Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO. _____
___________________________________________________________
Introduced by Representative Bernadette Herrera
___________________________________________________________
AN ACT
CREATING
THE
POVERTY
REDUCTION
THROUGH
SOCIAL
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROMOTING SOCIAL
ENTERPRISES WITH THE IMPOVERISHED AS PRIMARY STAKEHOLDERS
EXPLANATORY NOTE
Poverty has always remained a worrisome and widening concern in the
country. This was further highlighted by the effect of the COVID-19 pandemic, as it
caused unprecedented reversals in national poverty reduction efforts in recent years.
Latest figures from the Philippine Statistics Authority (PSA) show that for the first
semester of 2021, 23.7% or 26.14 million Filipinos and 18% or 4.74 million families
are living below the poverty threshold.1
This bill stands as a counterpart to that filed by the Honorable Senator Sonny
Angara in the Senate. Through these combined efforts, we seek a solution to the
rising poverty incidence through a multi-sectoral approach.
One such sector is that of the social enterprise, which the United Nations
Development Programme (UNDP) has identified them as “innovative and effective
poverty
reduction
agents
that
can
contribute
to
the
promotion
of cohesive
communities”, as early as 2015.2 In the Philippines, a study3 conducted by the UN
Economic and Social Commission for Asia and the Pacific (ESCAP), the British Council
3 Reaching the Farthest First: The State of Social Enterprise in the Philippines
2
https://www.undp.org/sites/g/files/zskgke326/files/publications/Social%20Enterprise-%20A%20New%20Model%
20for%20Poverty%20Reduction%20and%20Employment%20Generation.pdf
1 https://psa.gov.ph/content/proportion-poor-filipinos-registered-237-percent-first-semester-2021
September 8, 2022
8:49 am
4566


and the Philippine Social Enterprise Network, found that there are about 164,473
social enterprises operating with agriculture as the most common4 sector of
operation,
with
the
sector
creating
more
than
17,000
jobs
and
generating
approximately US$21 million in value in 2016. It was also noted that although most
social enterprises have their headquarters in the national capital, their reach often
extends to the rural countryside.5
Therefore,
to
continue
and
build
upon
the accomplishments of social
enterprises and to be their effective partners for change, this bill has for its goal a
means to institutionalize a framework for government which shall identify strategic
economic subsectors with potential for growth and where the poor are concentrated
or could be major players. The government shall likewise formulate medium-term
and annual development plans in synchrony with the country’s medium-term
development plan.
Finally, the bill also aims to promote people's participation and empowerment;
establish sustainable programs that reduce inequality in incomes and increase
self-reliance among the poor; and, develop effective mechanisms for the provision of
quality and accessible social services to the poor, among others.
In view of the foregoing, the passage of this bill is earnestly sought.
BERNADETTE HERRERA
5 https://www.britishcouncil.ph/sites/default/files/social_report_bc_fa_102517_web-compressed.pdf
4 Other predominant sectors where social enterprises are engaged in are education, business development,
financial services and employment creation.


Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO. _____
___________________________________________________________
Introduced by Representative Bernadette Herrera
___________________________________________________________
AN ACT
INSTITUTIONALIZING
THE
POVERTY
REDUCTION
THROUGH
SOCIAL
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROMOTING SOCIAL
ENTERPRISES WITH THE POOR AS PRIMARY STAKEHOLDERS
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
CHAPTER I
GENERAL PROVISIONS
Section 1. Short Title. – This Act shall be known as the "Poverty Reduction
Through Social Entrepreneurship (PRESENT) Act."
Sec. 2. Declaration of Policy. – The State shall 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. The State shall provide social justice in all phases of national
development and shall value the dignity of every human person and guarantees full
respect for human rights.
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. Towards this
end,
the
State
shall
pursue an inclusive growth strategy 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
1
4566


empower
the
poor
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
provide technical and financial assistance, incentives and other services to enable
Social Enterprises to develop into viable and vital anti-poverty agents, and the
creation of a strong social entrepreneurship movement that will be instrumental in
reducing poverty in the country.
Sec. 3. Definition of Terms. – The following terms when used in this Act
shall mean:
a)
Social Enterprise or SE refers to a social mission-driven organization in the
form
of
an
association,
single
proprietorship,
partnership,
corporation,
cooperative,
peoples
organization,
non-stock
non-profit
and
peoples
organizations or any other legal form that conducts economic activities
providing goods and/or services directly related to their primary mission of
improving the well-being of the poor, basic and marginalized sectors and their
living environment. A social enterprise explicitly declares and pursues poverty
reduction
as
its
principal
objective
by
purposefully
rendering
both
transactional and transformational services. An SE 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 or benefits them. In addition to reinvesting its surplus or profits
back to the enterprise to sustain the fulfillment of its social mission, a SE also
uses it surplus or profits and mobilizes other resources to assist the poor to
become partners in SE or value chain management and governance and to
become partners in community, sectoral and societal transformation.
A single proprietorship, partnership or corporation must fulfill the
eligibilities set forth in Section 14 to avail of the benefits and incentives under
this Act.
b)
Government-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
2


financial institutions, and local government units procuring Goods, Consulting
Services and Infrastructure Projects;
c)
Basic Sectors, as defined by Republic Act 8425 or the "Social Reform and
Poverty Alleviation Act", 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 disabilities, senior
citizens, victims of calamities and disasters, youth and students, children, and
urban poor;
d)
Economic Subsectors refer to 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;
e)
Marginalized Sectors refer to groups of people who are stigmatized or
excluded by virtue of their physical, psychological, economic, social or cultural
circumstance;
f)
Poor, as defined by Republic Act 8425, refers to individuals and families
whose income fall below the poverty threshold as defined by the National
Economic and Development Authority and/or cannot afford in a sustained
manner to provide their minimum basic needs of food, health, education,
housing and other essential amenities of life;
g)
Poverty Reduction refers to overcoming the income, resource and capability
deprivation among the poor, basic and marginalized sectors;
h)
Social Enterprise Service Institution refers to an organization that provides
assistance to SEs for them to become viable and sustainable and which
3


assistance pertains to supplying needs such as trainings, education and other
capacity-building measures, research and development, and other similar
activities;
i)
Transactional Services refer to enterprise or market-driven activities, such as
providing loans, demonstrating new technologies or conducting trainings that
are necessary for the poor in the SE system to effectively and efficiently
perform their roles as workers, suppliers, clients and owners;
j)
Transformative Services refer to activities that empower the poor, such as
leadership formation, organizational development, financial and legal literacy,
asset
build-up
and
providing
education
and
experiential
learning
opportunities, to become conscious change agents for themselves, for their
communities, sectors and society as a whole;
k)
Value Chains refer to value-adding economic activities that an enterprise is
interlinked with in the process of producing goods and/or services to serve its
chosen
market.
A
value
chain
typically
consists
of:
1)
raw materials
processing, 2) inbound distribution or logistics, 3) manufacturing operations,
4) outbound distribution or logistics, 5) marketing and selling, and 6)
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; and
l)
Living Wage refers to the amount of family income needed to provide for the
family’s food and non-food expenditures with sufficient allowance for savings/
investments for social security so as to enable the family to live and maintain
a decent standard of human existence beyond mere subsistence level, taking
into account all of the family’s physiological, social and other needs.
CHAPTER II
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES
4


Sec.
4.
Formulation
of
a
Poverty
Reduction
Through
Social
Entrepreneurship (PRESENT) Program. – The PRESENT Program shall be
established as a flagship program of government. The objective of the PRESENT
Program is to progressively improve the position and benefits derived by a big
number of the poor, marginalized and basic sectors derived from economic subsector
development
and
growth.
It
shall
do
this
by
identifying strategic economic
subsectors with the potentials for growth and where the poor are concentrated or
could be major players. In the process, it shall identify and develop key SEs and
resource institutions as partners in providing transactional and transformational
services towards poverty reduction. SEs shall be developed as vehicles to ensure
that the poor benefit the most from sustainable subsector development.
The formulation of the PRESENT program shall be guided by the following
principles:
a)
Promoting sustainable programs that support the development of inclusive
value chains in key economic subsectors, towards reducing inequality in
incomes and increase self-reliance among the poor;
b)
Enabling SEs to overcome constraints and to take advantage of opportunities
for
enhancing
the
position
and
benefits
of the poor and their living
environments
including
those
that
harness
innovative
approaches
in
addressing social problems;
c)
Development of sustainable mechanisms for the provision of quality and
accessible social services to the poor;
d)
People's empowerment by ensuring the participation of the poor, basic and
marginalized sectors;
e)
Gender-sensitivity by ensuring women's equal rights and access to SE's
resources;
f)
Ecological soundness in the pursuit of sustainable and equitable development;
g)
Incorporation of the PRESENT Program in the government's poverty reduction
drive as a major sustainable and comprehensive strategy; and
h)
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.
5


The planning framework of the PRESENT Program and its planning process
shall ensure that the poor 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.
PRESENT medium-term and annual development plans shall be formulated in
synchrony with the medium-term development plan of the national government.
Sec. 5. Social Enterprise Development Council. – The existing Micro,
Small and Medium Enterprise Development (MSMED) Council, which is an attached
agency of the Department of Trade and Industry, shall be strengthened and
expanded to effectively spur the growth and development of MSMES and SEs
throughout the country, and to carry out the policy declared under this Act. It shall
now be known as the National Enterprise Development Council, herein referred to as
the Council.
In addition to the existing functions of the Council as provided under Republic
Act 9501 or the “Magna Carta for Micro, Small and Medium Enterprises”, the Council
shall serve as the primary agency tasked to carry out the promotion, growth and
development of social enterprises in the country. To ensure that the Council is able
to fulfill its additional mandate, there shall be an SE Committee under the Council
that shall perform the following specific duties:
a)
Promote social enterprise as a key strategy for reducing poverty and enabling
inclusive growth;
b)
Provide oversight for the implementation of the PRESENT Program and
activities of the Center for Social Enterprise Development (CSED):
c)
Establish policies, plans, programs and projects to develop and promote SE as
a tool for poverty reduction as part of a comprehensive Social Enterprise
Development Plan fully integrated and consistent with national development
objectives and plans;
d)
Monitor and evaluate the performance of programs and projects of CSED for
appropriate incentives;
6


e)
Submit annual and other periodic reports to the President and the Congress
of the Philippines;
f)
Promulgate such rules and regulations and exercise such other powers and
functions as may be necessary to carry out the purposes of this Act; and
g)
Perform such other functions as may be necessary for its effective operations
and the continued enhancement, growth and development of the SE sector.
The SE Committee shall be composed of the DTI, relevant council members
and the following representatives from the SE Sector and SE Service Institutions to
realize these powers and functions:
a)
Nine (9) representatives from SEs, three (3) representatives each from the
main island groupings of Luzon, Visayas, and Mindanao;
b)
Three (3) representatives from SE service institutions; and
c)
Three (3) representatives from SE advocacy groups.
Sec. 6. Center for Social Enterprise Development. – There shall be
established a Center for Social Enterprise Development (CSED) under the supervision
of the Council and to be headed by an Executive Director, which shall have the
primary responsibility of implementing comprehensive policies for Social Enterprise
Development. Specifically, the CSED shall be responsible for:
a)
The development and implementation of the PRESENT Program as approved
by the Council, with the following components:
1. Formulation and implementation of social entrepreneurship-oriented
strategic economic sub-sector development plans that shall serve as
the basis for major policies, projects and activities;
2. Capacity Building and Sustainability - The CSED· will work with
qualified Social Enterprise Service Institutions and other intermediaries
to design and deliver training and education in social entrepreneurship
development, institutional start-up or strengthening, human resource
competency
and
skills
training,
business
planning
and
advisory
services, upgrading of accounting and auditing systems, technical
assistance
for
the
installation
or
improvement
of
management
information
systems,
technology
intervention,
technology
incubation/commercialization,
market
studies,
and
product
7


development competitiveness, business matching activities, trade fairs
and missions, policy advocacy, disaster-resiliency and other related
activities.
3. Research and Development - The CSED in coordination with the NEDA,
DOST, DTI, National Anti-Poverty Commission and other appropriate
agencies, research institutions, and intermediaries, shall develop and
enhance a research and development system that:
i. 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 programs and projects;
ii. equip SEs and support institutions with services and technologies
that are appropriate for enhancing the participation and benefits of
the poor in various economic subsectors; and
iii. equip SEs and support institutions with innovative, and sustainable
approaches to improve access of the poor to quality basic social
services.
4. Information and Marketing Assistance - The CSED shall promote the
development and expansion of local and foreign markets for the
products and services of SEs. Towards this, the CSED shall:
i. establish a marketing assistance program that will assist SEs 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; and
ii. develop install and sustain a market information system for SEs
with
the
assistance
of
the
DTI
and
DOT.
All
government
departments, agencies, bureaus, research institutions, as well as
the
Local
Government
Units
(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.
8


b)
Establishment and implementation of criteria and process for the qualification
of SEs that shall be eligible for support and other incentives as provided by
this Act and as approved by the Council;
c)
Identification of sources of financing for the SE sector not limited to grants,
loans and equity financing for enterprise incubation, start-up and expansion;
d)
Management of multi-stakeholder convergence programs and activities among
government agencies and private organizations in support of the PRESENT
Program;
e)
Coordination with the concerned government agencies and local government
units in the development and implementation of the PRESENT Program and
projects.
f)
Coordination
with
social
enterprise
stakeholders,
including
people's
organizations,
non-government
organizations,
and
multi-sectoral
and
multi-disciplinary pool of experts from the academe, practicing professionals,
business, industry, youth, women and other concerned sectors to provide
advice and technical assistance on matters pertaining to SEs.
Sec. 7. Role of LGUs in SE Development. – LGUs shall be encouraged to
incorporate viable SE development plans in their local plans and collaborate with
SEs.
Sec. 8. Social Enterprise Development Fund. – There shall be included in
the budget of the DTI under the annual General Appropriations Act an initial amount
of Nine Hundred Million Pesos (P900,000,000.00) for the establishment of a Social
Enterprise Development Fund (SEDF) which shall be utilized as grants to SEs for the
plans set forth under the PRESENT program.
The SEDF shall be allocated for:
a) Six Hundred Million Pesos (P600,000,000.00) for value-chain financing; and
b) Three Hundred Million Pesos (P300,000,000.00) for enterprise development
services.
After the first year of implementation, such sums as may be necessary to
fund the SEDF shall be included in the budget of the DTI under the annual General
Appropriations Act.
9


Plans for the utilization of the SEDF shall be developed by the CSED for
approval by the Council.
CHAPTER III
INCENTIVES AND BENEFITS FOR SOCIAL ENTERPRISES
Sec. 9. Special Credit Windows. – The Land Bank of the Philippines,
Development Bank of the Philippines and other government financial institutions
shall establish special credit windows for the unique needs of SEs that are backed by
a guarantee fund, as provided by Section 10 of this Act, for the following purposes:
a)
Credit line for business development loan or working capital loan to cover the
operational and management expenses of an existing business or income
generating project, including receivable financing or purchase of additional
inventory, soft or intangible investments such as trade fair participation or
acquisition of software or franchise development packages;
b)
Fixed assets financing to cover acquisition of fixed assets like machineries and
equipment, motor vehicle, or acquisition of lot for project site or construction
of a plant and building and the improvement thereof;
c)
Value chain financing to cover any of the value chain activities such as
production, processing and marketing;
d)
Domestic letter of credit or trust receipt to provide a stand-by credit facility
for
the
SE
borrower
for
the
purchase
of
product
inputs, equipment,
machinery, implements, and spare parts, whereby payment of which is
guaranteed and to be made to the seller by the lending institution, provided
all documents conform with the terms and conditions of the credit; and
e)
Revolving
Credit
Line
for
re-lending
to
finance
the
livelihood
project
requirements of end-borrowers.
Sec. 10. Social Enterprise Guarantee and Surety Fund. – There shall be
established a Social Enterprise Guarantee and Surety Fund (SEGSF) which shall be
funded from equity contributions of government financial institutions. The SEGSF
shall be administered by the Small Business Corporation to enable SEs to access non
collateralized and other appropriate financing while mitigating the risks involved in
SE sector lending, The SEGSF shall be used to provide guarantee cover to
participating financial institutions and other parties in extending financing to SEs:
10


Provided, That the fund may also be used to cover the performance bond of SEs for
their transactions.
Sec. 11. Compliance to Mandatory Allocation of Credit Resources. –
Loans granted by financial institutions to Social Enterprises shall be computed by the
Bangko Sentral ng Pilipinas as twice the loan amount for purposes of determining
financial institutions' compliance to the mandatory allocation of credit resources to
micro, small and medium enterprises under Republic Act 9501 or the "Magna Carta
for Micro, Small and Medium Enterprises."
Sec. 12. Public Procurement for Social Enterprises. – The Government
Procurement Policy Board (GPPB) shall facilitate the full participation of SEs in public
procurement processes. In support of this provision, the DBM shall direct agencies of
government to allocate at least ten percent (10%) of their annual budgets
specifically for projects to be procured from SEs.
Sec. 13. 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 SEs and their stakeholders among the poor. Furthermore, SEs shall be eligible to
be licensed agents or delivery channels for their clients and constituents.
Sec. 14. Cash Incentives for Persons with Disabilities. – To level the
playing field and in recognition of the circumstances of start-up SEs primarily
employing PWDs, the SEDF created in Section 8 of this Act shall provide a cash
incentive for every PWD, in accordance with Republic Act 7277 or the “Magna Carta
for Disabled Persons”, and other marginalized sectors as may be provided by this
law, representing at least twenty five percent (25%) of the daily minimum wage,
until such time that the said SE is able to achieve financial sustainability.
Sec. 15. Eligibility for Benefits and Incentives. – In the case of SEs
organized as stock corporations, partnerships or sole proprietorships, the following
requirements shall apply to become eligible for benefits and incentives provided by
this Act:
a)
An SE must not be organized as 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,
11


That this shall not preclude a 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 practicing Corporate
Social Responsibility (CSR).
b)
At least sixty percent (60%) of a SE’s total expenditures and profits plows
back to the enterprise for the benefit of the poor, and engage in practices that
optimize the benefits for the poor through the provision of living wages,
above-market
pricing
for
economically
disadvantaged
producers
and
suppliers, and other such best practices that distribute the profit generated by
the enterprise.
CHAPTER IV
APPROPRIATION AND OTHER PROVISIONS
Sec. 16. Social Entrepreneurship Education in Schools. – Toward
strategically
developing
the
nation's
human
resource
capability
in
social
entrepreneurship, the DepEd, TESDA and the CHED shall cause the integration of SE
content and inclusion of SE courses in the curricula at all levels, especially in the
secondary
and
tertiary levels. A continuing social entrepreneurship education
program for out-of-school youth and adults shall likewise be developed and
undertaken.
Sec. 17. Social Enterprise Week. – In order to institute continuing
awareness on the importance of SEs as a viable government strategy in pursuing
poverty alleviation, the week of the month when this Act shall have been signed into
law shall be declared as the "Social Enterprise Week" and shall be celebrated
annually. The Council shall, through the CSED, be responsible in organizing activities
for the event.
Sec. 18. Appropriations. – The Council shall allocate the initial amount of
Fifty Million Pesos (P50,000,000.00) from the existing MSMED Council Fund to
support the operations and programs of the CSED. Thereafter, such sums as may be
necessary for the continued implementation of this Act shall be included in the
budget of the DTl under the annual General Appropriations Act.
12


The
budgetary
requirements
of
the
cooperating
agencies
shall
be,
incorporated in their respective budgets. The CSED may raise funds from other
sources for specific projects as may be authorized by law.
Sec. 19. Transitory Provision. – Within a period of five years, the NEDC
shall facilitate the development and dissemination of tools, and invest in the
development of the capability of SEs to plan, monitor and evaluate their social and
financial
performance
and
outcomes.
Further,
the
NEDC
shall
evolve
socially-acceptable
benchmarks
for
evaluating
the
performance
of
SEs
and
incorporate such to more effectively develop and regulate the sector.
Sec. 20. Implementing Rules and Regulations. – Within ninety (90)
days from the effectivity of this Act, the Secretary of Trade and Industry shall, in
consultation and coordination with the concerned government agencies, promulgate
the necessary rules and regulations for the effective implementation of this Act.
Sec. 21. Separability Clause. – If any portion or provision of this Act is
subsequently declared invalid or unconstitutional, other provisions hereof which are
not affected thereby shall remain in full force and effect.
Sec. 22. Repealing Clause. – All other laws, acts, presidential decrees,
executive orders, presidential proclamations, issuances, rules and regulations, or
parts thereof which are contrary to or inconsistent with any of the provisions of this
Act are hereby repealed, amended, or modified accordingly.
Sec. 23. Effectivity. – This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.
Approved,
13