NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S. B. NO-12&2
of il)e iyrtn(o
•22 SEP-6 P4 *06
RJiCciVED BY.
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
PROVIDING FOR SUPPORT FOR THE GROWTH AND 
DEVELOPMENT OF BARANGAY MICRO BUSINESS ENTERPRISES 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9178, 
OTHERWISE KNOWN AS THE BARANGAY MICRO BUSINESS 
ENTERPRISES ACT OF 2002, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Micro-businesses comprise many existing enterprises in the Philippines. 
According to the Philippine Statistics Authority List of Establishments, there are 
977,670 micro-enterprises in the country in 2021, constituting 90.5% of all business 
enterprises in the country.1 They also generate a total of over 2.5 million jobs.2
Republic Act No. 9178, or the Barangay Micro Business Enterprises Act of 
2002, declared it the policy of the state to hasten the country's economic development 
by encouraging the formation and growth of barangay micro business enterprises 
(BMBEs) which effectively serve as seedbeds of Filipino entrepreneurial talents. The 
law recognizes this sector's role in economic growth and employment and ensures 
that establishments registered as BMBEs are provided with certain incentives such, 
as among others, tax exemptions, exemptions from the Minimum Wage Law, and 
priority lanes/windows for credit facilities with financial institutions.3 Despite these 
incentives, a relatively small number of micro businesses are registered as BMBEs. 
Based on the latest report of the Department of Trade and Industry (DTI) in 2018, there 
were only 28,531 businesses registered as BMBE since the DTI started accepting
1 January 6, 2022. More than 1.08 million Establishments Operated in 2021 which Generated Total Employment of 8.57 million 
(2021 Updating of the List of Establishments Preliminary Results). Retrieved from: https://psa.gov.ph/content/more-108-million- 
establishments-operated-2021-which-generated-total-employment-857-million (date last accessed; August 30, 2022).
2 2020 MSME Statistics Retrieved from: https://\www.dti.gov.ph/resources/msme-statistics/ (date last accessed: August 30, 2022)
3 CL registers highest number of barangay enterprises in 2017. Retrieved from: https://www.dti.gov.ph/regions/region-3/region- 
3-news/cl-registers-highest-number-of-barangay-enterprises-in-2017/ (date last accessed: August 30, 2022).


applications in January of 2016.4
Thus, a revisit of Republic Act No. 9178 is needed to ensure that its provisions 
are still relevant and reflect the present needs of the BMBE industry. Currently, BMBEs 
are still recovering from the effects of the pandemic and are still enduring further 
business shocks because of natural calamities, such as typhoons, and global 
economic events, such as the Russia-Ukraine conflict, unprecedented global inflation 
and rising fuel prices. Thus, amendments to the law, which aim to provide BMBEs with 
much needed support, concessions and incentives to register, are in order.
In view of the foregoing, the immediate passage of this bill is earnestly sought.
SENATOR JOEL VILLANUEVA
4 May 18, 2018. DTI encourages micro enterprises to avail of incentives under BMBE Law. Retrieved from: 
https://www.dti.gov.ph/archives/news-archives/dti-micro-entrep-bmbe-law/ (date last accessed: August 30, 2022)


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
of the rf? p ?t5!rp
*22 SEP-6 P4 *06
RliCEIVED BY;
S. B. No. 1282
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
PROVIDING FOR SUPPORT FOR THE GROWTH AND 
DEVELOPMENT OF BARANGAY MICRO BUSINESS ENTERPRISES 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9178, 
OTHERWISE KNOWN AS THE BARANGAY MICRO BUSINESS 
ENTERPRISES ACT OF 2002, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Section 2 of Republic Act No. 9178, otherwise known as the
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“Barangay Micro Business Enterprises Act of 2002” is hereby amended to read as
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follows:
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“Section 2. Declaration of Policy. - [It is hereby declared to be the policy
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of the State to hasten the country’s economic development by
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encouraging the formation and growth of barangay micro business
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enterprises which effectively serve as seedbeds of Filipino
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entrepreneurial talents, and integrating those in the informal sector with
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the mainstream economy, through the rationalization of bureaucratic
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restrictions, the active intervention of the government specially in the
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local level, and the granting of incentives and benefits to generate much-
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needed employment and alleviate poverty.] THE STATE RECOGNIZES
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THAT BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs),
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WHILE THE SMALLEST TYPE OF ALL ENTERPRISES, IS AMONG
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THE SIGNIFICANT ESTABLISHMENTS IN THE COUNTRY, AND IS
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ONE OF THE BIGGEST GENERATORS OF EMPLOYMENT. THUS, IT
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IS HEREBY DECLARED THE POLICY OF THE STATE TO SUPPORT,
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STRENGTHEN AND FACILITATE THE GROWTH OF BMBEs TO
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HELP THIS SECTOR CONTINUE TO FLOURISH AMIDST PUBLIC
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HEALTH EMERGENCIES, NATURAL 
CALAMITIES AND GLOBAL
22 
ECONOMIC SHOCKS.”


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SEC. 2. Section 4 of the Barangay Micro Business Enterprises Act of 2002 is 
hereby amended to read as follows:
“Section 4. Registration and Fees. - The Office of the Treasurer of each 
city or municipality shall register [the BMBE's] and PROMPTLY issue a 
Certificate of Authority, FREE OF CHARGE, TO ALL BMBES WITHIN 
ITS JURISDICTION UPON SUBMISSION OF PROOF OF TOTAL 
ASSETS, to enable the BMBE to avail of the benefits under this Act. Any 
such application shall be processed NOT LATER THAN FIVE [within 
fifteen (15)] working days upon submission of complete documents. 
Otherwise, the BMBEs shall be deemed registered. The Municipal or 
City Mayor may appoint a BMBE Registration Officer who shall be under 
the Office of the Treasurer. Local government units (LGUs) are 
encouraged to establish a One-Stop-Business Registration Center to 
handle the efficient registration and processing of permits/licenses of 
BMBEs. Likewise, LGUs shall make a periodic evaluation of the BMBEs’ 
financial status, AS WELL AS THE NUMBER OF JOBS IT 
GENERATES, for monitoring and reporting purposes.
[The LGUs shall issue the Certificate of Authority promptly and free of 
charge. However,] NOTWITHSTANDING ANYTHING TO THE 
CONTRARY, to defray the administrative costs of registering and 
monitoring the BMBEs, the LGUs may charge a fee not exceeding One 
Thousand Pesos (P1,000.00).
The Certificate of Authority shall be effective for a period of THREE (3)
[two (2)] years, renewable for ANOTHER [period o1] THREE (3) YEARS 
[two (2)] UPON [years for every renewal.] COMPLIANCE WITH THE 
REQUIREMENTS.
[As much as possible,] IN ALL CASES, BMBEs shall be subject to 
minimal bureaucratic requirements and reasonable fees and charges.”
SEC. 3. Section 5 of the Barangay Micro Business Enterprises Act of 2002 is 
hereby amended to read as follows:
“Section 5. Who are Eligible to Register. - Any person, natural or 
juridical, or cooperative, or association, having the qualifications as 
defined in Section 3(a) hereof may apply for registration as BMBE.
EACH LGU SHALL MAINTAIN AND CONTINUOUSLY UPDATE A 
DATABASE CONTAINING ALL REGISTERED BMBEs UNDER ITS 
JURISDICTION.”
SEC. 4. Section 7 of the Barangay Micro Business Enterprises Act of 2002 is 
hereby amended to read as follows:
“Section 7. Exemption from Taxes and Fees. - All BMBEs shall be 
exempt from tax for income arising from the operations of the enterprise.


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FIRST TIME BMBE REGISTRANTS SHALL, IN ADDITION, BE 
EXEMPT FROM LOCAL TAXES, FEES AND CHARGES FOR THE 
FIRST THREE (3) YEARS OF OPERATION SUBJECT TO SEMI­
ANNUAL SUBMISSION OF PROOF OF EMPLOYMENT GENERATED 
IN THE LOCALITY.
[The LGUs are encouraged either to reduce the amount of local taxes, 
fees and charges imposed or to exempt BMBEs from local taxes, fees 
and charges.]”
SEC. 5. Section 9 of Barangay Micro Business Enterprises Act of 2002 is 
hereby amended to read as follows:
“Section 9. Credit Delivery - Upon the approval of this Act, the Land 
Bank of the Philippines (LBP), the Development Bank of the Philippines 
(DBP), the SMALL BUSINESS CORPORATION (SB CORPORATION)
[Small Business Guarantee and Finance Corporation (SBGFC)], and the 
People's Credit and Finance Corporation (PCFC) shall set up a special 
credit window that will service the financing needs of BMBEs registered 
under this Act consistent with the Bangko Central ng Pilipinas (BSP) 
policies: rules and regulations. The Government Service Insurance 
System (GSIS) and Social Security System (SSS) shall likewise set up 
a special credit window that will serve the financing needs of their 
respective members who wish to establish a BMBE. The concerned 
financial institutions (FIs) encouraged to wholesale the funds to 
accredited private financial institutions including community-based 
organizations such as credit, cooperatives, non-government 
organizations (NGOs) and people's organizations, which will in turn, 
directly provide credit support to BMBEs.
All loans from whatever sources granted to BMBEs under this Act shall 
be considered as part of [alternative] THE OTHER MODES OF 
compliance to [Presidential Decree No. 717, otherwise known as the 
Agri-Agra Law,] REPUBLIC ACT NO. 11901, OTHERWISE KNOWN AS 
THE AGRICULTURE, FISHERIES, AND RUAL DEVELOPMENT 
FINANCING ACT OF 2022, AND SUCH OTHER APPLICABLE LAW 
PROVIDING A LIMIT FOR LOANS GRANTED TO MICRO, SMALL AND 
MEDIUM ENTERPRISES (MSMES) [, or to Republic Act. No. 6977, 
known as the Magna Carta for Small and Medium Enterprises, as 
amended]. For purposes of compliance with THE FOREGOING LAWS, 
[Presidential Decree No. 717 and Republic Act No. 6977, as amended,] 
loans granted to BMBEs under this Act shall be computed at TWO AND 
A HALF TIMES (2.5) [twice] the amount of the face value of the loans.
To minimize the risks in lending to the BMBEs, THE PHILIPPINE 
GUARANTEE CORPORATION (PHILGUARANTEE) [SBGFC and the 
Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) under 
the Department of Agriculture, in case of agribusiness activities,] shall 
set up a special guarantee window to provide the necessary credit 
guarantee to BMBEs under their respective guarantee programs.


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The LBP, DBP, PCFC, [SBGFC] SB CORPORATION, 
PHILGUARANTEE, SSS, AND GSIS[, and QUEDANCOR] shall 
annually report to the appropriate Committee of both Houses of 
Congress on the status of the implementation of this provision.
The BSP shall formulate the rules for the implementation of this 
provision and shall likewise establish incentive programs to encourage 
and improve credit delivery to the BMBEs.
TO FACILITATE THE GROWTH AND RECOVERY OF BMBEs, A 
BMBE REGISTERED UNDER THIS ACT SHALL BE ENTITLED TO 
INTEREST-FREE LOANS FROM THE CREDIT WINDOW OF THE 
LBP, DBP, SMALL BUSINESS CORPORATION AND PCFC; 
PROVIDED, THAT THE LOAN AMOUNT SHALL (I) NOT EXCEED 
ONE MILLION PESOS (P1,000,000.00), (II) NOT REQUIRE A 
COLLATERAL, AND (III) BE PAYABLE UP TO THREE (3) YEARS; 
PROVIDED, FURTHER, THAT IN THE EVENT THAT SUCH LOAN IS 
GRANTED TO ACCREDITED PRIVATE FINANCIAL INSTITUTIONS, 
INCLUDING COMMUNITY BASED ORGANIZATIONS SUCH AS 
COOPERATIVES, NGOS AND PEOPLE’S ORGANIZATIONS 
ENGAGED IN GRANTING CREDIT, THAT IN TURN RELEND SUCH 
AMOUNT TO BMBEs, ONLY THE LOAN GRANTED TO THE BMBE 
SHALL BE INTEREST-FREE AND ANY SUCH INTEREST 
FOREGONE BY THE PRIVATE FINANCIAL INSTITUTION SHALL BE 
DEDUCTED FROM THE INTEREST DUE ON ITS LOAN PROVIDED 
BY THE CONCERNED GOVERNMENT FINANCIAL INSTITUTION; 
PROVIDED, FINALLY, THAT IN ORDER TO PROPERLY IMPLEMENT 
THE PROVISION OF THIS SECTION, AN AMOUNT OF FIVE 
HUNDRED MILLION PESOS (P500,000,000) SHALL BE 
APPROPRIATED TO ANSWER FOR THE INTEREST SUBSIDY 
PROVIDED UNDER THIS ACT.”
SEC. 6. Section 10 of the Barangay Micro Business Enterprises Act of 2002 is 
hereby amended to read as follows:
“Section 10. Technology Transfer, Production and Management 
Training, and marketing Assistance. -
XXX
The Department of Trade and Industry (DTI), the Department of Science 
and Technology (DOST), the University of the Philippines Institute for 
Small Scale Industries (UP ISSI), Cooperative Development Authority 
(CDA), AND Technical Education and Skills Development Authority 
(TESDA)[, and Technology and Livelihood Resource Center (TLRC)] 
may avail of the said Fund for technology transfer, production and 
management training and marketing assistance to BMBEs.


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The DTI, in coordination with the private sector and non-government 
organization (NGOs), shall explore the possibilities of linking or 
matching-up BMBEs with small, medium and large enterprises and 
likewise establish incentives therefor. THE DTI, IN COORDINATION 
WITH THE DEPARTMENT OF INTERIOR AND LOCAL 
GOVERNMENT (DILG), SHALL ENACT PROGRAMS THAT PROVIDE 
BMBEs WITH MARKETING ASSISTANCE, SUCH AS, BUT NOT 
LIMITED, TO BUSINESS MATCHING ACTIVITIES, TRADE FAIRS, 
OVERSEAS MARKETING PROMOTIONS, AND BUSINESS 
DEVELOPMENT ACTIVITIES, INCLUDING ENTREPRENEURSHIP 
AND SKILLS DEVELOPMENT, AND OTHER RELATED ACTIVITIES.
THE DEPARTMENT OF SCIENCE AND TECHNOLOGY (DOST), IN 
COORDINATION WITH THE DILG AND OTHER RELEVANT 
GOVERNMENT AGENCIES, SHALL ALSO IMPLEMENT PROGRAMS 
GEARED TOWARDS PROVIDING BMBEs WITH APPROPRIATE 
TECHNOLOGY INTERVENTIONS WHICH CAN HELP IMPROVE 
THEIR PRODUCTION PROCESSES, ACCOUNTING SYSTEMS, AND 
OTHER AREAS OF BUSINESS OPERATIONS.
The DTI, in behalf of the DOST, UP ISSI, CDA, AND TESDA [and TLRC] 
shall be required to furnish the appropriate Committees of both Houses 
of Congress a yearly report on the development and accomplishments 
of their projects and programs in relation to technology transfer, 
production and management training and marketing assistance 
extended to BMBEs.”
SEC. 7. A new Section 10-A is hereby inserted to read as follows:
“SEC. 10-A. BMBE EDUCATION AND TRAINING. - THE DTI, IN 
COORDINATION WITH THE DEPARTMENT OF EDUCATION 
(DEPED), TECHNICAL EDUCATION AND SKILLS DEVELOPMENT 
AUTHORITY (TESDA), AND COMMISSION ON HIGHER EDUCATION 
(CHED), SHALL PROVIDE FREE TRAININGS, COURSES, AND 
OTHER DEVELOPMENT PROGRAMS FOR OWNERS AND 
EMPLOYEES OF REGISTERED BMBEs TO IMPROVE THEIR 
BUSINESS PRACTICES AND TO ENABLE THEM TO INNOVATE IN 
LIGHT OF RAPID TECHNOLOGICAL CHANGES.”
SEC. 8. Appropriations. - In addition to the amount provided under Section 5 
of this Act, amending Section 9 of the Barangay Micro Business Enterprises Act of 
2002, the sums necessary for the implementation of this Act shall be charged against 
the responsible agency’s current appropriations. Thereafter, such sums as necessary 
for the continued implementation of this Act shall be included in the annual General 
Appropriations Act.
SEC. 9. Implementing Rules and Regulations. - Within sixty (60) days from 
the effectivity of this Act, the DILG and DTI, upon consultation with appropriate 
government agencies and other stakeholders, shall promulgate the necessary rules 
and regulations to effectively implement this Act.


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SEC. 10. Separability Clause. - Any portion or provision of this Act that is 
declared unconstitutional or invalid shall not have the effect of nullifying other portions 
or provisions hereof as long as such remaining portions can still subsist and be given 
effect in their entirety.
SEC. 11. Repealing Clause. - All laws, ordinances, rules, regulations, other 
issuances, or parts thereof, which are inconsistent with this Act, are hereby repealed 
or modified accordingly.
SEC. 12. Effectivlty. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in at least two (2) newspapers of general 
circulation.
Approved.