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

Nineteenth Congress
First Regular Session

HOUSE BILL NO. 1178

Introduced by Honorable Bryan B. Revilla

AN ACT

FURTHER PROMOTING ENTREP! 'URSHIP BY STRENGTHENING,
EMPOWERING, AND ENHANCING THE FINANCING AND OTHER SUPPORT
PROGRAMS FOR MICRO, SMALL AND MEDIUM ENTERPRISE: MENDING FOR
THE PURPOSE REPUBLIC ACT NO. 6977, AS AMENDED, OTHERWISE KNOWN AS
‘THE “MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(MSMEs)”

EXPLANATORY NOTE

Almost all, 99.51% to be precise, of all business enterprises operating in the country are
classified MSMEs according to the 2020 List of Establishment of the Philippine Statistics
Authority (PSA). MSMEs employ 63.19% of the country’s workforce.

This bill seeks to encourage and enhance the development of MSMEs in the country by
providing the following provisions:
1. Automatic approval of their business application;

2. National Government to allocate of at least 10% of all its procurement opportunities

for goods and services to eligible MSS

Providing 20% discount on shipping and delivery fees to duly registered MSMEs;
4, Reservation of free storage space to duly registered MSMEs, 1% of total available
space in government offices and structures and .5% in private malls, supermarkets,
shopping centers, among others, measuring of at least 5,000 sqm.

5. Allocating of at least 20% of private mall’s totable rentable space and 20% discount on

their rental rates,


By providing these relief measures to qualified MSMEs, the government is also ensuring

their growth and continued employment of millions of Filipinos.

In view of the foregoing reasons, the approval of this bill is earnestly sought

YAN B. REVILLA
Representative
AGIMAT Partylist



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

Nineteenth Congress
First Regular Session

HOUSE BILL NO. 117 8

Introduced by Honorable Bryan B. R¢

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

(MSMEs)”

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

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

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

SNA”

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

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



~a) duly registered with the appropriate agencies as presently provided by law: Provided,
That in the case of micro enterprises as defined herein, registration with the office of
the municipal or city treasurer shall be deemed sufficient compliance with this
requirement;

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

“THE TOTAL COST FOR THE ISSUANCE OF ALL PERMITS, LICENSES,
CERTIFICATIONS, AND OTHER SIMILAR REQUIRED DOCUMENTATION
FOR THE CONDUCT OF BUSINESS FOR REGISTERED MICRO ENTERPRISES,
SHALL NOT EXCEED FIVE HUNDRED PESOS (P500.00). FOR

REGISTERED SMALL ENTERPRISES, THE TOTAL COST SHALL NOT
EXCEED FIVE THOUSAND PESOS (P5,000.00) FOR A PERIOD OF FIVE (5)
YEARS.

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

“[Eligible MSMEs shall 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 NATIONAL GOVERNMENT, ITS BUREAUS,
OFFICES AND AGENCIES SHALL ALLOCATE AT LEAST TEN PERCENT (10%)
OF ALL ITS PROCUREMENT OPPORTUNITIES FOR GOODS AND SERVICES TO
ELIGIBLE MSMEs IN ACCORDANCE WITH THE PROVISIONS OF REPUBLIC
ACT NO. 9184, OTHERWISE KNOWN AS THE ‘GOVERNMENT PROCUREMENT
REFORM ACT”, AND ITS IMPLEMENTING RULES AND REGULATIONS.

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

“DULY REGISTERED MICRO AND SMALL ENTERPRISES SHALL BE
ENTITLED TO A DISCOUNT OF AT LEAST TWENTY PERCENT (20%) ON
SHIPPING AND DELIVERY FEES FOR THEIR PRODUCTS AND RAW MATERIALS,
AS WELL AS FOR MAILING, FREIGHT AND OTHER SIMILAR SERVICES
PROVIDED BY EITHER PUBLIC OR PRIVATE COURIERS.


“GOVERNMENT BUILDINGS, STRUCTURES AND OPEN AREAS, INCLUDING
PUBLIC MARKETS, WHETHER WET OR DRY, AIRPORTS,

SEA PORTS, FISH PORTS, PARKS, ZOOS, CONVENTION CENTERS,
ENTERTAINMENT CENTERS, TOURISM CENTERS, SCHOOLS, SCHOOL
CAMPUSES, AND OTHER SIMILAR STRUCTURES OR AREAS SUITABLE FOR

SELLING OR MARKETING, WHETHER PERMANENT OR
TEMPORARY, THAT CAN BE USED AS SELLING AREAS, SHALL GIVE AN
AUTHORIZED MSME STORE FREE SPACE MEASURING AT LEAST ONE
PERCENT (1%) OF THE TOTAL SPACE AVAILABLE THEREIN.

“PRIVATE MALLS, SUPERMARKETS, SHOPPING CENTERS,
COMMERCIAL SELLING ESTABLISHMENTS, STRUCTURES, OR AREAS WITH A
SELLING AREA, WHETHER PERMANENT OR TEMPORARY, MEASURING AT
LEAST FIVE THOUSAND SQUARE METERS (5,000 SQM), INCLUDING COMMON
ARFAS, BUT EXCLUDING PARKING SPACES AND DRIVEWAYS, SHALI. GIVE
FREE SPACE OR AREA EQUIVALENT TO ONE HALF OF ONE PERCENT (0.5%) OF
THE SAID SELLING AREA FOR EVERY FIVE THOUSAND SQUARE METERS (5,000
SQM) OF SELLING AND COMMON SPACE, TO ANY AUTHORIZED MSME STORE.
AS USED IN THIS ACT, “FREE SPACE” SHALL MEAN SPACE THAT MAY BE USED
FOR SELLING PURPOSES WITHOUT NEED FOR THE PAYMENT = OF RENT,
GOODWILL FEES, ROYALTIES, COMMISSION, PERCENTAGES ON SALES,
NOR ANY OTHER SIMILAR SCHEME.

“THE MSMED COUNCIL OF THE CONCERNED Ciry,

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

1, ONE TOWN ONE PRODUCT (OTOP) STORE OR GO LOKAL! STORE OF THE
DEPARTMENT OF TRADE AND INDUSTRY;

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

3. A LOCAL MICRO OR SMALL ENTERPRISE STORE.

“ONCE AN MSME STORE IS IN PLACE, REMOVAL OR REPLACEMENT
SHALL NOT BE ALLOWED EXCEPT FOR VALID CAUSE AND AFTER DUE
PROCESS.

“THE APPROVAL AND THE REMOVAL OF THE MSME STORE THAT WILL BE
GIVEN FREE SPACE SHALL BE REPORTED BY THE MSMED COUNCIL OF THE
CONCERNED CITY, MUNICIPALITY OR BARANGAY TO THE CONGRESSIONAL


OVERSIGHT COMMITTEE ON MICRO, SMALL AND MEDIUM ENTERPRISE
DEVELOPMENT.

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

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

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

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

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

~c) Coordination of government efforts Government efforts shall be coordinated to
achieve coherence in objectives. All appropriate offices, particularly those under the
Departments of Trade and Industry, Finance, Budget and Management, Agriculture,
Agrarian Reform, Environment and Natural Resources, Labor and Employment,
Transportation [and Communications], INFORMATION AND COMMUNICATIONS.
TECHNOLOGY, Public Works and Highways, Science and Technology, Interior and
Local Government, and Tourism as well as the National Economic and Development
Authority, Philippine Information Agency, SECURITIES AND EXCHANGE
COMMISSION and the Bangko Sentral ng Pilipinas, through their national, regional and
provincial offices shall, to the best of their efforts and in coordination with local
government units, provide the necessary support and assistance to MSMEs. THE
DEPARTMENT OF TRADE AND INDUSTRY SHALL BE THE LEAD AGENCY
THEREFOR.

Sete


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

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

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

“SEC. 7, Micro, Small and Medium Enterprise Development (MSMED) Council. ~The
existing Small and Medium Enterprise Development Council, which was created by
Republic Act No. 6977, as amended [by Republic Act No. 8289}, shall be strengthened to
effectively spur the growth and development of

MSMES throughout the country, and to carry out the policy declared in this Act and shall now
be known as the Micro, Small and Medium Enterprise Development (MSMED) Council. The
Council shall be attached to the Department of Trade and Industry and shall be constituted
within sixty (60) days after the approval of this Act.

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

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

follows:

“SEC. 7-A. Composition of the Micro, Small and Medium Enterprises Development
(MSMED) Council. — The members of the Council shall be the following:

“(a) The Secretary of Trade and Industry as Chair,
“(b) The Secretary of Agriculture;

“(c) The Secretary of the Interior and Local Government,
“(D) THE SECRETARY OF FINANCE;

“{(d)] (E) Three (3) representatives from the MSME sector, [to represent Luzon,
Visayas and Mindanao, with at least one (1) representative from the microenterprise sector]
TO BE DESIGNATED BY A NATIONAL ORGANIZATION REPRESENTING AND
DOMINATED BY MSMEs; AND

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

National Youth Commission; and]


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

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

“(a) The Secretary of Science and Technology;

“(b) The Governor of the Bangko Sentral ng Pilipinas;

“(C) THE COMMISSIONER OF THE SECURITIES AND EXCHANGE

COMMISSION,

“[(c)] (D) The President of the Land Bank of the Philippines;

“[(d)] (E) The President of the Development Bank of the Philippines,

“[(e)] (F) The Director General of the National Economic and Development Authority;

“(G) THE EXECUTIVE DIRECTOR OF THE COOPERATIVE DEVELOPMENT
AUTHORITY;

(H) A REPRESENTATIVE OF A NATIONAL ORGANIZATION REPRESENTING
AND DOMINATED BY MSMEs;

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

“{(g)] (1) A representative from the private banking sector to serve [alternatively]
ALTERNATELY between the {c]Chamber of [t]Thrift (b]Banks, and the Rural Banker’s
Association of the Philippines (RBAP);

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

“[G)} (L) A representative of the University of the Philippines-Institute for
Small Scale Industries (UP-ISS1); [and]

“[()] (M) The President of the Credit Information Corporation[.]:

“(N) ONE (1) REPRESENTATIVE FROM THE WOMEN SECTOR DESIGNATED BY
‘THE PHILIPPINE COMMISSION ON WOMEN;

“(O) ONE (1) REPRESENTATIVE FROM THE YOUTH SECTOR
DESIGNATED BY THE NATIONAL YOUTH COMMISSION, AND.

(P) A REPRESENTATIVE FROM NONSTOCK SAVINGS AND LOAN
ASSOCIATIONS DESIGNATED BY THE ALLIANCE OF NON-STOCK 3 SAVINGS
AND LOAN INSTITUTIONS, INC. (ANSLI).

“eee”

SEC. 7, Section 7-B of the same Act, as amended, is hereby further amended to read 6 as follows:
“SEC. 7-B. Powers and Functions. — A. The MSMED Council shall have 8 the following
powers, duties and functions:

*esony

“d) To review the existing policies of government agencies that would affect the growth
and development of MSMEs and recommend changes to the President and Congress
through the Committee on Economic Affairs of the Senate and the Committee on
{Small Business and Entrepreneurship] MICRO, SMALL AND MEDIUM


ENTERPRISE Development of the House of Representatives, whenever deemed
necessary. This shall include efforts to 16 simplify rules and regulations, as
well as review of the applicability and relevance of procedural and documentary
requirements in the registration, financing, and other activities relevant to MSMEs
the result shall be included in the annual report to be submitted to Congress;

XXX;

“h) To promote the productivity and viability of MSMEs IN DTT’S TOP PRIORITY
INDUSTRIES FOR DEVELOPMENT by way of directing [and/Jor 23 assisting
relevant government agencies and institutions at the national, 24 regional and
provincial levels towards the:

“XXX:

12) Through appropriate government agencies

XX,

“f) Set-up new MSME NEGOSYO centers and revitalize already 29 established
MSME NEGOSYO centers to provide MSMEs in the 30 regions easier access to
services such as the following:

“xxx.”

“B. ADDITIONAL FUNCTIONS OF THE MSMED COUNCIL. — AS 33 PROVIDED
FOR IN SECTION 10 OF REPUBLIC ACT NO. 10644, 34 OTHERWISE KNOWN AS
THE “GO NEGOSYO ACT”,THE MSMED 35 COUNCIL SHALL HAVE THE
FOLLOWING ADDITIONAL FUNCTIONS: “(A) COORDINATING AND
OVERSIGHT BODY FOR THE MSME NEGOSYO CENTER. - THE MSMED
COUNCIL, THROUGH THE DTI, SHALL ACT AS THE COORDINATING AND
SUPERVISING BODY FOR ALL THE AGENCIES INVOLVED IN THE
ESTABLISHMENT AND OPERATION OF THE MSME NEGOSYO CENTERS.
FURTHER, THE MSMED COUNCIL SHALL MONITOR AND ASSESS THE
PROGRESS OF THE MSME NEGOSYO CENTERS, WHICH SHALL BE INCLUDED
IN ITS ANNUAL REPORT SUBMITTED TO THE CONGRESS;

“(B) PROVISION OF A COMPLIANCE GUIDE, — FOR EACH RULE OR
GROUP OF RELATED RULES ISSUED BY ANY GOVERNMENT AGENCY FOR
COMPLIANCE BY MSMES, THE COUNCIL SHALL PUBLISH COMPLIANCE
GUIDELINES WHICH SHALL BE WRITTEN IN PLAIN LANGUAGE OR IN THE
LOCAL DIALECT, IF NECESSARY. “THE COUNCIL SHALL PREPARE
SEPARATE COMPLIANCE GUIDES COVERING GROUPS OR CLASSES OF
SIMILARLY AFFECTED MSMES AND SHALL COOPERATE WITH INDUSTRY
ASSOCIATIONS TO DEVELOP AND DISTRIBUTE SUCH COMPLIANCE
GUIDES. THE PUBLICATION OF EACH COMPLIANCE GUIDE SHALL
INCLUDE THE POSTING OF THE GUIDE IN A CONSPICUOUS LOCATION ON
THE WEBSITE OF THE AGENCY, AND DISTRIBUTION OF THE GUIDE TO
KNOWN INDUSTRY CONTACTS, SUCH AS SMALL ENTITIES,
ASSOCIATIONS OR INDUSTRY LEADERS AFFECTED BY THE RULE. THE


ISSUING GOVERNMENT AGENCY SHALL PUBLISH AND DISSEMINATE THE,
COMPLIANCE RULES WITHIN NINETY (90) DAYS FROM THE DATE OF
ISSUANCE;

“(C) CONDUCT OF RESEARCH ON WOMEN ENTREPRENEURSHIP. — THE,
COUNCIL SHALL CONDUCT RESEARCH TO SUPPORT WOMEN
ENTREPRENEURSHIP INCLUDING ENTREPRENEURIAL BEHAVIOR,
BARRIERS, PARTICIPATION AND CESSATION RATES — DISCRIMINATORY
PRACTICES AND CONTRIBUTION TO THE NATIONAL ECONOMY AND
GROWTH;

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

“(E) DEVELOPMENT OF ENTREPRENEURIAL EDUCATION AND TRAINING. --

THE MSMED COUNCIL SHALL DEVELOP, IN COORDINATION WITH THE

DEPARTMENT OF EDUCATION, TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT AUTHORITY, AND COMMISSION ON HIGHER EDUCATION. A
COURSE CURRICULUM OR TRAINING PROGRAM IN ENTREPRENEURSHIP THAT
WILL PROMOTE ENTREPRENEURIAL CULTURE AND COMPETENCE.
ENTREPRENEURSHIP SHALL BE INTEGRATED IN THE CURRICULUM OF
EDUCATIONAL AND TRAINING INSTITUTIONS IN ALL LEVELS.

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

“SEC. 7-C. CITY, MUNICIPALITY, AND BARANGAY MSMED COUNCIL. -
THERE SHALL BE CREATED A MSMED COUNCIL IN EVERY LOCAL
GOVERNMENT UNIT WHICH SHALL HAVE THE AUTHORITY TO PROPOSE
POLICIES THAT ARE GEARED TO ASSIST MSMEs INTHE AREAS
OF PRODUCTIVITY ENHANCEMENT, MARKETING, ACHIEVING

SUSTAINABILITY BY EXTENDING CREDIT TO CUSTOMERS, AND
IMPLEMENTING EFFICIENT LOAN COLLECTION SYSTEMS, AMONG OTHER
STRATEGIES.

“THE LOCAL MSMED COUNCIL, IN THE CASE OF A CITY OR MUNICIPALITY,
SHALL BE COMPOSED OF THE CITYOR MUNICIPAL BUSINESS PERMIT AND.
LICENSING OFFICER AS CHAIRPERSON, THE PRESIDENT OF THE ASSOCIATION
OF BARANGAY CAPTAINS, THE PRESIDENT OF THE SANGGUINIANG
KABATAAN FEDERATION, THE TOURISM OFFICER, AND THE CITY
ORMUNICIPAL AGRICULTURIST OR THE CITY PLANNING OFFICER.


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

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

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

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

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

en

“3) to assist the Council in coordinating and monitoring MICRO, small and
medium enterprise policies and programs and activities of all government agencies
with respect to MICRO, small and medium enterprises,

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

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

“SEC. 11. Creation of THE Small Business (Guarantee and Finance] Corporation. - There
is hereby created a body corporate to be known as the Small Business [Guarantee and
Finance] Corporation, hereinafter referred to as the [Small Business Corporation (SB
Corporation)] SB CORPORATION, which shall be charged with the primary responsibility
of implementing comprehensive policies and programs to assist MSMEs in all areas,
including but not limited to finance and information services, training and marketing.”

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


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

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

“b) The Secretary of Finance;
“C) THE PRESIDENT OF THE GOVERNMENT SERVICE INSURANCE

SYSTEM (GSIS);
“D) THE PRESIDENT OF THE SOCIAL SECURITY SYSTEM (SSS);

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

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

“[e)]G)The president of the SB Corporation as ex-officio member and to serve as vice
chairman of the Board.

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

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

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

“XxX x; and

“f) [Notwithstanding the provisions of Republic Act No, 6758 and Compensation
Circular No, 10, Series of 1989 issued by the Department of Budget and Management,
the Board shall have the authority to p]Provide for the organizational structure, [and]
staffing pattern [of SB Corporation and to extend to the employees and personnel
thereof salaries, allowances and fringe benefits similar to those extended to and
currently enjoyed by employees and personnel of other government financial
institutions.] AND COMPENSATION OF EMPLOYEES AND PERSONNEL OF


THE SB CORPORATION, FOR SUBMISSION TO THE GOVERNANCE
COMMISSION FOR GOCCs.

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

“SEC. 11-B. Corporate Structure and Powers. - “A, The SB Corporation shall:
XXX,

“B. For this purpose, the SB Corporation [subject to compliance with the rules and
regulations to be issued by the Bangko Sentral ng Pilipinas (BSP) and the Securities and
Exchange Commission,] shall have the following functions and duties:

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

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

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

“XXX

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

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

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

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

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


“SEC. 11-C. STRATEGIC MANAGEMENT OF THE SB CORPORATION. — THE

BOARD OF THE SB CORPORATION, THROUGH ITS
CHAIRPERSON, SHALL BE FULLY RESPONSIBLE AND ACCOUNTABLE FOR
THE PERFORMANCE OF THE CORPORATION’S MANDATE. TO ENSURE
THIS, THE BOARD SHALL BE CONSTITUTED AS A MANAGING BOARD, LED
BY ITS CHAIRPERSON, TO CONCEPTUALIZE THE STRATEGIC PLANS AND
POLICIES OF THE CORPORATION.

“THE SB CORPORATION SHALL ADOPT A BALANCED SCORECARD
MANAGEMENTAPPROACH, SUBJECT TO THE REVIEW AND
APPROVAL OF THE GOVERNANCE COMMISSION FOR GOCCs, TO ENABLE IT
TO MANAGE ITS FINANCIAL PERFORMANCE WHILE PURSUING ITS PUBLIC
POLICY OBJECTIVES OF SUPPORTING MICRO, SMALL AND MEDIUM
ENTERPRISES DEVELOPMENT.”

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

“SEC. 12. Capitalization and Funding of the SB Corporation. - The SB Corporation shall
have an authorized capital stock of Ten billion pesos (P10,000,000,000.00). The initial
capital of One billion pesos (P1,000,000,000,00) shall be established from a pool of funds to
be contributed _ in the form of equity investments in common stock by the Land Bank of the
Philippines (LBP), the Development Bank of the Philippines (DBP), in the amount of Two
hundred million pesos (P200,000,000.00) each. The Social Security System (SSS) and the
Government Service Insurance System (GSIS) shall also set aside Two hundred million pesos
(P200,000,000.00) each for the SB Corporation. Authorized capital stock of the [s]Small
{b]Business (c]Corporation shall be divided into 80,000,000 common shares and 20,000,000
preferred shares with a par value of One hundred pesos (P100.00) per share: Provided, That
the common shares which have been issued, including those issued against the assets of the
KKK Guaranty Fund consolidated under the [s]Small [b]Business [c]Corporation by virtue of
Executive Order No. 233, Series of 2000 and Executive Order No. 19, Series of 2001 and
including those already subscribed, shall form part of the capitalization of the corporation:

Provided, further, That holders of preferred shares issued under Republic Act No. 6977, as
amended, shall have the option to convert the same into common shares. Additional equity
funding shall come from trust placements of excess and unused funds of existing government
agencies, bilateral and multilateral official development assistance funds, subscriptions from
government owned or controlled corporations AND THE NATIONAL GOVERNMENT
THROUGH THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM), and
investments of private financial institutions and corporations: Provided, finally, That any
investment from the private sector shall only be in the form of preferred shares.

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

SEC. 15. Section 13 of the same Act, as amended, is hereby deleted.


“[SEC. 13. The SB Corporation shall be subject to the supervision and examination
of the Bangko Sentral ng Pilipinas taking into consideration its developmental
objectives.” ]

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

“SEC. [14]13. Venture Capital and Micro Finance Trust Fund. The SB
Corporation may set aside an amount of money to encourage the setting up of a venture
capital and micro finance trust fund for the purpose of promoting AVAILABLE
business opportunities [available] to THE MSME sector. The Venture Capital Fund
shall be used mainly for venture capital finance __especially in technology-oriented
industries. The micro finance trust fund shall be used to provide collateral-free fixed
and working capital loans to micro and small enterprises run by those emerging out of
poverty. THE INITIAL AMOUNT OF AT LEAST TEN PERCENT (10%) OF THE
EQUITY CONTRIBUTION OF THE NATIONAL GOVERNMENT TO THE
CAPITALIZATION OF THE SMALL BUSINESS CORPORATION, NOT TO
EXCEED FIVE HUNDRED MILLION PESOS (P500,000,000.00), SHALL BE
APPROPRIATED TO FUND THE VENTURE CAPITAL AND MICRO FINANCE
TRUST FUND.”

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

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

“Compliance of this provision shall be:

a) actual extension of loans to eligible MSMEs; or

oxx x; oF

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

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



ADDING ACTIVITIES INVOLVED IN BRINGING A PRODUCT TO FINAL.
CONSUMERS.

“The Bangko Sentral ng Pilipinas AND THE SECURITIES AND EXCHANGE,
COMMISSION, IN CONSULTATION WITH THE MSMED COUNCIL AND THE
DEPARTMENT OF TRADE AND INDUSTRY, shall formulate rules for the 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
provisions: Provided, further, That the Bangko Sentral ng Pilipinas AND THE

SECURITIES AND EXCHANGE COMMISSION, IN CONSULTATION WITH ALL
STAKEHOLDERS, shall establish [an] A MEANINGFUL incentive [program] SYSTEM to
encourage [lending to micro, small and medium industries beyond the mandatory credit
allocation to said enterprises,] COMPLIANCE WITH THIS PROVISION, such as possible
reduction in bank's reserve requirement{.}: PROVIDED, FINALLY, THAT THE BANGKO
SENTRAL NG PILIPINASAND THE SECURITIES AND EXCHANGE COMMISSION
SHALLALIGN THEIRREGULA TIONS ON THE PENALTIES FOR BANKS AND OTHER
ENTITIES, FOR NONCOMPLIANCE WITH THE PROVISION FOR MANDATORY
LENDING

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

“ALL BANKS SHALL PROVIDE ACCESS TO DEPOSIT ACCOUNTS, SUCH AS
SAVINGS, CHECKING AND DEBIT ACCOUNTS, TO REGISTERED MSMEs,
FINANCIAL TECHNOLOGY SHALL BE PROVIDED TO MSMEs TO ENSURE
THEIR FINANCIAL INCLUSION.

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

“FOR EFFICIENT IMPLEMENTATION AND OPERATION, COOPERATIVES
EXCEPT COOPERATIVE BANKS AND INSURANCE COOPERATIVESSHALL BE


UNDER THE SOLE SUPERVISION AND EXAMINATION OF THE COOPERATIVE
DEVELOPMENT AUTHORITY (CDA); ALL OTHER FINANCIAL ENTITIES,
CORPORATIONS AND FINANCIAL INTERMEDIARIES, SUCH AS NON-
GOVERNMENT ORGANIZATIONS, FINANCING COMPANIES, NON-STOCK
SAVINGS AND LOAN ASSOCIATIONS, MICROFINANCE NON-GOVERNMENT
ORGANIZATIONS, AND LENDING INVESTORS SHALL BE UNDER THE
SECURITIES AND EXCHANGE COMMISSION (SEC); BANKS SHALL BE UNDER THE
BANGKO SENTRAL NG PILIPINAS (BSP); AND INSURANCE COMPANIES SHALL BE.
UNDER THE INSURANCE COMMISSION (IC). FOR CLARITY, COOPERATIVE
BANKS SHALL BE UNDER THE SUPERVISION AND EXAMINATION OF THE CDA
AND BSP, WHILE INSURANCE COOPERATIVES SHALL BE UNDER THE
SUPERVISION AND EXAMINATION OF THE CDA AND INSURANCE
COMMISSION (IC).

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

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

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

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

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

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

“SEC. [19}18. Penal Clause. — The Bangko Sentral Ng Pilipinas IN THE CASE OF
BANKS, AND THE SECURITIES AND EXCHANGE COMMISSION IN THE.
CASE OF NON-BANK FINANCIAL INTERMEDIARIES, shall impose
administrative sanctions and other penalties on the lending institutions for non{-
Jcompliance with THE provisions of this Act [including a fine of not less than Five


hundred thousand pesos (P500,000.00)}. THE MINIMUM AMOUNT FOR THE
PENALTY FOR NONCOMPLIANCE IS FIVE HUNDRED THOUSAND PESOS
(P500,000.00) AND THE MAXIMUM PENALTY IS FIVE MILLION PESOS
(P5,000,000.00), IN PROPORTION TO THE BANK’S OR OTHER ENTITY'S
LEVEL OF COMPLIANCE: PROVIDED, THAT IN CASE OF FAILURE OF THE
MANDATED ENTITIES TO COMPLY WITH THE MANDATORY CREDIT
ALLOCATION SET OUT IN SECTION 14 OF THIS ACT, AN ADDITIONAL
PENALTY EQUIVALENT TO TWENTY PERCENT (20%) PER ANNUM OF THE
TOTAL AMOUNT OF NON-COMPLIANCE SHALL BE IMPOSED.

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

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

SEC. 21. A new section, numbered Section 19, is hereby inserted after re-numbered Section
18 of the same Act, as amended, to read as follows:

“SEC. 19. OTHER VIOLATIONS. — EXCEPT FOR SECURITIES COVERED
UNDER THE SECURITIES REGULATIONS CODE OR REPUBLIC ACT NO.
8799, ENTITIES SHALL SECURE THE NECESSARY APPROVAL OF THE
SECURITIES AND EXCHANGE COMMISSION PRIOR TO RECEIVING
INVESTMENTS AS WELL AS GIFTS, ITEMS OR OTHER COMMODITIES, EITHER
IN THE FORM OF CASH OR ITS EQUIVALENT CASH VALUE IN
CONSIDERATION OF RETURN OF PROFIT, BENEFIT, OR BLESSINGS COMING

FROM MORE THAN TWENTY (20) INDIVIDUALS, OR SUFFER THE
PENALTY OF THIRTY (30) TO ONE HUNDRED EIGHTY (180) DAYS
IMPRISONMENT, OR A FINE OF NOT LESS THAN TEN THOUSAND PESOS
(P10,000.00) BUT NOT EXCEEDING ONE HUNDRED THOUSAND PESOS
(P100,000.00) OR BOTH, AT THE DISCRETION OF THE COURT.

“ANY PERSON, WHETHER NATURAL OR JURIDICAL, WHO FAILS TO
ACQUIRE THE APPROVAL OF THE FOOD AND DRUGS AUTHORITY (FDA)
AND THE DEPARTMENT OF TRADE AND INDUSTRY (DTI) FOR SELLING,
MARKETING, AND DISTRIBUTING PRODUCTS AND SERVICES THAT ARE
REGULATED BY THE FDA SHALL SUFFER THE PENALTY OF THIRTY (30)


DAYS TO ONE HUNDRED EIGHTY (180) DAYS IMPRISONMENT, OR A FINE OF
NOT LESS THAN TEN THOUSAND PESOS (10,000.00) BUT NOT EXCEEDING
ONE HUNDRED THOUSAND PESOS (P100,000.00) OR BOTH, AT THE
DISCRETION OF THE COURT.”

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

SEC. 23. Separability Clause. ~ The provisions of this Act are hereby declared to be separable.
If any provision of this Act shall be held unconstitutional, the remainder of this Act not otherwise
affected shall remain in full force and effect.

SEC. 24. Repealing Clause. —Section 22 of Republic Act No. 8367 is hereby repealed. All
laws, decrees, proclamations, issuances, or ordinances that are contrary to or —_ inconsistent with
the provisions of this act are hereby amended, repealed or modified accordingly.

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

Approved,