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RECEIVED
Republic of the Philippines 2 op, AUG 27
House of Representatives

Quezon City, Metro Manila
EIGHTEENTH CONGRESS
First Regular Session

4174
H.B. No.

Introduced by Representative TEODORICO “NONONG" T. HARESCO, JR.

AN ACT
EXPANDING THE COVERAGE OF MICRO ENTERPRISES AS BENEFICIARIES
OF THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES,
AMENDING FOR THE PURPOSE REPUBLIC ACT NOUMBER 6977, AS
AMENDED, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Micro, small and medium scale enterprises (MSMEs) compose 99.7 percent of the
business enterprises operating in the Philippines. Of the total number of MSMEs, about
92% are micro enterprises. MSMEs also accounted for 35.7% of Gross Value-Added
(GVA) to the economy. It is the accepted view that MSMEs still has immense potential
for GVA growth such as being exhibited by their counterparts in Indonesia (53.28%),
Vietnam (39%) and Thailand (37.8%).

Though it is recognized that MSMEs have the potential for more employment
generation and economic growth that can help provide a self-sufficient industrial
foundation for the country, its full potential as a sector is yet to be realized because of stiff
competition capital with the large-scale enterprises.

This bill seeks to maximize the untapped potential of the MSME sector by
redefining the asset value thresholds of the Micro, Small and Medium Enterprise
categories in order to by enhance government support, give incentives and grant benefits
strengthening participation of the private sector.

In view of the importance of micro, small and medium scale enterprises and of
their contribution to our economy, the passage of this bill is earnestly sought.

HON. TEODORICO “NONQN$:” T. HARESCO, JR.
Representabide

24 District, Province of Aklan


EIGHTEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES
First Regular Session

4174
H.B. No.

Introduced by Representative TEODORICO “NONONG" T. HARESCO, JR.

AN ACT
EXPANDING THE COVERAGE OF MICRO ENTERPRISES AS BENEFICIARIES
OF THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES,
AMENDING FOR THE PURPOSE REPUBLIC ACT NOUMBER 6977, AS
AMENDED, AND FOR OTHER PURPOSES:

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

SECTION 1. Section 3 of the Magna Carta for Micro, Small and Medium Enterprises of
Republic Act Number 6977, as amended, is hereby further amended to read as follows:

“Sec. 3. Micro, Small and Medium Enterprises (MSMEs) as Beneficiaries,
- MSMEs shall be defined as 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 equipmentare situated, must have value
falling under the following categories:

micro: not more than 5,000,000
small: MORE THAN B35,000,000 TO 220,000,000
medium: MORE THAN P20,000,000 TO #100,000,000.
"XXX,

“XXX.

SEC. 2. Implementing Rules and Regulations. - Within ninety (90) days from effectivity
of this Act, the Department of Trade and Industry, in coordination with the Micro, Small
and Medium Enterprise Development Council, shall promulgate the rules and

regulations to effectively implement the provisions of this Act.

SEC. 3. Separability Clause. ~ If any provisions of this Act or the application of such
provision to any person or circumstances be declared unconstitutional, the remainder of


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this Act or the application of such provision to other person or circumstances shall not be
affected by such declaration.

SEC. 4. Repealing Clause. - All laws, decrees, proclamations, executive orders, rules and
regulations or other issuances or parts thereof contrary to inconsistent with the
provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 5. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in the
Official or in at least two (2) national newspapers of general circulation.

Approved,