HOUSE ‘F REPRESENTATIVES
RECEIVED

Republic of the Philippines
HOUSE OF REPRESENTATIV!
Quezon City

pate 30 JUN

SEVENTEENTH (17") CONG: Ss

First Regular Session
REGISTRATION UNIT

5 NT |
HOUSE BILL NO,, 450 BILLS AND INDEX S5R\"CE _|

Introduced by Representative Jose Christopher Y. Belmonte

EXPLANATORY NOTE

The bill entitled, “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 and Benefits Therefore, " was
originally filed in the 16th Congress by Rep. Cresente C, Paez, Rep. Anthony M, Bravo and
Rep. Teddy Brawner Baguilat

This bill seeks to promote Social enterprise with the Poor as Primary Stakeholders
(SEPPS), SEPPS engages and invests in the poor to become effective workers, suppliers,
clients and/or owners, and/or ensure that a substantive part of the wealth created by the
enterprise is distributed to, or benefits them. It pursues poverty alleviation and improvement
of the quality of life of the poor as its principal objective. This is line with the State policies
under the 1987 Constitution, which states under Section 9, Article II thus:

“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 so ‘ces, promote full employment,
arising standard of living, and an improved quality of life for all.

This bill proposes the creation of pro-active and capable social enterprises that will
help in poverty reduction thru the implementation of a National Poverty Reduction Through
Social Entrepreneurship (PRESENT) Program to be headed by the Department of Trade and
Industry thru a Council on Social Enterprises. The role of the government will be crucial in
creating and maintaining sonducive environment for such social enterprises to flourish. The
PRESENT Program will, target areas where the poor are concentrated. Through the
development of strategic economic subsectors, it is envisioned that it will help in increasing
the income and improving the lives of the poor.

This bill also endeavors to provide for accessible non-collateralized loans thru special
credit windows with a Guarantee Fund Pool; comprehensive insurance system to reduce
vulnerability to climate: change/calamities; resources for comprehensive capacity
development for social enterprises and poor as partners (transactional and transformational
services); proactive social enterprises market development program promoting principles of
fair trade; research and development on strategic economic subsectors, appropriate
technologies and innovat‘ons to democratize access of the poor to quality basic social



services; recognition and support for Local Government Units (LGUs) in developing social
enterprises; preferential’ treatment in government procurement including coverage of
performance bonds; tax éxemptions and tax breaks for SE-PPS and social investors; and cash
incentives, among others.

Social enterprises being seen as regular business by the government has only hindered
their development. Creating a friendly environment for social enterprises will help in
strengthening the almost 30,000 social enter s in the Philippines that will have a
significant impact in the improvement of the lives of the poor.

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


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH (17) CONGRESS
First Regular Session

. 459
HOUSE BILL NO.

AN AC
ORDAINING THE PROMOTION OF SOC
POVERTY, ‘ABLISHING FOR TH
THROUGH SOCIAL ENTREPE
PROVIDING INCENTIVES AND BE

POVERTY REDUC
NT) PROGRAM AND

ENEFITS THEREFOR

CHAPTERI
GENERAL PROVISIONS

s TION 1. Short Title. ~ This Act shall be known as the “Poverty Reduction
Through Social Entrepreneurship Act,”

SEC. 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,
rising standard of living, and an improved quality of life for all. In Article II, SEC 10 and
11, it is 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 XII, SEC. 1, it is 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


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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.

Towards this end, the State shall pursue a poverty reduction program that promotes an
environment conducive to the development of growth of a vibrant social enterprise sector
engaged in poverty reduction, economic and social development, It shall 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 ensure that the provision for technical and financial
assistance, incentives and other services are free from any condition that might infringe the
autonomy or organizational integrity of the social 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.

SEC.

Definition of Ferms, ~ As used in this A‘

a) Social Enterpise or SE refers to a wealth-creating organization, however
organized, whether an association, single proprietorship, partnership,
corporation, or a cooperative or any other legal form, whose primary
stakeholders are marginalized sector of society, engaged in providing goods
and services that are directly related to its mission of improving societal well-
being. It is blished to achieve triple bottom lines such as financial, social
and ecological. It generates profit or surplus with due regard to social and
environmental costs, and makes a pro-active contribution to resolving social
and environmental problems,

A social enterprise for purposes of this Act shall mean a Social Enterprise
with the Poor as Primary Stakeholders (SEPPS), SEPPS is a social enterprise
that explicitly declares and pursues poverty reduction/alleviation or
improving the quality of life of specific segments of the poor as principal
objective. SEPPS engages and invests in the poor to become effective
workers, suppliers, clients and/or owners, and/or ensures that a substantive
part of the wealth created by the enterprise is distributed to, or benefits them.
In addition to teinvesting its surplus or profits back to the enterprise to sustain
the fulfillment of its social mission, a SEPPS also uses its surplus or pro!
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) Absolute poverty refers to the condition of the household below the food
threshold level; :
©) Assets refer to all kinds of properties, real or personal, owned by the social

enterprise (SE) as defined in paragraph (dd) of this SEC. and used for the
conduct of its businesses: Provided, That for the purpose of exemption from
taxes and to benefit from other incentives under this Act, this term shall mean



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all kinds of properties, real or personal, owned and/or used by the SE for the
conduct of its business;

Basic sector’shall refer to the disadvantaged sectors of the 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”;

Bottom line shall refer to the objectives or purposes for which a SE is

established. Triple bottom line shall refer to social, ecological and financial
objectives;
Capability building refers to the process of enhancing the viability and

sustainabilitysof SEs and pertain to education, training, coaching and other
learning events like study tours; technical, consultancy and advisory service
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 enables SEs to be effective an
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 shuch activity that connotes
the infusion: of capital or funds from the government or form the SE
Development Fund created under SEC, 16 of this Act;

Civil society organizations refers to private voluntary organizations of
citizens that are established to pursue a mission, usually involving the interest
of public, marginalized groups or specific sectors of society, They include
non-government organizations, socio-civie groups, foundations and people’
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 the
products and services and accepting a fair share of the risks and benefits o 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
Corporate Social Responsibility or CSR shall refer to the commitment of a
private enterprise or business to contribute on a voluntary basis to a
sustainable social and economic development by working with a relevant
stakeholders to improve their lives in ways that are good for business, the
social reform agenda, the sustaibale development agend and society at large.
CSR-related activities shall include; but not be limited to, the following: 1)
Charitable programs and projects; 2) Scientific research; 3) Youth and sports
development; 4) Cultural or educational promotion; 5) Services to veterans
and senior citizens; 6) Social welfare; 7) Environmental sustainability; 8)
Health development; 9) Disaster relief and assistance; and 10) Employee and
worker welfare related CSR activities:



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Economic ‘subsectors. are networks of related actors and enterpri
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 sources, 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 trading partnerships 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 ade 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 associatio
ensuring good working conditions; providing capacity building and, respect
for the environment.

Foundation shall mean the categorization of a non-profit organization 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 may hold assets in its own name for the
purposes set-out in its constitutive documents, and its administration and
operation are cartied out in accordance with its statutes or articles of
association rather than fiduciary principles;

GPPB refers to the Government Procurement Policy Board established in
accordance with Article X of R.A. No. 9184, otherwise known as the
“Government Procurement Reform Act;”

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
as well product development and marketing support using the principle of fair
trade to marginalized producers. An SE 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;
Marginalized Sectors shall refer to groups of people who are stigmatized or
marginalized by virtue of their physical, psychological, economic, social or



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cultural circumstance;

Micro-enterprise as defined in R.A, No, 6977, as amended by R.A. No, 9501,
otherwise known as the “Magna Carta for Small Enterprises,” shall refer to
any business activity or enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative, partnership or
corporation whose total assets, inclusive of those arising from loans but
exclusive of the land on which the particular business entity’s office, plant
and equipment are situated, must have a value of not more than Three Million
Pesos (Php3,000,000.00). This amount is subject to review and adjustments
by the Micro, mall and Medium Enterprises Development (MSMED)
Council, taking into account inflation and other economic indicators and may
use other variables such as number of employees, equity capital and assets
size;

Microfinance shall refer to the provision of a broad range of financial
services as. such 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 saferyt, income and livelihood); and enabling services
(basic education and literacy, participation in community development,
family and psycho-social care);

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 SEC. 34 (H) (2) (c) of Republic Act No. 8424, as amended,
otherwise known as the National Internal Revenue Code of 1997, organized
an operated. exclusively for scientific, research, educational, character-
building and youth and sports development, health, social welfare, cultural or
charitable purposes, or a combination thereof, and no part of the net income
of which inures to the benefit of any private individual;

People's Organizaiton 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 joined 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;

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. 84251;

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



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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 tefers 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 Service Institution refers to an organization that provides
assistance to SEs for them to become viable and sustainable and which
assistance pertains to supplying needs such as trainings, education and other
capacity-building measures, research and development, and other similar
activities;

Social Enterprise Advocacy Group refers to an organization whose primary
purpose is supporting the cause of SEs especially with regard to public policy
and articulating issues or causes related to social entrepreneurship;

Social entrepreneur refers to an innovative individual or institution that
promote 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 innovation designed to explicitly improve
jetal well being, housed within entrepreneurial organizations, which
initiate, guide or contribute to change in society;

Social Inclusion strategy refers to the development strategy that assi
groups of people who are stigmatized or marginalized by virtue of their
physical, psychological, economic, social or cultural circumstance in order to
restore their dignity by not only removing the barriers that limit their access
to the delivery of basic social services and employment, more importantly, by
nurturing work and other environments that create avenues for their
participation as productive members of society;

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
environment protection, strong organization governance, and desire for a
more economically just world;

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

Transactional roles refer to enterprise-related functions performed by the
poor that involve and exchange of goods or services for money including
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00) Transformational roles are functions performed by 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;

pp) Transactional services pertain 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. Transactional
services may be fee-based, such as granting loans, or nonsfee bases, such as
the extension of production-related trainings:

44) Transformational services pertains to activities that empower the poor, such
as leadership formation and organizational development, 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;

rr) Underemployment shall mean an economic position where an employed
person’s desire to have additional hours of work in his/her present jab or to
have an additional job, or to have a new job with longer working hours is not
met,

ss) Unemployment shall mean an economic situation where persons who are 15
years old and over as their last birthday and are 1) without work or have no
job or business, 2) available for work and willing to take up work in paid
employment) or selfemployment, 3) seeking work and had taken specific
steps 10 look for a job or establish a business but failed to; and

1) Value chain vefers 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 services. These activities are
supported by 6) purchasing or procurement, 7) research and development, 8)
human resource development, and 9) organizational development. An SE that
understands and manages it value chain improve its capability to create
economic, environmental and social values towards improving the position
and benefits of the poor in the value chain and toward ensuring the viability
and sustainability of the enterprise

CHAPTER I
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES

SEC. 4. Social Enterprise (SE); General Concept and Coverage ~ An SE, for
purposed of this Act refers to Social Enterprise with the Poor as Primary Stakeholders as the
term is defined in Sec. 3a ofthis Act. It may collectively owned by the poor in the form of
cooperatives or associations where the poor are the exclusive owners or comprise a majority
of the members, SEPPS may also include NGOs or other organizations that engages in
wealth-creating activities, the proceeds of which are used exclusively to finance the
fulfillment of their social mission.

SEC, 5. Eligibility for Benefits and Incentives, - To be reconized and be eligible for
the benefits and incentives provided for in this Act, the SE shall:


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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, supplicr-owners, supervisors and managers,
active members and leaders in governing bodies or 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 suzplus with due regard to social and environmental costs;

d) employ any of the following development strategies in the pursuit of its social

on: 1) empowerment strategy: 2) social inclusion strategy; 3) intermediation
strategy; and, resource mobilization strategy:

©) 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 économie subsecto

f) 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;

2) 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 and other laws

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 of time

SEC. 6. Other Eligibility Provisions. In the case of social enterprises organized as
stock corporations, partnerships or sole proprietorships, the following additional
requirments shall appl

a, A social enterprise, if organized as a sole proprietorship or partnership must be one
hundred percent (100%) owned and capitalized by Filipino citizens, If the enterprise is
a stock corporation, at least sixty percent (60%) of its outstanding capital stocks must
be owned by Filipino citizens;

b. A social enterprise must not be organized 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 a SE from accepting subscontracts from large private business enterprise
or firms or from joining cooperative or join-venture activities with other SEs or
foundations practicing CSR; and

©. A social enterprise organized as stock corporations, partnerships or sole
proprietorships, must invest at least 60% of its gross revenues to sustain the
fulfillment of its sociai mission or to provide transformational services for the poor.

C. 7. Qualifiactions. ~ Within ninety (90) days from the effectivity of this Act, the


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Social Enterprise Development Council shall formulate the implementing rules and
regulations for the application and accreditation of enterprises to qualify as SE under this Act,
following the principles of self-regulation, transparency and responsibility.

SEC. 8. Formulation of a Poverty Reduction Through Social Entrepreneurship
(PRESENT) Program ~ To, promote the development of an SE sector with the poor as
primary stakeholders, comprehensive and fully-integrated Poverty Reduction Through
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;

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;

©) People’s participation and empowerment by mobilizing civil society organizations
and social movement groups working with the poor;

4) Promoting sustainable programs that reduce inequality in incomes across economic
sectors and increase self-reliance among the poor;

©) 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;

1) Gender-sensitivity by ensuring women’s equal rights and access to SE's resources;

2) 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 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.

‘The PRESENT Program shall identify and develop key SEs and resource institutions as
partners in strategic economic subsectors that have the potential for growth and where large
numbers of the poor are concentrated. SEs shall be developed as vehicles to ensure that the
poor 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.

SEC. 9 - 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 social enterprises in the country.

The Council shall be comprise of the following:

a) Secretary of Trade and: Industry, as chairperson;
b) Secretary of Agriculture, as vice-chairperson;


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©) Lead Convenor of the National Anti-Poverty Council (NAPC), as co-vice chairperson;

4) SE sector head representative, as co-vice chairperson:

©) Secretary of Social Welfare and Development;

f) Director-General of the National Economic and Development Authority (NEDA);

g) Secretary of Finances

h) Secretary of the Interior and Local Government;

i) Secretary of Labor and Employment;

j) Secretary of Science and Techonology

k) Secretary of Education;

1) Secretary of Agrarian Reform;

m) Secretary of Health,

n) Secretary of Environment and Natural Resources;

©) Chairperson of the Cooperative Development Authority (CDA);

p) Nine (9) representatives from SEs, three (3) representative each from the main island
groupings of Luzon, Visayas and Mindanao;

4) Three (3) representatives from SE service institutions; and

1) Three (3) representatives from SE advocacy groups, as members.

Cabinet-ranked ex officio members of the Council shall designate a permanent
representative in case they fail to attend its meetings. The designated permanent
representative of any of the Cabinet-ranked members of the Council must hold a position not
lower that a bureau director.

The SE sector head, the: representatives of the SEs form the main island groupings of
Luzon, Visayas, and Mindanao, the SE service institutions, and the SE advocacy groups shall
be chosen by the President from among the nominees submitted by their respective national
organizations to serve in the Council for three (3) years. These representatives must be
conversant in the theory and practice of SE and committed to the policies and programs
provided under this Act.

The Chairperson and members of the Council shall be entitled to a reasonable per diem
for each meeting actually attended at such amount as may be fixed by the Council in
accordance with existing laws, rules and regulations,

The Council shall, from. time to time, call upon the participation of any government
agency to attend in its meetings to as

st 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 $

The Council may create an Executive Committee of seven (7) members elected by its
members from among themselves or their designated permanent representatives, with at least
three (3) members representing the SEs, and with the authority to act for the Coun and
within the specific authority granted by the Council.

SEC. 10. Powers and Functions. ~ The Council shall have the following powers and
functions:

a) Formulate policies, plans, programs and projects to develop and promote SEs as a
tool for poverty reduetion consistent with national development objectives;
b) Oversee the successful implementation of the PRESENT Program and other SE



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d)

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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;

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 report 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; and

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

SEC. 11. Secrerariat, ~ There is hereby created a Secretariat headed by an Executive
Director 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
shall perform the following functions:

a)

b)

°)
d)

a)

Provide administrative support to the Council with the assistance of the National
Economic Development Authority secretariat in the formulation of the PRESENT
development programs and plans;

Assist the Council in the implementation the PRESENT development program and
the annual and medium term development plan;

Assist the Council n the accreditation of SEs;

Assist the Council in monitoring the PRESENT development programs and the
activities of the various concerned government agencies with respect to SEs;
Prepare, collate and integrate all necessary inputs to the Council's yearly report on
the status of SEs in.the country;

Submit the periodic reports to the Council on the progress and accomplishment of
its work programs;:and

Perform other functions that may be assigned and authorized by the Council.

SEC. 12. Office. ~ The Council shall have its principal of business in Metro Manila and
may establish such branches within the Philippines as may be deemed necessary by the
President of the Philippines to carry out the powers and funetions the Council.

SEC. 13. 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)

b)

Provide SEs with the capability training and education through the Social
Enterprise Capability Building and Sustainability Program created under SEC. 16
of this Act;

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 SEC. 18 of this Act; and


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) Manage a Social ‘Enterprise Marketing Assistance Program (SMAP) that will
ensure the generation of the highest possible income for the SEs pursuant to SEC,
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‘The NCSED shall be heiided by the Executive Director of the Council Secretariat. It shall
maintain a multi-sectoral, multi-disciplinary pool of experts including those from the
academe, practicing professionals, business and industry, youth, women and other concerned
sectors, who shall be screened in accordance 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 Technology and Livelihood Resource Center (TLRC) , the Department of
Transportation and Communications (DOTC), civil society organizations and other relevant
agencies, state universities and colleges in implementing its programs.

SEC. 14, Personnel. ~ Subject to the civil service laws, rules and regulations, the Couneil
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.

SEC. 15. Role of LGUs in SE Development, ~ Pursuant to the relevant provisions of R.A.
No. 7160, otherwise known’ as the Local Government Code, the LGUs shall be primarily
responsible for the development of SEs and the implementation and enforcement of the
relevant provisions of this Act within their respective jurisdictions with the end in view of
reducing poverty therein. The LGUs are hereby mandated to include in their respective local
development plans certain policies and programs geared toward the development of SEs in
their jurisdiction

LGUs with viable SE development plan as incorporated in their respective local
development plans are entitled to avail of the SE Development Fund created under the
immediately succeeding SEC. for the purpose of initiating and facilitating the development
and sustainability of SEs in their own jurisdiction: Provided, That no LGU shall establish and
operate its own SE.

CHAPTER UL
DEVELOPMENT OF SOCIAL ENTERPRIS|

SEC, 16. 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 SEs 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 skill 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 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


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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 a SE Development Fund (SEDF)
in the amount of Three Billion Pesos (Php3,000,000,000.00) to be administered by the
Couneil with an endowment from the earnings of the Philippine Amusement and Gaming
Corporation (PAGCOR), in foreign sources as may be accepted by the Council, Capability
building projects approved by the Council shall be implemented by the NCSED.

Only the fruits of the SEDF shall be used for the purposes provided herein. Any
undisbursed fruits for the preceeding year shall form part of the disbursable portion of the
SEDP in the following year.

SEC. 17. 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 ki
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

©) equip SEs and support institutions with innovative and sustainable approaches to
improve access to the poor to quality basic social services.

SEC. 18, Social Enterprise Marketing Infrastructure Development ~ The Council shall
promote the development and expansion of local and foreign markets for the products and
services of SEs, guided by the principles of fair trade. Consistent with this, the Council shall:

a) establish a SE Marketing Assistance Program (SMAP) 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;

b) develop, install and sustain a SE market information system with the assistance of the
DTI and DOTC which shall be called the SE Marketing Information Network
(SMIN).

The SMIN shall be set up form the level of the municipal and provincial LGUs, the
regional and up to the Council level within one (1) year form 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 dedicated website on the
internet.



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The SMIN shall provide information and marketing services related to products of SEs
which shall include the following:

1. Supply data;

2. Demand data;

3. Price and price trends;

4. Product standards;

5. Directory of, but not limited to SEs, traders, key market centers, processors and
business institutions both at the national and local levels;

6, Information and technology generated from research institutions;

7. International, regional and local market forecasts; and

8. Resource accounting data

CHAPTER IV
INCENTIVES AND BENEFITS

SEC. 19. Special Credit Windows, ~ In addition to the special credit windows
provided for the promotion of microfinance as provided under SEC. 16 of RA 8425, the Land
Bank of the Philippines, Development of the Philippines, Philippine Postal Bank and Al
Amanah Bank, are hereby mandated to set aside at least eight percent (8%) of their total loan
portfoliao based on their balance sheet in the end of the preceding quarter, and open a special
credit windows for SEs,

For a period of ten (10) years from the date of the effectivity of this Act, all other
ending institutions as defined under the Central Bank Act or the General Banking Act, as
amended, whether public or private, shall likewise set aside at least eight percent (8%) of
their total loan portfolio 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 BSP shall establish an incentive program to encourage lending to SEs beyond the
mandatory credit allocation such as possible reduction in bank’s reserve requirement.

‘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
3s and shall act immediately on the Council’s reports of non-compliance herewith.

The special credit window for SEs shall bear interest lower than the market rate and
shall have longer terms of payment and waiver of applicable fees.

SEC. 20. Special Credit Window Purposes. — The special credit window provided
under SEC. 19 of this Act shall be intended for the following purposes:

a) Organizational development loan or capacity-building loan for the conduct of social
preparation activities or the conduct of capability-building training or professional


development of the board, management and staff of the SE for social
entrepreneurship, such as business planning and advisory services, technology
intervention, incubation, market studies, and product development;

b) 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

c) 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;

d) Value chain financing to cover any of the value chain activities such as production,
processing and marketing;

e) 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

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

SEC. 21, Eligibility for Agriculture and Fisheries Credit, ~ At least ten percent (10%) of
the funds created under SE 6 of RA 1000, otherwise known as “The Agri-Agra Reform
Credit Act of 2009,” mandated to be set aside by all banking institutions, whether government
or private, for agriculture andl fish be make available for SEs engaged in
agriculture and fisheries activities.

SEC, 22. Social Enterprise Guarantee Fund Pool with Non-Collateral Loans, ~ There is
hereby created a Social Enterprise Guarantee Fund Pool (SEGEP) 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 including the PAGCOR, the
Philippine Charity Sweepstakes Office (PCSO), the Social Security System (SSS), the
Government Service Insurance System (GSIS), the National Power Corporation (PNOC), as
contribution to the SGEP 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 dund 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 SE
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 guideline for the
fund pool.

SEC. 23. Utilization of People's Development Trust Fund. ~ The earnings of the People’s
Development Trust Fund (PDTF) declared under SEC. 11 or RA 8425 may be utilized and


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accessed by the NSCED or accredited SE for the following purposes:

a) Consultancy and" training services for SEs and their beneficiaries on the

lishment of the necessary support services such as financial preparation,
funding sourcing, operation of credit and saving entities, monitoring and evaluation
including training ‘on marketing, financial, human resource operational and
strategic management;

b) Scholarship or training grants for SE staff and officers, and selected beneficiaries;

©) Community organizing for SEs;

d) SE development and capability building programs, feasibility studies and
researches;

e) — Leagal and other:management support services for SEs such as registration or
accreditation, documentation, contract review and enforcement, audit and
operational assesstnent;

f) Information dissemination of SE technology and management; and

8) Other activities to support SEs as approved by the designated agency administering
the PDTE.

SEC. 24, Tax exemptions. - An accredited SE shall have the following tax exemptions:

a) ‘The SE with a net income of not more than Fifteen Million Pesos (PhP15,000

000.00) shall be exempt from all national, city, provincial, municipal or barangay

taxes of whatever name and nature: Provided, That such net income shall be

allocated for transformational services and other activities of the SE as provided

under SEC. 5.g of this Act;

b) — Documentary stamp tax;

©) Capital gain tax on sales or exchanges of real property classified as capital assets or
shares of stock; and

d) For five (5) years-after the effectivity of this Act, all SEs duly certified by the
Council, in consultation with the Department of Finance (DOF) and the Board of
investment (BOI) of the DTI, shall be exempted form the payment of tariff and
duties for the importation of all types of products 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 SEs and
can be shown to be directly related to further improve the value chain operations of
the SEs.

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 implement for use by the SEs.

For income tax purposes, a reinvestment made by a SE for the expansion of its
socioeconomic projects within the are of its operation shall be tax deductible for the gross
income.

SEC. 25. Preferential Rights, — Social enterprises shall be accorded a preferential right in
the procurement process and in the implementation of procurement contract by the
government in all its branches, departments, agencies, subdivisions and instrumentalities
including in the government owned and controlled corporations and local governments units.


SEs shall be given priority and preference in the following procurement process:

a)

4g

Direct contracting as provided under SEC. 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

Shopping as provided under SEC. 52, paragraph (a) of RA 9184 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 SE 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 quotations 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,

Negotiated procurement as provided under SEC. 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 servic:
Only in the event that no procurement is perfected by way of direct contracting,
shopping, or negotiated procurement due to the absence of SEs within the area of
operation of the procuring entity or the lack of interest or capacity to supply on the
part of existing SEs, shall the procuring entity through its bids and awards
committee issue an invitation to bid.

‘A procuring entity, when applicable, shall have at least one member representing
SEs.

Registered small enterprises under RA 6977 that qualify as SE under this Act shall,
consistent with SEC. 4 of RA 9501, be entitled to a share of at least ten percent
(10%) of total procurement value of goods and services supplied to the
government, its bureaus, offices and agencies annually:

The Council shall, in coordination with the Department of Budget and
Management (DBM) and the Department of the Interior and Local Government
(DILG), issue the rules and regulations that shall implement the preferential right
accorded to SEs under this SEC. including the limitations and restrictions in its
application.

SEC. 26. Incentives for Social Investors, ~ Social investors and other institutions that
contribute money or other forms of donation in the promotion and development of
SEs shall be entitled to the following tax incentives:

Equity investments. and donations to an accredited SE shall be fully deductible


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from the gross income of the investor or donor subject to the conditions of SEC. 34
paragraph (c) of RA 8424 otherwise known as the “National interval Revenue
Code of 1997,” as amended,

4) Donations to anvaecredited SE shall be exempt from donor's tax subject to the
qualifications of SEC, 101 of RA 8424, as amended.
For the purpose of availing of the tax incentives under this SEC., the accreditation
of the recipient SE by the Council shall be a sufficient evidence for qualification as
a social investor under this Act

CHAPTER V.
APPROPRIATION AND OTHER PROVISIONS

SEC. 27. Appropriations, ~ To carry the provisions of this Act, the following amounts
are appropriated as follows:

a) The sum of One hundred million pesos (P100,000,000.00) is hereby appropriated
as the initial operating fund which sum shall be sourced from the President's
Contingent Fund and voluntary contributions, grants and gifts from both local and
foreign sources as may be accepted by the Council. In the subsequent years, the
Council shall have a separate annual appropriation under the DTI which shall be
included in the annual General Appropriations Act in the fiscal year immediately
following the approval of this Act.

b) The aggregate sum of Three billion pesos (P3,000,000,000.00) for ten (10) years is
hereby appropriated for the establishment of the SEDF from the share of the
national government in the earnings of the PAGCOR and from voluntary
contributions, grants and gifts from both local and foreign sources as may be
accepted by the Council, in the following manner: on the first year, One hundred
million pesos (P100,000,000.00); on the second year, One hundred fifty million
pesos (P150,000,000.00); on the third year, Two hundred million pesos
(P200,000,000.00);. on the fourth year, Two hundred fifty million pesos
(P250,000,000,00); on the fifth year, Three hundred’ million pesos
(P300,000,000.00); and every year thereafter until the tenth year, Five hundred
million pesos (P'500,000,000,00) annually.

SEC. 28. Penalty 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 Twenty-five thousand pesos
(P25,000.00) but not more than F ‘ifty thousand pesos (P50,000,00), or both imprisonment and
fine, at the discretion of the court, shall be imposed upon any person, corporation,
government entity or agency 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 the violation is committed by the SE or a government agency, the members,
officers, directors or trustees thereof who are directly involved shall be held liable therefor

If the violation is committed by the employees and agents who acted in gross violation
of the provisions of this Act, the officers, directors or trustees, or incorporators of the SE shall
be jointly and severally liable with the offending employees, agents, and the enterprise.


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If the offender is a public official or employee, the offender shall, upon conviction,
suffer the accessory penalty of absolute disqualification

C, 29. Non-Compliance with the Mandatory Allocation of Credit Resources. —
Administrative sanctions including a fine of not less than Five hundred thousand pesos
(P500,000.00) 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
SEC. 19 of this Act,

EC. 30. Non-Impairment Clause. — Nothing in this Act shall be construed to
h, impair, or repeal the rights granted to marginalized sectors under existing laws

dimin

SEC. 31. Information Dissemination. The Philippine Information Agency (PIA)
shall, in coordination with the Council, the DTI, DA, and the DIL ensure the proper and
adequate information dissemination of the contents and benefits of this Act to the general
public especially to its intended beneficiaries

Within sixty days (60) after its effectivity, the Council shall distribute copies of this
Act to every department, agency, subdivision, and instrumentality of the government,
including government-owned and controlled corporations, regional and provincial offic
and local governments.

All duly accredited SEs shall be given one (1) copy of this Act at cost. Thereafter,
every newly accredited SE shall be issued a copy of this Act together with the rules and
regulations promulgated pursuant to this Act

SEC, 32. PRESENT. Program in Government, — All agencies of the government
implementing a poverty alleviation program shall, in coordination with the Council and
within a period of five (5) years but in no case longer than ten (10) years from the approval of
this Act, incorporate the PRESENT Program in their respective poverty alleviation programs
as a tool for poverty reduction

The Council shall, in coordination with the various government agencies with poverty
alleviation programs, prepare the appropriate beneficiaries thereof and organize them into
full-fledged SEs under the contemplation of this Act

Within a period of five (5) years, the Council 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. The Council shall evolve
socially acceptable benchmarks for evaluating the performance of SEs and incorporate them
to effectively develop and regulate the sector.

SEC. 33. Social Entrepreneurship Education in Schools ~ Toward strategically
developing the nation’s human resource capability in social entrepreneurship, the DepEd 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. This shall be part of the
SE Capability Building and Sustainability Program stated in Sec. 6 of this Act.

A continuing social entrepreneurship education program for out-of-school youth and
adults shall likewise be developed and undertaken


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The social entrepreneurship’ education program for primary and secondary education shall
include information regarding:

a) social issues and eivie ways of addressing them
b) the producer as a steward of natural resources
©) the consumer as a responsible member of society and his responsibility to

develop critical awareness which is the responsibility to be alert and
questioning about the environmental and social impacts of the goods and
services he/she uses:
¢.1) social concern which is the responsibility to be aware of the impact of his
consumption to society, especially the disadvantaged; and

.2) environmental awareness which is the responsibility to understand the
environmental consequences of this use of natural resources, consumption,
recognizing his individual and social responsibility to conserve natural
resources for future generations;

All higher learning institutions and vocational schools are mandated to include a subject on
social entrepreneurship in their social studies program or in their business, commerce, or
economies courses,

EC, 34. Applicability of Other Laws, ~ The Labor Code and all other labor laws, the
Social Security Act, the Medical Care Act, other social legislations, and all other laws and
executive orders that govern the relationship between the employer and the employee shall
apply to SE and its employees and that all employees covered under this Act shall be entitled
to the same benefits given to any regular employee such as social security and healthcare
benefits.

SEC. 35. Interpretation and Construction. = In case of doubt in the meaning of any
provision of this Act or in the rules and regulations promulgated pursuant to this Act, it shall
be resolved in favor of SEs and their stakeholders.

SEC. 36, Congressional Oversight Commitiee. — There is hereby created a
Congressional Oversight Commitice on Social Enterprises composed of the Chairman of the
Senate Committee on Economie Affairs, Trade and Commerce and the Chairman of the
House Committee on Trade and Industry, four (4) members of the Senate and four (4)
members of the House of Representatives. The members from the Senate shall be appointed
by the Senate President from among the members of the Senate Committee on Economic
Affairs, Trade and Commerce based on the proportional representation of the parties or
coalition therein, The members from the House of Representatives shall be appointed by the
Speaker from among the members of the House Committee on Trade and Industry based on.
the proportional representation of the parties or coalitions therein,

‘The Oversight Committee, upon review and approval of the Implementing Rules and
Regulations of this Act shalb become functos officio and thereafter cease to exist: Provided,
however, That the Council shall submit to the Committee on Economie Affairs, Trade and
Commerce of the Senate and the Committee on Trade and Industry of the House of
Representatives an annual report on the implementation of this Act

The appropriation for the oversight committee shall be charged to the budget of both Houses
of Congress in the Annual General Appropriations Act



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SEC. 37. 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 NCSED,
be responsible in organizing activities for the event.

CHAPTER V.
FINAL PROVISIONS

SEC. 38, 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 and sector, promulgate the necessary
rules and regulations for the effective implementation of this Act.

SEC. 39. Separability Clause, ~ 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.

>, 40, Repealing Clause, ~ For the purposes of this Act, SEC. 11 of RA 8425 and
SEC.s 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 regulationor parts
thereof inconsistent with any provisions of this Act are hereby repealed, amended or modified
accordingly

SEC. 41. Effectivity. — This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in, two (2) national newspapers of general circulation.

Approved,