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SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriquez, Jr. -

House Bill No.8.3 15
EXPLANATORY NOTE
Section 1, Article XV (The Family) of the Constitution provides:

“The State recognizes the Filipino family as the foundation of
the nation. Accordingly, it shall strengthen its solidarity and actively
promote its total development.”

This bill seeks the establishment of a Magna Carta for Kalakalan Pampamilya
which shall grant family-owned businesses certain incentives and benefits.

The extreme poverty of majority of the Filipinos is an issue of national
concem which the government should immediately address. If government wants to
minimize poverty and hasten economic development, priority programs must be
geared towards the development of the family.

The main purpose of the Magna Carta for Kalakalan Pampamilya is to
encourage the family members to venture into business enterprise in order to provide
work and source of livelihood for the family members. It will likewise augment the
income of family members which can help provide for the basic human necessities.
The proposed measure also seeks to respond to the national effort of alleviating
poverty in the country and thereby accelerate economic development.

In view of the foregoing, approval of this bill is earnestly recommended,

RUFUS B. RODRIGUEZ

MAXIMO B! RODRIGUEZ, JR.


SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No, 83.1.5

AN ACT
ESTABLISHING THE MAGNA CARTA FOR KALAKALAN PAMPAMILYA,
PROVIDING INCENTIVES AND BENEFITS THEREFOR AND FOR OTHER
PURPOSES

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

SECTION 1. Short Title. - This Act shall be known as the “Magna Carta for
Kalakalan Pampamitya.”

SEC. 2. Declaration of Policy. ~ It is hereby declared to be the policy
of the State to give priority to the family in the socio-economic development and
enhance the quality of life of every Filipino.

SEC. 3, Kalakalan Pampamilya. — Any family business enterprise with
employees of not more than twenty (20) and with assets of not more than Five
Hundred Thousand Pesos (Php 500,000.00), at the time of registration, shall qualify
for the incentives and benefits provided for under this Act.

SEC. 4 Kalakalan Pampamilya Office. - The Kalakalan Pampamilya
Office, referred to as the Office, is hereby created under the Department of Trade
and Industry to exercise the following functions:

a) Effectively facilitate the financial assistance to qualified family
business enterprise;

b) Assist the designated banks in the collection of payments of loan
granted to family business enterprises;

c) Monitor and evaluate on a regular basis the status of the family
business enterprises which availed of the benefits and incentives under this Act,

d) Help family business enterprises achieve viability and success;

) __ Pursue appropriate measures to avail of foreign loans or grants; and

f) Provide such guidelines as may be necessary to carry out the
mandate of this Act.

SEC.5 Management Board. - The Office shall be governed by a
Management Board which shall be composed of the following

a) Representative of the Secretary of the Department of Trade and
Industry, as Chairman;

b) Representative from the Department of Science and Technology;

c) _ Representative from the Department of Finance;

d) __ Representative from the City Mayors’ League of the Philippines;

e) __ Representative from the Municipal Mayors’ League of the Philippines;
and


f) Three (3) private sector representatives from the trade and commerce
groups, from the labor groups and from the socio-civic groups, as members.

The private sector representatives of the Management Board shall be
appointed by the President of the Philippines within thirty (30) days from approval of
this Act.

The secretariat and the technical staff of the Management Board shall be
provided by the Department of Trade and Industry and supplemented by personnel,
as may be necessary, from other departments and agencies of the government.

SEC. 6. Registration. - To acquire a separate and distinct juridical
personality from the owners or members thereof, the Kalakalan Pampamilya
business enterprise shall register as provided under this Act. Upon such registration,
the family business enterprise can own, dispose of and encumber its properties and
enter into contracts on its own account, with the capacity to sue and be sued, and
transact business anywhere in the Philippines.

The registration fee of Five Hundred Pesos (Php 500.00) shall be paid to the
municipality or city where its principal place of office and business operations is
located.

SEC. 7 Benefits and Incentives. — All Kalakalan Pampamilya
business enterprise shall be exempted from all taxes, national or local, building
permit fees and other business taxes, except real property and capital gains taxes,
import duties and other taxes on imported articles. In addition, any and all income,
receipts and proceeds derived from the business operations of the Kalakalan
Pampamilya business enterprise shall be excluded from the computation of gross
income of the individual income tax of the business owner or members thereof

It shall be exempted from any and all government rules and regulations in
respect to assets, income, and other activities indispensably and directly utilized in,
proceeding from, or connected with the business enterprise.

The family business enterprise, however, shall pay the fee to the municipal or
city treasurer where they are registered, starting on their second year of operations,
based on the following schedule:

a) Those with net assets before financing amounting to not more than
‘One Hundred Thousand Pesos (Php 100,000.00) shall pay the fee of One Thousand
Pesos (Php 1,000.00) per annum;

b) Those with net assets before financing of not less than One Hundred
Thousand Pesos (Php 100,000.00) and not more than Two Hundred Fifty Thousand
Pesos (Php 250,000.00) shall pay the fee of Two Thousand Five Hundred Pesos
(Php 2,500.00) per annum;

c) Those with net assets before financing of not less than Two Hundred
Fifty Thousand Pesos (Php 250,000.00) and not more than Four Hundred Thousand
Pesos (Php 400,000.00) shall pay the fee of Four Thousand Pesos (Php 4,000.00)
per annum; and

d) Those with net assets before financing of not less than Four Hundred
Thousand Pesos (Php 400,000.00) and not more than Five Hundred Thousand
Pesos (Php 500,000.00) shall pay the fee of Five Thousand Pesos (Php 5,000.00)
per annum.

in the event the family business enterprise uses a brand name on its
products, such brand name shall first be registered with the Bureau of Trade
Regulation and Consumer Protection, through the Department of Trade and Industry
(DTI) provincial office.

SEC. 8 Local Development Council. — The local development
councils of the various local government units, shall receive all applications for the
establishment or additional funding of family business enterprises, within its area of


jurisdiction; evaluate and approve or disapprove all applications within thirty (30)
days from receipt thereof, endorse the applications to the Office for funding; and
assist designated banks to collect payments of loan granted to the family business
enterprises,

SEC. 9 Registration Fee. — Eighty percent (80%) of the registration
fee shall accrue exclusively to the municipality or city where the Kalakalan
Pampamilya is located, and shall be used for developmental projects approved by
the municipal or city council. Twenty percent (20%) will be remitted to the National
Treasury of the Philippines

SEC.10. Forfeiture of Exemptions and Benefits. - (a) In case of any
Violation of the provisions of this Act by the Kalekalan Pampamilya business
enterprise or by any of its officers and authorized representatives, all the exemptions
and benefits herein provided shall, after due notice and hearing, be forfeited and all
existing loans be paid in full

(b) The exemptions and other benefits provided in this Act shall apply for a
period not exceeding five (5) years from the date of the registration.

SEC.11.  Kalakalan Pampamilya Fund. — The Kalakalan Pampamilya
Fund hereinafter referred to as the Fund, is hereby created as a source of financial
assistance to all qualified family business enterprises.

The Fund shall be appropriated from the national budget, and supplemented
by funds from bilateral and multilateral sources which shall be negotiated and
arranged by the National Government to ensure adequacy of the Fund.

The Fund shall be deposited with and managed by the Development Bank of
the Philippines (DBP). Disbursements from the said Fund shall be made solely for
investments as equity, grants or loans, in favor of family business enterprises.

SEC.12. Cancellation of the License. — The license of Kalakalan
Pampamilya business enterprise shall, after due notice and hearing, be revoked and
cancelled upon the failure of the family business enterprise, without valid reasons, to
‘commence its operations within forty five (45) days from receipt of the license to
operate.

SEC. 13. Implementing Rules and Regulations. — The Secretary of
Trade and Industry shall, in consultation with the Secretaries of Finance, Labor and
the Interior and Local Government, formulate and prepare the necessary rules and
regulations to implement the provisions of this Act within one hundred twenty (120)
days after effectivity thereof.

The rules and regulations issued pursuant to this section shall take effect
fifteen (15) days after publication in a newspaper of general circulation or by any
other means of notification as the Secretary of Trade and Industry may deem
reasonably sufficient to inform interested parties of such issuance.

SEC. 14. _ Annual Report. — The Management Board shall submit to the
President and the Congress of the Philippines an annual report of its operations
accounting for the availment and use of the financial assistance including its
collection under this Fund

SEC. 15. Penalties. — Any person who shall divert the financial
assistance allocated under this Act shall, in addition to penalties imposed under
existing laws, be punished with imprisonment ranging from three (3) years to five (5)
years and a fine of Fifty Thousand Pesos (Php 50,000.00)


Any public officer or employee who shall, on his own or in connivance with
others, commit the act mentioned under the preceding paragraph shall be punished
with the maximum penalty imposed under the law in addition to perpetual
disqualification from public office.

Finally, if the offender is an alien, he shall be deported immediately without
further proceedings, after service of sentence.

SEC. 16. Appropriations. - There is hereby authorized to be
appropriated from the unappropriated funds of the Office of the President, the
amount of One Billion Pesos (Php 1,000,000,000.00) as initial capital of the
Kalakalan Pampamilya Fund.

The Management Board shall submit to the Office of the President the budget
needed for its operations for inclusion in the annual General Appropriations Act.

SEC.17. Repealing Clause. ~ All laws, decrees, orders, rules and
regulations, or parts thereof, inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 18. Effectivity Clause. — This Act shall take effect thirty (30) days
after its publication in two (2) national newspapers of general circulations.

Approved,