FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 1313 
INTRODUCED BY HON. MANNY VILLAR 
EXPLANATORY NOTE 
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The micro and cottage industries substantially contribute to the country's 
economic development. Being labor-intensive, this industry sector is one of the major 
job generators in the country. Its growth means new jobs for the more than three million 
unemployed and 12 million underemployed Filipinos. 
Yet the sector's growth is hampered by low productivity and level of technology. 
Its biggest problems are production-related. While marketing and financing aspects are 
being addressed sufficiently by the government, other production-related aspects have, 
over the years, been taken for granted. 
This bill seeks to expand and strengthen the Cottage Industry Technology 
Center (CITt) as the head agency to provide assistance to and address the production, 
technology'and skills formation needs of micro and cottage industries, 
This measure strongly supports the government's strategy for an export-led 
balanced agri-industrialization strategy designed to address the production needs of the 
industry as well as the Medium-Term Development Plan's thrust on human capital 
investment. It is likewise aligned with the government's objective to create jobs, 
upgrade technology, promote technology transfer and develop the countryside, 
Approval of this measure is recommended, 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 1313 
INTRODUCED BY HON. MANNY VILLAR 
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AN ACT TO PROMOTE, DEVELOP AND ASSIST MICRO AND COTTAGE 
INDUSTRIES BY PROVIDING AN EFFECTIVE AND RATIONAL SYSTEM TO 
ADDRESS THEIR PRODUCTION AND TECHNOLOGY NEEDS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. -
This Act shall be known as the "Micro and Cottage 
Industries Development Act." 
SEC. 2. 
Declaration of Policy. - Recognizing that the envisioned alleviation 
of poverty and the problem of massive unemployment particularly in the countryside 
cannot be realized without strong economic activities at the grassroots level and that 
micro and cottage industries, being highly labor-intensive and a primary users of 
indigenous raw materials, have the highest potential for employment, self-employment 
and livelihood opportunities, it is hereby declared the policy of the State to give 
preferential attention to the promotion and development of micro and cottage industries, 
including livelihood and self-employment activities. 
SEC. 3. 
Micro and Cottage Enterprises. -
For the purpose of this Act, 
"micro and cottage enterprise" shall be defined as any business activity or enterprise, 
whether single proprietorship, partnership, cooperative or corporation, engaged in 
manufact\.lring, processing and other supporting industries whose total assets inclusive 
of those arising from loans but exclusive of land on which the particular business 
entity's office, plant and equipment are situated, is less than One Million Five Hundred 
Thousand Pesos (P1,500,000.00) subject to the periodic review of the Small and 
Medium Enterprise Development Council (SMEDC). Included in this definition are 
projects 
which 
provide 
livelihood, 
self-employment 
and 
income-augmenting 
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opportunities through production activities at home, schools, churches, community self-
help projects and others of like nature. 
SEC. 4. 
Purpose. -
This Act seeks to stimulate the establishment and 
sustain the growth of micro and cottage enterprises by addressing their production-
related needs. The systematic, efficient and rational provision of assistance aimed at 
increasing productivity and availability of these enterprises will in turn generate more 
employment, exports and to achieve countryside industrialization. 
SEC. 5. 
Designation of the Cottage Industry Technology Center as Lead 
Agency for the Provision of Assistance to Address the Production, Technology and 
Skills Formation Needs of Micro and Cottage Industries. - To achieve the purposes of 
the Act, the Cottage Industry Technology Center (formerly the National Cottage 
Industries Development Authority) is hereby designated as the lead agency in the 
provision of government assistance which shall address the problems of existing and 
potential micro and cottage enterprises relating to production, technology and 
manufacturing skills. Its facilities in Marikina City shall serve as the Cottage Industry 
Technology, Center (CITC) at the national level. It shall have the following duties and 
functions: 
(a) 
To directly provide, together with relevant industry associations, 
technology transfer projects and technical training to their production workers, 
supervisors, technicians and trainors at the basic, upgraded and advance levels; 
(b) 
To establish a technical conSUltancy services system whereby existing 
and potential micro and cottage entrepreneurs can be effectively advised on equipment 
selection and lay-out, productivity improvement measures and such other concerns 
designed to improve the competitiveness of their products either as subcontractors, 
direct or indirect exporters; 
(c) 
To fabricate and disseminate the use of labor-saving devices, quality tools 
and equipment; 
(d) 
To assist local government units in setting up their own cottage industries 
training systems by way of providing technical services, trainor's trainings or the 
establishment, tooling and operation of satellite cottage industries technology centers at 
the provincial, district and municipal levels; and 
(e) 
To exercise and perform such other powers and functions necessary to 
accomplish the objectives and purposes of this Act. 
SEC. 6. 
Composition and Structure. - To effectively carry out its duties and 
responsibilities, the Cottage Industry Technology Center (CITC) shall retain its 
corporate status and shall be governed by a board of directors composed of the 
Undersecretary of Regional Development, Department of Trade and Industry (DTI) as 
chairman, the Administrator of the CITC to be appOinted by the President upon the 
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recommendation of the Secretary of the DTI as vice chairman, the Undersecretary for 
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Planning, ,Department of Science and Technology (DOST), the Director General of 
Technical Education and Skills Development Authority (TESDA), the heads of the Small 
Business Guarantee and Financing Corporation (SBGFC), Philippine Chamber of 
Commerce and Industry (PCCI), University of the Philippines - Institute of Small Scale 
Industries (UP-ISSI), Chamber of Furniture Industries of the Philippines (CFIP), the 
Philippine Chamber of Handicraft Industries (PCHI) and the People's Economic Council 
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(PEC), as members. The CITC shall have the following organizational structure: 
(a) 
An administrator, assisted by a deputy administrator who shall be 
appointed by the President. 
(b) 
The technical and operations group which shall consist of a planning and 
program development and delivery office. 
(c) 
The support services group which shall consist of the finance and 
administrative offices to service both national and regional cottage industry centers. 
SEC. 7. 
General Powers. -
To effectively discharge its functions, the 
Cottage Industry Technology Center is authorized: 
(a) 
To acquire and hold assets of all types and kinds resulting directly from 
operations authorized by this Act or as essential or incidental to the proper conduct of 
such operations; 
(b) 
To accept donations or development aids, to enter into contracts, own, 
lease, sell or dispose its real properties and to make necessary expenditures as may be 
required in carrying out its functions as mandated by this Act; 
(c) 
To establish subsidiary corporations and/or institutional mechanisms 
deemed necessary to attain its objectives in accordance with existing laws, rules and 
regulations; and 
(d) 
To sue and be sued. 
SEC) 8. 
Duties and Remuneration of the Board. - The Board of Directors 
shall have the following duties and remuneration: 
(a) 
Enunciate policies, allocate resources and provide general directions to 
the operations of the Center; 
(b) 
budgets; 
(c) 
(d) 
(e) 
Review and approve the annual and other supplemental or special 
Review and approve corporate plans and annual programs; 
Evaluate and assess the performance of the Center on a yearly basis; 
To hire technical staff and other employees of the Center, determine their 
composition in accordance with the Civil Service Law, and 
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(f) 
Members of the Board of Directors shall receive a per diem at rate to be 
determined by the Department of Budget and Management (DBM) pursuant to existing 
rules and regulations. 
SEC. 9. 
Duties and Functions of the Administrator. -
The Administrator 
shall have the following duties and functions: 
(1) 
To administer the affairs of the Center under the general policy directions 
of the Board; 
(2) 
To appoint subordinate officials and employees as may be provided for by 
the plantilla or budget necessary for the proper discharge of functions; 
(3) 
To submit to the Board for review and approval its annual corporate 
budget and accomplishment; and 
(4) 
To perform such other acts necessary in the exercise of the duties of the 
office and such other acts as may be assigned by the Board of Directors. 
SEC. 10. 
Funding. - To carry out the purposes of this Act, the CITC is 
hereby authorized to appropriate all the former assets of the National Cottage Industry 
Development Authority, including funds for guarantees and other similar capital, after 
which subsidies to augment its income from operations shall be included in the General 
Appropriations Act. 
SEC. 11. 
Micro and Cottage Industry Technology Center. - The CITC shall 
utilize the existing training centers of TESDA, DOLE, SMEDC and Kabuhayan Centers 
nationwide which shall serve as venues for the development and transfer of required 
technologies, the formation of critical skills, sources of improved production techniques, 
product development, quality and/or diversification. The facilities of these centers shall 
be made available for common usage by micro and cottage enterprises as well as 
incubators for new business. 
SEC. 12. 
Loanable Fund. - To carry out the purpose of this Act and in order 
for CITC to effectively exercise its mandate, the SBGFC and other government 
agencies shall provide the special financing needs of the micro and cottage industry. 
SEC. 13. 
Information Dissemination. -
The DTI, through the CITC, in 
coordination with the Department of Interior and Local Government (DILG), DECS 
through the TESDA, the Philippine Information Agency (PIA) and other concerned 
agencies shall ensure the proper and adequate information dissemination of the 
contents and benefits of this Act to the general public especially to the target sectors. 
In addition, the concerned agencies shall conduct the necessary training of personnel 
who shall ensure the effective and efficient implementation of the law. 
SEC. 14. 
Implementing Rules and Regulations. - The Secretary of the DTI 
through the CITC in consultation with the secretaries of DILG, DOST, DECS through 
TESDA, the' heads of PCCI, UP-ISSI, LBP, SBGFC, CFIP, PEC and other concerned 
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agencies shall formulate the necessary rules and regulations to implement the 
provisions of this Act within ninety (90) days after its approval. 
SEC. 15. 
Separability Clause. - Should any provision of this Act be declared 
unconstitutional, the remaining provisions nor otherwise affected ·shall remain in full 
force and effect. 
SEC. 16. 
Repealing Clause. -
All laws, executive orders, rules and 
regulations or parts thereof which are inconsistent herewith are hereby repealed or 
modified accordingly. 
SEC. 17. 
Effectivity Clause. - This Act shall take effect after thirty (30) days 
following its full publication in at least two (2) newspapers of general circulation in the 
Philippines. 
Approved, 
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