to a borrower's rights under applicable laws.”

SECTION 18. Section 16 and 17 of the same Act, as amended, is hereby renumbered
as Sections 15 and 16, respectively to read as follows:

“SEC. [16]15. Micro, Small, and Medium Enterprise Week.—x xx.”
“SEC. [17]16. Presidential Awards for Outstanding MSME.—x xx."

SECTION 19. Section 18 of the same Act, as amended, is hereby renumbered as
Section 17, and further amended to read as follows:

“SEC. [18]17. Congressional Oversight Committee. — To monitor and oversee
the implementation of this Act, there shall be a Congressional Oversight
Committee on Micro, Small and Medium Enterprise Development (COC-
MSMED) composed of the chairpersons of the Senate Committee on Economic
ACairs and the House Committee on [Small Business and Entrepreneurship
Development] MICRO, SMALL AND MEDIUM ENTERPRISE
DEVELOPMENT as chairperson and co-chairperson, respectively: xxx.”

SECTION 20. Section 19 of the same Act, as amended, is hereby renumbered as
Section 18, and further amended to read as follows:

“SEC. [19]18. Penal Clause.—The Bangko Sentral Ng Pilipinas IN THE CASE
OF BANKS, AND THE SECURITIES AND EXCHANGE.
COMMISSION IN THE CA‘ OF NON-BANK FINANCIAL
INTERMEDIARIES, shall impose administrative sanctions and other penalties
on the lending institutions for non[-Jcompliance with THE provisions of this Act
[including a fine of not less than Five hundred thousand pesos (P500,000.00)].
THE MINIMUM AMOUNT FOR THE PENALTY FOR NONCOMPLIANCE.
IS FIVE HUNDRED THOUSAND PESOS (P500,000.00) AND THE



MAXIMUM PENALTY IS FIVE MILLION PESOS (PS,000,000.00), IN
PROPORTION TO THE BANK’S OR OTHER ENTITY'S LEVEL OF
COMPLIANCE: PROVIDED, THAT IN CASE OF FAILURE OF THE
MANDATED ENTITIES TO COMPLY WITH THE MANDATORY CREDIT
ALLOCATION SET OUT IN SECTION 14 OF THIS ACT, AN ADDITIONAL
PENALTY EQUIVALENT TO TWENTY PERCENT (20%) PER ANNUM OF
THE TOTALAMOUNT OF NON-COMPLIANCE SHALL BE IMPOSED.

“Penalties on noncompliance shall be directed to the development of the MSME
sector. Ninety percent (90%) of the penalties collected [should] SHALL go to the
[MSMED Council Fund] “START-UP FUND” AS PROVIDED UNDER
REPUBLIC ACT NO. 10644, OTHERWISE KNOWN AS THE “GO
NEGOSYO ACT”, while the remaining ten percent (10%) [should] SHALL be
[given] REMITTED to the BSP, THE SECURITIES AND EXCHANGE
COMMISSION, OR THE APPROPRIATE AGENCY THAT EXERCISES
REGULATORY JURISDICTION OVER SUCH LENDING ENTITY, to
cover for administrative expenses.

“THE MSMED COUNCIL SHALL SUBMIT TO THE CONGRESS OF THE
PHILIPPINES AN ANNUAL REPORT ON THE STATUS OF THE.
PENALTIES REMITTED AND HOW THE SAME WERE USED OR ARE
BEING USED IN RELATION TO THE IMPLEMENTATION OF SERVICES
TO MSMEs IN THE AREAS OF CAPACITY BUILDING, TECHNOLOGY
INFORMATION, INFORMATION COLLECTION AND DISSEMINATION,
AND OTHER INTERVENTIONS FOR MSME DEVELOPMENT, GROWTH
AND SUSTAINABILITY.”

SECTION 21. A new Section, numbered Section 19, is hereby inserted after
renumbered Section 18 of the same act, as amended to read as follows:

“SEC. 19. OTHER VIOLATIONS. ~ EXCEPT FOR SECURITIES COVERED
UNDER THE SECURITIES REGULATIONS CODE OR REPUBLIC ACT NO.
8799, ENTITIES SHALL SECURE THE NECESSARY APPROVAL OF THE
SECURITIES AND EXCHANGE COMMISSION PRIOR TO RECEIVING
INVESTMENTS AS WELL AS GIFTS, ITEMS OR OTHER COMMODITIES,
EITHER IN THE FORM OF CASH ORITS EQUIVALENT CASH VALUE IN
CONSIDERATION OF RETURN OF PROFIT, BENEFIT, OR BLESSINGS
COMING FROM MORE THAN TWENTY (20) INDIVIDUALS, OR SUFFER
THI ‘ALTY OF THIRTY (30) TO ONE HUNDRED EIGHTY (180) DAYS
IMPRISONMENT, OR A FINE OF NOT LESS THAN TEN THOUSAND
PESOS (P 10,000.00) BUT NOT EXCEEDING ONE HUNDRED THOUSAND.
PESOS (100,000.00) OR BOTH, ATTHE DISCRETION OF THE COURT.

“ANY PERSON, WHETHER NATURAL OR JURIDICAL, WHO FAILS TO
ACQUIRE THE APPROVAL OF THE FOOD AND DRUGS AUTHORITY
(FDA) AND THE DEPARTMENT OF TRADE AND INDUSTRY (DTI) FOR


SELLING, MARKETING, AND DISTRIBUTING PRODUCTS AND
SERVICES THAT ARE REGULATED BY THE FDA SHALL SUFFER THE
PENALTY OF THIRTY (30) DAYS TO ONE HUNDRED EIGHTY (180)DAYS
IMPRISONMENT, OR A FINE OF NOT LESS THAN TEN THOUSAND
PESOS (P10,000.00) BUT NOT EXCEEDING ONE HUNDRED THOUSAND.
PESOS (P100,000.00) OR BOTH, AT THE DISCRETION OF THE COURT. *

SECTION 22. Implementing Rules and Regulations (IRR). — The Department of
‘Trade and Industry, through the Bureau of Micro, Small and Medium Enterprise
Development and in consultation with the Bangko Sentral ng Pilipinas in the case of
banks, and the Securities and Exchange Commission in the case of non-bank financial
intermediaries, and other concemed government agencies, _nongovemmment
organizations and private sector agencies involved in the promotion of MSMEs, shall
formulate the rules and regulations (IRR) necessary to implement the provisions of this
‘Act within ninety (90) days from the approval of this Act: Provided, That the IRR shall
be reviewed yearly: Provided, further, That the IRR shall be approved by the MSMED
Council.

SECTION 23. Separability Clause. ‘The provisions of this Act are hereby declared to
be separable. If any provision of this Act shall be held unconstitutional, the remainder of
this Act not otherwise aUlected shall remain in full force and ef lect.

SECTION 24. Repealing Clause. — Section 22 of Republic Act No. 8367 is hereby
repealed. 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.

SECTION 25. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved.