Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

~ IDO
House sit no, 4°29

Introduced by HON. GUS S. TAMBUNTING

EXPLANATORY NOTE

It is declared in our Constitution as policy of the State to promote a just and
dynamic social order that will ensure the prosperity and independence of the nation
and free the people from poverty through policies that provide adequate social
services, promote full employment, a rising standard of living, and an improved
quality of life for all. Also, it is declared as State Policy that the promotion of social
justice in all phases of national development as well as in valuing the dignity of
every human person and the full respect for human rights. To amplify these policies,
our Constitution further stated that the goals of the national economy should be
towards an equitable distribution of opportunities income, and wealth, a sustained
increase in the amount of goods and services produced by the nation for the people;
and an expanding productivity aimed in raising the quality of life for all, especially
the underprivileged.

In order to accomplish these goals, the role of enterprises in the economy as
the major agent of development should be recognized. More importantly, in
compliance with these policies, the creation of off-farm employment opportunities
and transitional means for improving the livelihood of the people are instrumental in
alleviating our nation. Nonetheless, the protection of Filipino enterprises is a
foremost goal towards uplifting the plight of the people.

Thus, this is files with the objective of promoting a poverty reduction program
with an environment conducive to the development and growth of an effective social
enterprises sector that adheres to the State Policy in poverty reduction, economic
and social development, thereby establishing mechanisms essential to realizing their
potential and achieving their full growth, and extend the assistance necessary for
their advancement. To fully implement the objective of this bill, seeks to ordain the
promotion of social enterprise as a means to alleviate poverty through poverty-
reduction programs.

Social Enterprise or SE is referred in this bill as a wealth-creating organization,
however organized, whether an association, single proprietorship, partnership,
corporation, cooperative, or any other legal form, whose primary stakeholders are
marginalized sectors of society, engaged in providing goods and/or services that are


directly related to its mission of improving societal well-being. It distinguishes SE
from other forms of small enterprises as SE is established to achieve triple bottom
lines such as financial, social and ecological. More importantly, the role of SE is to
generate profit or surplus with due regard to social and environmental costs, and
makes a pro-active contribution to resolving social and environmental.

For the SE to accomplish the goal of this noble legislation, incentives and
benefits are given which includes credit windows, pool of funds and creation of a
developmental trust fund. Further, the incentives and benefits are only given to
eligible SE in order to ensure that only SE who has the Poor as Primary Stakeholders
(SEPPS) will benefit. Thus, in the end, the social mission of SE will be accomplished
in accordance to this bill.

Furthermore, this bill has already included the latest comments and additions
prepared by the PRESENT Coalition that were also in its Senate version

In the end, the underprivileged will be given the opportunity to alleviate
themselves from their economic conditions, such that through SE, they will ‘become
self-sustaining and thus, a major contributor in the economic

Thus, the passage of this bill is earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS,
First Regular Session

HOUSE BILL NO. 4729

Introduced by HON. GUS S. TAMBUNTING

AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE
POVERTY, ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION
THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM AND
PROVIDING INCENTIVES AND BENEFITS, AND APPROPRIATING FUNDS
THEREFOR.

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

CHAPTER I
GENERAL PROVISIONS

SECTION 4, Short Title, - This Act shall be known as the ‘Poverty Reduction
Through Social Entrepreneurship Act.”

SECTION 2. Statement of policy. - It is declared as policy of the State for the
promotion of a just and dynamic social order ensuring the prosperity and
independence of the nation and freedom of the people from poverty through policies
that provide adequate social services, promote full employment, a rising standard of
living, and an improved quality of life for all. The State shall provide social justice in
all phases of national development.

As a State Policy, the goals of the national economy are a more equitable
distribution of opportunities, income and wealth; a sustained increase in the amount
of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the
underprivileged,

The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. Notwithstanding, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.


The state also recognizes the important role of enterprises in the economy as
the major agent of development, creating off-farm employment opportunities and
providing transitional means for improving the livelihood of the people.

Towards this end, the State shall pursue a poverty reduction program that
promotes an environment conducive to the development and growth of a vibrant
social enterprise sector engaged in poverty reduction, economic and social
development. It shall empower the poor as primary stakeholders in social
enterprises, establish mechanisms essential to realizing their potential and achieving
their full growth, and extend the assistance necessary for their advancement. The
State shall likewise ensure that the provision for technical and financial assistance,
incentives and other services are free from any condition that might infringe upon
the autonomy or organizational integrity of the social enterprises to enable them to
develop into viable and vital anti-poverty-agents, and a strong entrepreneurship
movement which will be instrumental in reducing poverty in the country.

SECTION 3. Definition of Terms. - As used in this Act:

a) Social Enterprise or SE refer to a wealth-creating organization, however
organized, whether an association, single proprietorship, partnership, corporation,
cooperative, or any other legal form, whose primary stakeholders are marginalized
sectors of society, engaged in providing goods and/or services that are directly
related to its mission of improving societal well-being. It is established to achieve
triple bottom lines such as financial, social, and ecological. It generates profit or
surplus with due regard to social and environmental costs, and makes a pro-active
contribution to resolving social and environmental.

A social enterprise for purposes of this Act shall mean a Social Enterprise with the
Poor as Primary Stakeholders (SEPPS). A SEPPS is a social enterprise that explicitly
declares and pursues poverty reduction/alleviation or improving the quality of life of
specific segments of the poor as principal objective. A SEPPS engages and invests in
the poor to become effective workers, suppliers, clients and/or owners, and/or
ensures that a substantive part of the wealth created by the enterprise is distributed
to, or benefits them. In addition to reinvesting its surplus or profits back to the
enterprise to sustain the fulfilment of its social mission, a SEPPS also uses its surplus
or profits and mobilizes other resources to assist the poor to become partners in SE
or value chain management/governance and to become partners in community,
sectoral and societal transformation.

b) Absolute poverty refers to the condition of the household below the food
threshold level;

c) Assets refer to all kinds of properties, real or personal, owned by the social
enterprise (SE) as defined in paragraph (dd) of this Section and used for the conduct
of its business: Provided, That for the purpose of exemption from taxes and to
benefit from other incentives under this Act, this term shall mean all kinds of
properties, real or personal, owned and/or used by the SE for the conduct of its
business;


d) Basic sectors shall refer to the disadvantaged sectors of the Philippine society,
namely: farmer-peasant, artisanal fisherfolk, workers in the sector and migrant
workers in the informal sector, indigenous peoples and cultural communities,
women, persons with disability, senior citizens, victims of calamities and disasters,
youth and students, children, and urban poor as defined under Republic Act (R.A)
NO. 8425, otherwise known as the "Social Reform and Poverty Alleviation Act";

e) Bottom line shall refer to the objectives or purposes for which a SE is
established. Triple bottom line shall refer to social, ecological and financial
objectives;

f) Capability building refers to the process of enhancing the viability and
sustainability of SEs and pertain to education, training, coaching and other learning
events like study tours; technical, consultancy and advisory services; assistance in
organizational system development; technology incubation, development and
dissemination; value chain and subsector development; conduct of SE trade fairs
and missions; networking and policy advocacy initiatives and other such activities
that enable SEs to be effective and efficient vehicles for poverty reduction. The term
capability building precludes the grant of any loan or equity funds to the SE and shall
in no way refer to the provision of equity investments, seed funding, partnership's
seed funds, equity participation, start-up funds or any such activity that connotes
the infusion of capital or funds from the government or from the SE Development
Fund created under Section 16 of this Act;

g) Civil society organizations refer to private voluntary organizations of citizens
that are established to pursue a mission, usually involving the interest of the public,
marginalized groups or specific sectors of society. They include non-government
organizations, socio-civic groups, foundations and people's organizations;

h) Council shall refer to the SE Council;

i) Cooperative shall refer to an autonomous and duly registered association of
persons, with a common bond of interest, who have voluntarily joined together to
achieve their social, economic, and cultural needs and aspirations by making
equitable contributions to the capital required, patronizing their products and
services and accepting a fair share of the risks and benefits of the undertaking in
accordance with universally accepted cooperative principles as defined in R.A. 6938,
as amended by R.A 9520 otherwise known as the "Philippine Cooperative Code of
2008";

Corporate Social Responsibility or CSR shall refer to the commitment of a
private enterprise or business to contribute on a voluntary basis to a sustainable
social and economic development by working with relevant stakeholders to improve
their lives in ways that are good for business, the social reform agenda, the
sustainable development agenda, and society at large. CSR-related activities shall
include, but not be limited to, the following: 1) charitable programs and projects; 2)
Scientific research; 3) Youth and sports development; 4) Cultural or educational


promotion; 5) Services to veterans and senior citizens; 6) Social welfare; 7)
Environmental sustainability; 8) Health development; 9) Disaster relief and
assistance; and Employee and worker welfare related CSR activities;

k) Economic subsectors are networks of related actors and enterprises
performing various functions in value chains. These actors and enterprises transform
raw materials into finished products or develop services, and distribute or provide
them through market channels to final consumers; they may be identified by key
raw material source, by finished product or final service provided. An economic
subsector may be comprised of several competing value chains. By understanding
the dynamics of economic subsectors and using them as units of planning social
entrepreneurship interventions, government agencies, support institutions and SEs
shall more effectively reach and benefit a greater number of poor in poverty
reduction programs;

)) Empowerment strategy shall mean a development strategy that enables the
marginalized sectors to own, manage, and control SEs in order for them to reap
maximum benefits from it and which acts as a channel for directly distributing
income;

m) _ Fair trade shall refer to a trading partnership based on dialogue, transparency
and respect and which seeks greater equity in international trade and the
transformation and adaption of trading structures and practices in favor of the poor
and disadvantaged by offering better trading conditions to, and securing the rights
of, marginalized producers and workers;

1) __ Fair trade organizations shall mean enterprises certified by internationally and
nationally recognized Fair Trade networks;

0) Fair trade principles refer to the values adopted by fair trade organizations in
their day-to-day operation. These include creating opportunities for economically
disadvantaged procedures; transparency and accountability; payment of a fair price;
ensuring no child labor and forced labor; commitment to non-discrimination, gender
equity and freedom of association; ensuring good working conditions; providing
capacity building; and, respect for the environment;

p) Foundation shall mean the categorization of a non-profit organization that
typically either donates funds and support to other organizations or provides the
source of funding for its own charitable purposes. Unlike a company, foundations
have no shareholders though they may have a board, an assembly and voting
members. A foundation may hold assets in its own name for the purposes set out in
its constitutive documents, and its administration and operation are carried out in
accordance with its statutes or articles of association rather than fiduciary principles;

q) GPPB refers to the Government Procurement Policy Board established in
accordance with Article X of R.A.No.9184, otherwise known as the "Government.
Procurement Reform Act;"


r) Intermediation strategy shall refer to a development strategy that provides
financial, agricultural, business development and institutional development services
to the entrepreneurial poor and employers of the poor and provides as well product
development and marketing support using the principles of fair trade to marginalized
producers. A SE engaged in intermediation strategy need not be owned by the
marginalized stakeholders but provide immediate access to services among a critical
mass of these marginalized stakeholders;

s) Marginalized Sectors shall refer to groups of people who are stigmatized or
marginalized by virtue of their physical, psychological, economic, social or cultural
circumstance;

t)  Micro-enterprise as defined in R.A No. 6977, as amended by R.A No. 9501,
otherwise known as the "Magna Carta for Small Enterprises." shall refer to any
business activity or enterprise engaged in industry, agribusiness and/or services,
whether single proprietorship, cooperative, partnership or corporation whose total
assets, includes of those arising from loans but exclusive of the land on which the
particular business entity's office, plant and equipment are situated, must have a
value of not more than Three Million Pesos (P3,000,000.00). This amount is subject
to review and adjustments by the Micro, Small and Medium Enterprises Development
(MSMED) Council, taking into account inflation and other economic indicators and
may use other variables such as number of employees, equity capital and assets
size;

u) Microfinance shall refer to the provision of a broad range of financial services
such as deposits, loans, payment services, money transfers and insurance products
to the poor and low-income households and their microenterprises and small
businesses, to enable them to raise their income levels and improve their living
standards;

v) Minimum basic needs shall refer to the needs of a Filipino family pertaining to
survival (food and nutrition; health; water and sanitation), security (shelter; peace
and order; public safety, income and livelihood); and enabling services (basic
education and literacy, participation in community development, family and psycho-
social care);

w) Non-Government Organization or NGO refers to a duly registered non-stock, non-
profit organization focusing on the upliftment of the basic or disadvantaged sectors
of society by providing advocacy, training, community organizing, research, access
to resources, and other similar activities and, as defined under Section 34 (H)(2)(c)
of Republic Act NO, 8424, as amended, otherwise known as the National Internal
Revenue Code of 1997, organized and operated exclusively for scientific, research ,
educational, character-building and youth and sports development, health, social
welfare, cultural or charitable purposes, or a combination thereof, and no part the
net income of which inures to the benefit of any private individual;

x) People's Organization or PO refers to a self-help group belonging to the basic
sectors and/or disadvantaged groups composed of members having a common bond


of interest who voluntarily join together to achieve a lawful common social or
economic end.;

y) Persons with Disability shall refer to individuals with restriction or different
abilities, as a result of a mental, physical or sensory impairment, to perform an
activity in the manner or within the range considered normal for a human being;

2) Poor shall refer to individuals and families whose income fall below the poverty
threshold as defined by the National Economic and Development Authority and/or
are deprived of the means to provide in a sustained manner their minimum basic
needs of food, health, education, housing and other essential amenities of life, as
defined under R.A 8425;

aa) Poverty reduction/alleviation shall mean overcoming the income, resource and
capability deprivation among the poor as defined in the preceding paragraph and the
marginalized sectors as defined in paragraph (q) hereof;

bb) Private Enterprise shall refer to an organization engaged in a business activity
organized for the purpose of accumulating profit and whose primary stakeholders
and beneficiaries are its owners;

cc) Procuring Entity refer to any branch, department, office, agency, or
instrumentality of the government, including state universities and colleges,
government-owned and/or - controlled corporations, government financial
institutions, and local government units procuring Goods, Consulting Service and
Infrastructure Projects;

dd) Resource mobilization strategy shall refer to a development strategy intended to
generate income from the sale of products and services of a SE in order to finance
or subsidize the operations of its core development program or development
interventions among the marginalized sectors;

ee) SEGFP development refers to the SE Guarantee Fund Pool created under this
Act;

ff) Social development refer to the continuing process of addressing the needs of
society, beginning with the people's minimum basic needs, through a systematic
implementation of socioeconomic programs or packages;

99) Social Enterprise Service Institution refers to an organization that provides
assistance to SEs for them to become viable and sustainable and which assistance
pertains to supplying needs such as trainings, education and other capacity-building
measures, research and development, and other similar activities;

hh) Social Enterprise Advocacy Group refers to an organization whose primary
purpose is supporting the cause of SEs especially with regard to public policy and
articulating issues or causes related to social entrepreneurship;


ii) Social entrepreneur refers to an innovative individual or institution that promotes
the creation and operationalization of enterprises or livelihood endeavors for those in
need or which address social problems and improve societal well-being;

jj) Social entrepreneurship entails innovations designed to explicitly improve societal
well-being, housed within entrepreneurial organizations, which initiate, guide or
contribute to change in society;

kk) Social Inclusion strategy refers to the development strategy that assists groups
of people who are stigmatized or marginalized by virtue of their physical,
psychological, economic, social or cultural circumstance in order to restore their
dignity by not only removing the barriers that limit their access to the delivery of
basic social services and employment, but more importantly, by nurturing work and
other environments that create avenues for their participation as productive
members of society;

ll) Social Investors are individuals or institutions that choose to put in money to a
business endeavor or activity not principally for financial profit but to fulfill a social
mission which may include the poverty reduction, concern for environmental
protection, strong organizational governance, and a desire for a more economically
just world;

mm) Social reform refers to the continuing process of addressing the basic inequities
in society through a systematic, unified and coordinated delivery of socioeconomic
programs or packages;

nn) Transactional roles refer to enterprise-related functions performed by the poor
that involved an exchange of goods or services for money including being workers,
suppliers, clients or owners;

00) Transformational roles are functions performed by the poor as conscious agents
of change to lift their own selves from poverty and to participate in group efforts to
improve the quality of life of their community, sector or society as a whole;

Pp) Transactional service pertain to enterprise or market-driven activities, such as
providing loans, demonstrating new technologies or conducting trainings that are
necessary for the poor in the SE system to effectively and efficiently perform their
roles as workers, suppliers, clients and owners. Transactional services may be free-
based, such as the granting of loans, or non-free based, such as the extension of
production-related trainings;

qq) Transformational services pertain to activities such as leadership formation,
organizational development, financial and legal literacy development, asset build-up,
and other educational and experiential learning opportunities, that empower the
poor to become conscious change agents for themselves, for their communities,
sectors and society as a whole;


tr) Underemployment shall mean an economic position where an employed person's
desire to have additional hours of work in his/her present job or to have an
additional job, or to have a new job with longer working hours is not met;

$s) Unemployment shall mean an economic situation where persons who are 15
years old and over simultaneously satisfy the following criteria: (1) without work or
have no job or business; (2) available for work and willing to take up work in paid
employment or self-employment; (3) seeking work and had taken specific steps to
look for a job or establish a business but failed to secure work or set up a business;

tt) Value chain refers to value-adding economic activities that an enterprise is
interlinked with in the process of producing goods and/or service to serve its chosen
market. A value chain typically consists of: 1) inbound distribution of or logistics, 2)
manufacturing operations, 3) outbound distribution or logistics, 4) marketing and
selling, and 5) after-sales service. These activities are supported by 6) purchasing or
procurement, 7) research and development, 8) human resource development, and
9) organizational development. A SE that understands and manages its value chain
improves its capability to create economic, environmental and social values towards
improving the position and benefits of the or in the value chain and towards
ensuring the viability and sustainability of the enterprise.

CHAPTER II
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES

SECTION 4. Social Enterprise (SE); General Concept and Coverage. - A
Social Enterprise (SE), for purposes of this Act, refer to a Social Enterprise with the
Poor as Primary Stakeholders (SEPPS) as the term is defined in Sec. 3 (a) of this Act.
It may be collectively own by the poor in the form of cooperatives, associations, or
other legal form, where the poor are the exclusive owners or comprise a majority of
the shareholders, partners or members. SEPPS also include NGOs or other
organizations that engaged in wealth-creating activities, the proceeds of which are
used exclusively to sustain in the fulfilment of their social mission.

SECTION 5. Fiigibility for Benefits and Incentives. - To be eligible for the
benefits and incentives provided for in this Act, the SE shall:

a) Provide or facilitate the provision of a combination of transactional and/or
transformational services to improve the position and benefits derived by the poor
from the SE and the value chain or economic subsector where the SE is located,
including becoming worker-owners, suppliers-owners, supervisor and managers,
active members and leaders in governing bodies of the SE or its allied organizations;

b) invest a substance part of its surplus, profits or mobilize other resources to assist
the poor to become partners in SE or value chain management/governance and/or
to become partners in community, sectoral and societal transformation;

c) make a pro-active contribution to resolving social and environmental problems
and generate profit or surplus with due regard to social and environmental cost;


d) employ any of the following development strategies in the pursuit of this social
mission: 1) empowerment strategy; 2) social inclusion strategy; 3) intermediation
strategy; and, resource mobilization strategy;

e) be engaged in an economic activity within the sectors of agriculture and fisheries,
industry and services which, for purposes of this Act, shall refer to an activity in any
of the economic subsectors;

f) ensure that a substantive part of the wealth created by the enterprise is
distributed to the poor in the form of service, dividends and other forms of benefits,
and payments and incentives for products or services rendered consistent with the
principles of fair trade;

g) be duly registered with the appropriate agencies as provided under the
Corporation Code or the Cooperative Code of the Philippines, Magna Carta for Micro,
Small and Medium Enterprises, Barangay Micro Business Enterprises Act and other
Laws.

Financial sustainability shall not be a prerequisite for the availment of
incentives and benefits under this Act. Provided that, social enterprises that not
achieved financial sustainability may be avail of the services, assistance and
incentives set forth in this Act by presenting a workable strategy to achieve financial
sustainability over a reasonable period of time.

SECTION 6. Other Eligibility Provision. - In the case of social enterprises
organized as stock corporations, partnerships or sole proprietorships, the following
additional requirements shall apply:

a. A Social Enterprise organized as a stock corporation must not be a branch,
subsidiary or division of a private business enterprise, regardless of the size of
such private business enterprise, nor may its policies be determined by a
private business enterprise. Provided, that this shall not preclude an SE from
accepting subcontracts from large private business enterprises or firms or
from joining in cooperative or joint-venture activities with other SEs or
foundations practicing CSR.

b. A social enterprise must not be organized a branch, subsidiary or division
of a private business enterprise, regardless of the size of such private
business enterprise, nor may its policies be determined by a private business
enterprise. Provided, that this shall not preclude a SE from accepting
subcontracts from large private business enterprises or firms of from joining
in cooperative or joint-venture activities with other SEs or foundations
practicing CSR.

c. A social enterprise organized as stock corporations, partnerships or sole
proprietorships, must invest at least 60% of its gross revenues to sustain the


fulfilment of its social mission or to provide transformational services for the
poor.

SECTION 7. Rules and Regulations for Application and Qualification of
SEPPS, - Within ninety (90) days from the date it is first convened, the Social
Enterprise Development Council shall formulate the implementing rules and
regulation for the application and accreditation of enterprises to qualify as SE under
this Act, following the principles of self-regulation, transparency and responsibility.

SECTION 8. Formulation of a Poverty Reduction Through Social
Entrepreneurship (PRESENT) program. - To promote the development of a SE sector
with the poor as primary stakeholders, a comprehensive and fully-integrated Poverty
Reduction Through Social Entrepreneurship (PRESENT) Program, shall be
formulated, guided by the following principles:

a) Incorporation of the PRESENT Program in the government's poverty
reduction drive as a major sustainable and comprehensive strategy;

b) Rationalization of poverty reduction programs by streamlining and
coordinating the various anti-poverty programs of the government to
reduce inefficiency and duplication and duplication and to improve the
effectiveness of each program;

c

People's participation and empowerment by mobilizing civil society
organizations and social movement groups working with the poor;

d) Promoting sustainable programs that reduce inequality in incomes across
economic sectors and increase self-reliance among the poor;

Enabling SEs to overcome constraints and to take advantage of
opportunities for enhancing the position and benefits of the poor in
economic subsectors and value chains;

&

f) Gender-sensitivity by ensuring women's equal rights and access to SE's
resources; and,

Development of sustainable mechanisms for the provision of quality and
accessible social services to the poor.

s

The planning framework of the PRESENT Program and its planning process
shall ensure that the poor are engaged as primary stakeholders. It shall add value
and complement ecosystem-based, area-based, community-based and other tools
and processes in local economic development by promoting and utilizing the
economic subsector as a strategic unit of analysis and planning SE development
interventions.

The PRESENT Program shall identify and develop key SEs and resource
institutions as partners in strategic economic subsectors that have the potential for


growth and where large numbers of the poor are concentrated. SEs shall be
developed as vehicles to ensure that the poor benefit the most from sustainable
subsector development.

PRESENT medium-term and annual development plans shall be formulated in
synchrony with the medium-term development plan of the national government.

SECTION 9. Social Enterprise Development Council. - To carry out the policy
declared under this Act, a Social Enterprise Development Council (SEDC), hereinafter
referred to as the Council, is hereby created as an agency attached to the
Department of Trade and Industry (DTI). It shall be the primary agency tasked to
carry out the promotion, growth and development of social enterprises in the
country.

The Council shall be composed of the following:

a) Secretary of Trade and Industry, as chairperson;

b) Secretary of Agriculture, as co-vice chairperson;

c) Lead Convenor of the National Anti-Poverty Council (NAPC), as co-vice
chairperson;

d) SE sector head representative, as co-vice chairperson;

e) Secretary Securities and Exchange Commission

f) Chairman of the Cooperative Development Council

g) Secretary of Social Welfare and Development;

h) Director-General of the National Economic Development Authority
(NEDA);

i) Secretary of Finance;

j) Secretary of Interior and Local Government;

k) Secretary of Labor and Employment;

!) Secretary of Science and Technology;

m) — Secretary of Education;

n) Secretary of Agrarian Reform;

0) Secretary of Health;

p) Secretary of Environment and Natural Resources;

q) Chairperson of the Cooperative Development Authority (CDA);

r) Nine (9) representatives from SEs, three (3) representatives each from
the main island groupings of Luzon, Visayas, and Mindanao;

s) Three (3) representatives from SE service institutions; and

a9) Three (3) representatives from SE advocacy groups, as members,

The Council shall, from time to time, call upon the participation of any
government agency to attend in its meetings to assist in clarifying issues and finding
resolution to problems that concern their respective offices with respect to the
implementation of the PRESENT Program enunciated under this Act or any
development program for SEs.

SECTION 10. Designation of permanent Representatives to the Council. -
Within 30 days from the effectivity of this Act, Cabinet-ranked ex-officio members of


the Council shall designate a permanent representative to the Council, to attend the
meetings of the council in cases that the Cabinet-ranked ex-officio members cannot
personally attend such meetings. The designated permanent representative of any
of the Cabinet-ranked members of the Council must hold a position not lower than a
bureau director,

SECTION 11. 7erm and Appointment of SE Sector Representatives. - Within
90days from the effectivity of this Act, the President shall select appoint the
representatives of the SEs from the main island groupings of Luzon, Visayas and
Mindanao, the SE service Institutions, and the SE Advocacy Groups from among the
nominees submitted by their respective organizations. Nominations for
representatives shall be submitted within 60 days from the effectivity of this Act.
These representatives must be conversant in the theory and practice of SE under
this Act.

Of those appointed after the effectivity of this Act, five (5) representatives,
consisting of a representative each for Luzon SEs, Visayas SEs, Mindanao SEs, SE
Service Institutions, and SE Advocacy Groups, shall for term for three (3) years. A
second of five (5) representatives, with the same composition above, shall serve for
a term of two (2) years, while a third group shall serve for a term of one (1) year.

All SE representatives shall thereafter be appointed to serve for a term of
three (3) years, No person shall be appointed to serve as an SE representative in the
SEDC for more than a period of two (2) terms.

Any vacancy in the SEDC arising from the death, incapacity, resignation, or
termination of the term of an appointed SE representative shall filled up within 90
days from the occurrence of the said vacancy. All nominations to the vacancy shall
be submitted within 60 days from the occurrence of such. In the case of a vacancy
arising from death, incapacity or resignation, the representative appointed to the
vacancy shall serve only for the remaining period of the term for the vacated office.

SECTION 12. Powers and Functions. - The Council shall have the following
powers and functions:

a) Formulate policies, plans, programs and projects to develop and promote
SEs as a tool for poverty reduction consistent with national development
objectives;

b) Oversee the successful implementation of the PRESENT Program and
other SE programs;

c) Identify and access sources of financing to expand the SE sector;

d) Monitor and evaluate the performance of programs and projects for
appropriate incentives;

e) Call upon any government agency to carry out and implement programs
and projects identified by the council;

f) Call upon people's organizations, non-government organizations, the
academe and other sectors to provide advice on matters pertaining to SEs


and conduct of transactional and transformational services to farmers,
procedures, workers, consumers and other stakeholders;
g) Submit annual and other periodic reports to the President and the
Congress of the Philippines through the Congressional Oversight
Committee;
Promulgate such rules and regulations and exercise such other powers
and functions as may be necessary to carry out the purposes of this Act;
and
i) Perform such other functions as may be necessary for its effective
operations and the continued enhancement, growth and development of
the SE sector.

h

SECTION 13. SEDC: How Convened, Quorum, and Per Diem. Within 90 days
from the effectivity of this Act, and upon the appointment of at least 10
representatives for the SE Sector, the SEDC shall be convened upon the call of its
Chairperson of his permanent designated representative. The Council shall thereafter
meet at least once every quarter, and may furthermore be convened for special
meetings through a call of the Chairman, his designated permanent representative,
or a majority of the Council members, as may be necessary.

A majority of all the members of the SEDC shall constitute a quorum to do
business. Provided that, in no case shall the SEDC be convened without the
attendance of at least five (5) of the representatives for the SEs, SE service
Institutions, and SE Advocacy Groups.

The Chairperson and members of the Council shall be entitled to a reasonable
per diem for each meeting actually attended at such amount as may be fixed by the
Council in accordance with existing laws, rules and regulations.

SECTION 14. SEDC Executive Committee. The Council may create an
Executive Committee of seven (7) members elected by its members from among
themselves or they designated permanent representatives, with at least three
members representing the SEs, and with the authority to act for the Council, and
within the specific authority granted by the Council.

SECTION 15. Secretariat. - There is hereby created a Secretariat headed by
an Executive Director and two (2) Deputy Directors, and supported by staff, whose
composition shall be determined by the SEDC, to serve as the national, technical and
administrative secretariat of the Council with the member agencies providing
additional support staff when the need arises. The Secretariat shall perform the
following functions:

a) Provide administration support to the Council, with the assistance of
the National Economic and Development Authority secretariat in the
formulation of the PRESENT development programs and plans;

b) Assist the Council in the implementation of the PRESENT development
program and the annual and medium-term development plan;

c) __ Assist the Council in the accreditation of SEs;


d) Assist the Council in monitoring the PRESENT development programs
and the activities of the various concerned government agencies with
respect to SEs;

e) Prepare, collate and integrate all necessary inputs to the Council's
yearly report on the status of SEs in the country;

f) Submit periodic reports to the Council on the progress and
accomplishment of its work programs; and

g) Perform other functions that may be assigned and authorized by the
Council.

SECTION 16. Office. - The Council shall have its principal place of business
in Metro Manila and may establish such branches within the Philippines as may be
deemed necessary by the President of the Philippines to carry out the powers and
functions of the Council.

SECTION 17. National Center of Social Enterprise Development. - There
shall be established a National Center of Social Enterprise Development (NCSED)
under the Council which shall perform the following functions:

a) Provide SEs with capability-training and education through the Social
Enterprise Capability Building and Sustainability Program created under
Section 16 of this Act;

b) Develop and enhance a research and development system which shall
equip every SE with innovative and sustainable approaches that
ensures improvement in the access to basic social services by the poor
pursuant to Section 18 of this Act; and

©) Manage a Social Enterprise Marketing Assistance Program (SMAP) that
will ensure the generation of the highest possible income for the SEs
pursuant to Section 19 of this Act.

The NCSED shall be headed by the Executive Director of the Council
Secretariat. It shall maintain a multi-sectoral, Multi-disciplinary pool of experts
including those from the academe, practicing professionals, business and industry,
youth, women and other concerned sectors, who shall be screened according to the
qualifications set by the Council.

The NCSED shall coordinate with the University of the Philippines Institute for
Small Scale Industries (UP ISSI), the Technical Education and Skills Development
Authority (TESDA), the Technology and Livelihood Resource Center (TLRC), the
Department of Transportation and Communications (DOTC), civil society
organizations and other relevant agencies, state universities and colleges in
implementing its programs.

SECTION 18. Personnel, - Subject to Civil service laws, rules and
regulations, the Council is authorized to select, appoint, employ and fix the
compensation of the officers and employees of the Secretariat and the NCSED as
shall be necessary to carry out its functions.


SECTION 19. Role of LGUs in SE Development. - Pursuant to the relevant
provisions of R.A. No. 7160, otherwise as the Local Government Code, the LGUs
shall be primarily responsible for the development of SEs and the implementation
and enforcement of the relevant provisions of this Act within their respective
jurisdictions with the end in view of reducing poverty therein. The LGUs are hereby
mandated to include in their respective local development plans certain policies and
programs geared the development of SEs in their jurisdiction.

Only LGUs with viable SE development plans as incorporated in their
respective local development plans are entitled to avail of the SE Development Fund
created under the immediately succeeding section for the purpose of initiating and
facilitating the development and sustainability, or otherwise assisting such SEs in
their own jurisdiction: Provided, That no LGU shall establish and operate its own SE.
Provided further, that this provision shall in no case be construed to prohibit LGUs
from assisting in the establishment and operation of SEs.

CHAPTER IIT
DEVELOPMENT OF SOCIAL ENTERPRISES

SECTION 20. SE Capability Building and Sustainability Program; Creation of
SE Development Fund. - There is hereby established a SE Capability Building and
Sustainability Program whose primary objectives is to guarantee the viability and
sustainability of SEs through activities that advance, in general both transformational
services and transactional services. This program shall include training in social
entrepreneurship development, institutional strengthening, human resource
competency and skills training, business planning and advisory services, upgrading
of accounting and auditing systems, technical assistance for the installation or
improvement of management information systems, technology intervention,
technology incubation/commercialization, market studies, and product development
competitiveness, business matching activities, trade fairs and missions, policy
advocacy, disaster-resiliency and other related activities

The SE capability Building and Sustainability Program shall likewise include
the establishment of an insurance system for SEs affected by natural calamities in
line with the National Framework Strategy on Climate Change 2010-2022 as
provided for under RA 9729 or the Climate Change Act 2009 and RA 10121 or the
Philippine Disaster Risk Reduction and Management Act of 2010.

For this purpose, there is hereby created and established a SE Development
Fund (SEDF) in the amount of Three Billion Pesos (P3,000,000,000.00) to be
administered by the Council with an endowment from the earnings of the Philippine
Amusement and Gaming Corporation (PAGCOR), in addition to appropriations by
Congress, voluntary contributions, grants, gifts from both local and foreign sources
as may accepted by the Council. Capability building projects approved by the Council
shall be implemented by the NCSED, by itself or through reputable Social Enterprise
Service Institutions contracted for the purpose, and acting under the supervision of
the NCSED.


Only the fruits of the SEDF shall be used for the purposes provided herein.
Any undisbursed fruits for the preceding year shall form part of the disbursable
portion of the SEDF in the following year.

SECTION 21. Socia/ Enterprise Research and Development System. - The
Council, in coordination with the NEDA, DOST, and DTI and other appropriate
agencies and research institutions, shall develop and enhance a research and
development system that:

a) Provided studies on opportunities for poverty reduction and SE
development in key economic subsectors and other inputs for the Council
to undertake strategic planning for its PRESENT program;

b) Equip SEs and support institutions with technologies that are appropriate
for enhancing the participation and benefits of the poor in various
economic subsectors; and,

c) Equip SEs and support institutions with innovative and sustainable
approaches to improve access of the poor to quality basic social services.

SECTION 22. Social Enterprise Marketing Infrastructure Development. - The
Council shall promote the development and expansion of local and foreign markets
for the products and services of SEs, guided by the principles of fair trade,
Consistent with this, the Council shall:

a) Establish a SE Marketing Assistance Program (SMAP) that will assist SEs
match supply with demand in both domestic and foreign markets, as well as
promote SE products and services through tri-media, trade fairs and trade
missions;

b) Develop, install and sustain a SE market information system with the
assistance of the DTI and DOTC which shall be called the SE Marketing
Information Network (SMIN).

The SMIN shall be set up from the level of the municipal and provincial LGUs,
the regional and up to the Council level within one (1) year from the approval of this
Act, taking into account existing information networks such as the internet and using
a dedicated website for the purpose, to ensure linkage of the SEs with the
government and its various departments, agencies, bureaus and instrumentalities,
the local and domestic markets, as well as research institutions. The Council shall
provide technical assistance in setting up the SMIN at the local and regional levels.

All government departments, agencies, bureaus, research institutions, as well
as the LGUs shall consolidate and continuously update all relevant information and
data that would be of use to SEs on a periodic basis and make such data available in
a dedicated website on the internet.

The SMIN shall provide information and marketing services related to
products of SEs which shall include the following:

i. Supply data;


ii, Demand data;

iii, Price and Price trends;

iv. Product standards;

v. Directory of, but not limited to SEs, traders, key market centers,
processors and business institutions both at the national and local
levels;

vi. Information and technology generated from research institutions;

vii. International, regional and local market forecasts institutions;

vili. Resource accounting data.

CHAPTER IV
INCENTIVES AND BENEFITS

SECTION 23. Special credit Windows. - In addition to the special credit
windows provided for the promotion of microfinance as provided under Section 16 of
RA 8425, the Land Bank of the Philippines, Development Bank of the Philippines,
Philippine Postal Bank, and Al Amanah Bank, are hereby mandated to set aside at
least eight percent (8%) of their total loan portfolio based on their balance sheet in
the end of the preceding quarter, and open a special credit window for SEs.

For a period of ten (10) years from the date of the effectivity of this Act, all
other lending institutions as defined under the Central Bank Act or the General
Banking Act, as amended, whether public or private, shall likewise set aside at least
eight percent (8%) of their total loan portfolio based on their balance sheet as of the
end of the previous quarter and make the same available for SEs through a special
credit window. The BSP, in consultation with the Council, shall formulate the 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 provision.

The BSP shall establish an incentive program to encourage lending to SEs
beyond the mandatory credit allocation such as possible reduction in bank's reserve
requirement.

The Council shall establish a system to monitor all loan applications of SEs in
order to account for the absorptive capacity of the SE sector. The BSP shall require
lending institutions covered by this Act to furnish the Council on a quarterly basis a
regular report on their respective compliance with the above provisions on the
mandatory credit allocations for SEs and shall Act immediately on the Council's
reports of non-compliance therewith,

The special credit window for SEs shall bear interest lower than the market
rate and shall have longer terms of payment and waiver of applicable fees,

SECTION 24. Special Credit Window Purposes. - The special credit window
provided under Section 19 of this Act shall be intended for the following purposes:


a) Organizational developmental loan or capacity-building loan for the
conduct of social preparation activities or the conduct of capability-building
and training or professional development of the board, management and staff
of the SE for social entrepreneurship, such as business planning and advisory
services, technology intervention, incubation, market studies, and product
development;

b) Credit line for business development loan or working capital loan to
cover the operational and management expenses of a start-up or existing
business or income generating project, including receivable financing or
purchase of additional inventory, soft or intangible investments such as trade
fair participation or acquisition of software or franchise development
packages;

c) Fixed assets financing to cover acquisition of fixed assets like
machineries and equipment, motor vehicle, or acquisition of lot for project site
or construction of a plant and building and the improvement thereof;

d) Value chain financing to cover any of the value chain activities such as
production, processing and marketing;

e) Domestic letter of credit or trust receipt to provide a stand-by credit
facility for the SE borrower for the purchase of product inputs, equipment,
machinery, implements, and spare parts, whereby payment of which is
guaranteed and to be made to the seller by the lending institution, provided
all documents conform with the terms and conditions of the credit; and

f) Revolving Credit Line for re-lending to finance the livelihood project
requirements of end-borrowers.

SECTION 25. Eligibility for Agriculture and Fisheries Credit. - In addition to
the special credit window provided above, at least ten percent (10%) of the funds
created under Section 6 of RA 10000, otherwise known as "The Agri-Agra Reform
Credit Act of 2009," mandated to be set aside by all banking institutions, whether
government or private, for agriculture and fisheries credit, shall be made available
for SEs engaged in agriculture and fisheries activities.

SECTION 26. Socia/ Enterprise Guarantee Fund Pool with Non-collateral
Loans, - This is hereby created a social Enterprise Guarantee Fund Pool (SEGFP)
which shall be comprised of the five percent (5%) of the preceding year budget
surplus of the government-owned and controlled corporations and government
financial institutions including the PAGCOR, the Philippine Charity sweepstakes Office
(PCSO), the Security System (SSS), the Government service Insurance System
(GSIS), the National Power Corporation and the Philippine National Oil Company
(PNOC), as contribution to the SGFP in accordance with relevant laws, charters and
by-laws, in addition to voluntary contributions, grants and gifts from both local and
foreign sources as may be accepted by the Council.

The SEGFP shall be administered by the Council and shall be used to mitigate
the risks involved in SE sector lending, facilitating the provision of credit therefor.
The fund shall be placed in trust with the Land Bank of the Philippines for the
purpose of providing guarantee cover to participating financial institutions and other


parties in extending financing to SEs: Provided, that the fund may also be used to
cover the performance bond of SEs in government procurement.

The Council, in Coordination with the Land Bank of the Philippines, shall draw
up the mechanics and administrative arrangement and issue the implementing
guidelines for the fund pool.

SECTION 27, Utilization of People's Development Trust Fund. - The earnings
of the People's Development Trust Fund (PDTF) declared under Section 11 of RA
8425 may be utilized and accessed by the NSCED or accredited SE for the following
purposes:

a) Consultancy and training services for SEs and their beneficiaries on the
establishment of the necessary support services such as financial preparation,
fund sourcing, operation of credit and savings entities, monitoring and
evaluation including training on marketing, financial, human resource,
operational and strategic management;

b) Scholarship or training grants for SE staff and officers, and selected
beneficiaries;

c) Community organizing for SE;

d) SE development and capability building programs, feasibility studies
and researches;

e) Legal and other management support services for SEs such as
registration or accreditation, documentation, contract review and
enforcement, audit and operational assessment;

fy Information dissemination of SE technology and management; and

g) Other activities to support SEs as approved by the designated agency
administering the PDTF.

SECTION 28. 7ax Exemptions. - Without prejudice to existing tax exemption
provisions already applicable to different SEs under laws, A qualified SE shall have
following tax exemptions:

a) SEs with a net annual income or not more than Fifteen million pesos
(P15,000,000.00) shall be exempt from all national, city, provincial, municipal
or barangay taxes of whatever name and nature: Provided, That such net
income shall be allocated for transformational services and other activities of
the SE as provided under Section 5.g of this Act;

b) VAT and other percentage taxes;

c) Documentary stamp tax;

d) Capital gains tax on exchanges of real property classified as capital assets
or shares of stock; and

) For five (5) years after the effectivity of this Act, all SEs duly certified by
the Council, consultation with the Department of Finance (DOF) and the
Board of investment (BOI) of the DTI, shall be exempted from the payment of
VAT, tariff and duties for the importation of all types of product inputs,
equipment, machinery, implements, and spare parts: Provided, That these
inputs, equipment, machinery, implements, and spare parts shall be for the


exclusive use of the importing SEs and can be shown to be directly related to
further improve the value chain operations of the SEs.

The Council shall, in consultation with the DOF and the BOI, within ninety (90)
days from the effectivity of this Act, formulate the implementing rules and
regulations governing the importation of the inputs, equipment, machinery, and
implements for use by the SEs.

For income tax purposes, a reinvestment made by a SE for the expansion of
its socioeconomic projects within the area of its operation shall be tax deductible
from the gross income.

SECTION 29. Preferential Rights. - Without prejudice to preferential rights
already available to specific enterprises or organizations under other laws, qualified
SEs shall be accorded a preferential right in the procurement process and in the
implementation of procurement contracts by the government in all its branches,
departments, agencies, subdivisions, and instrumentalities, including in the
government-owned and controlled corporations and local governments units.

SEs shall be priority and preference in the following procurement processes:

a) Direct contracting as provided under Section 50 of RA 9184, otherwise
known as the "Government Procurement Reform Act," may be resorted to if
the contracting party selling the goods and services required by the procuring
entity is a social enterprise as certified by the Council.

b) Shopping as provided under Section 52, paragraph (a) of RA 9184 may
be resorted to when there is an unforeseen contingency requiring immediate
purchase: Provided, that the procurement of the goods and services shall be
first obtained from the social enterprise within the area of operation of the
procuring entity which is duly certified by the Council as having the capacity to
supply the required goods and services: Provided, further, That the amount
shall not exceed One Hundred thousand Pesos (P100,000.00).

Shopping as provided in Section 52, paragraph (b) of RA 9184 maybe resorted
din the procurement of ordinary or regular office supplies and equipment not
available in the Procurement Service involving an amount not exceeding Two
hundred fifty thousand pesos (P250,000.00): Provided, that the Procurement.
does not result in splitting of contracts: Provided, further, That a price
quotations shall be first obtained from a social enterprise as certified by the
Council as having the capacity to furnish or provide the required office supplies
and equipment. Only in the event of failure of submission or absence of SE
price quotation that at least three (3) price quotations from other bona fide
suppliers shall be obtained.

c) Negotiated procurement as provided under Section 53 of RA 9184 may
be allowed when the goods or services subject of the procurement may be
obtained from a SE within the area of operation of the procuring entity which


is duly certified by the Council as having the capacity to supply the required
goods and services.

A procuring entity, when applicable, shall have at least one member
representing SEs,

Registered small enterprises under RA 6977 that qualify as SE under this Act
shall, consistent with Section 4 of RA 9501, 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 and agencies annually.

The Council shall, in coordination with the Department of Budget and
management (DBM) and the Department of the Interior and Local Government
(DILG), issue the rules and regulations that shall implement the preferential right
accorded to SEs under this section including the limitations and restrictions in its
application.

SECTION 30. Incentives for Social Investors. - Social investors and other
institutions that contribute money or other forms of donation in the promotion and
development of SEs shall be entitled to the following tax incentives:

a) Equity investments and donations to an accredited SE shall be fully
deductible from the gross income of the investor or donor subject to
the conditions of Section 34 paragraph (c) of RA 8424 otherwise
known as the ‘ational Internal Revenue Code of 1997," as amended.

b) Dividends or other forms of profit shares received from an accredited
SE shall be exempt from income tax.

©) Donations, grants and contributions to an accredited SE shall be
exempt from donor's tax.

For the purpose of availing of the tax incentives under this Section, the
accreditation of the recipient SE by the Council shall be a sufficient evidence for
qualification as a social investor under this Act.

CHAPTER V
APPROPRIATION AND OTHER PROVISIONS.

SECTION 31. Appropriations. - To carry out the provisions of this Act, the
following amounts are appropriated as follows:

a) The sum of One hundred million pesos (P100,000,000.00) is hereby
appropriated as the initial operating fund which sum shall be sourced from
the President's Contingent Fund and voluntary contributions, grants and gifts
from both local and foreign sources as may be accepted by the Council. In
the subsequent years, the Council shall have a separate annual appropriation
under the DTI which shall be included in the annual General Appropriations
Act starting in the fiscal year immediately following the approval of this Act.


b) The aggregate sum of Three billion pesos (P3,000,000,000.00) for ten
(10) years is hereby appropriated for the establishment of the SEDF from the
share of the national government in the earnings of the PAGCOR and from
voluntary contributions, grants and gifts from both local and foreign sources
as may be accepted by the Council, in the following manner: on the first year,
One hundred million pesos (P100,000,000.00); on the second year, One
hundred fifty million pesos (P150,000,000.00); on the third year, two hundred
million pesos (P200,000,000.00); on the fourth year, two hundred fifty million
pesos (P250,000,000.00); on the fifth year, Three hundred million pesos
(P300,000,000.00); and every year thereafter until the tenth year, Five
hundred million pesos (P500,000,000.00) annually.

SECTION 32. Penalty Clause. - The penalty of imprisonment for not less
than six (6) months but not more than two (2) years or a fine of not less than
Twenty-five thousand pesos (P25,000.00) but not more than Fifty thousand pesos
(P50,000.00), or both imprisonment and fine, at the discretion of the court, shall be
imposed upon any person, corporation, government entity or agency who,
intentionally or by gross negligence, fails to provide the benefits, rights and
incentives granted to SE in violation of this Act, or perform any act in violation of its
provisions.

If the violation is committed by the SE or a government agency, the
members, officers, directors or trustees thereof who are directly involved shall be
held liable therefor.

If the violation is committed by the employment and agents who acted in
gross violation of the provisions of this Act, the officers, directors or trustees, or
incorporators of the SE shall be jointly and severally liable with the offending
employees, agents, and the enterprise.

If the offender is a public or employee, the offender shall, upon conviction,
suffer the necessary penalty of absolute disqualification.

SECTION 33. Non-Compliance with the Mandatory Allocation of Credit
Resources. - Administrative sanctions including a fine of not less than Five Hundred
Thousand Pesos (P500,000.00) shall be imposed by the Banko Sentral ng Pilipinas
upon any banking or lending institution who fails to provide the credit allocations
granted to SE in violation of Section 19 of this Act.

SECTION 34. Non-Impairment Clause. - Nothing in this Act shall be
construed to diminish, impair, or repeal the rights granted to marginalized sectors
under existing laws.

SECTION 35. Information Dissemination. - The Philippine Information
Agency (PIA), shall in coordination with the Council, the DTI, DA, and the DILG,
ensure the proper and adequate information dissemination of the contents and
benefits of this Act to the general public especially to its intended beneficiaries.


Within sixty days (60) after its effectivity, the Council shall distribute copies of
this Act to every department, agency, subdivision, and instrumentality of the
government, including government-owned and controlled corporations, regional and
provincial offices, and local governments.

All duly accredited SEs shall be given one (1) copy of this Act at cost.
Thereafter, every newly accredited SE shall be issued a copy of this Act together
with the rules and regulations promulgated pursuant to this Act.

SECTION 36. PRESENT Program in Government. - All agencies of the
government implementing a poverty alleviation program shall, in coordination with
the Council and within a period of five (5) years but in no case longer than ten (10)
years from the approval of this Act, incorporate the PRESENT Program in their
respective poverty alleviation programs as a tool for poverty reduction.

The Council shall, in coordination with the various government agencies with
poverty alleviation programs, prepare the appropriate beneficiaries thereof and
organize them into full-fledged SEs under the contemplation of this Act.

Within a period of five (5) years, the Council shall facilities the development
and dissemination of tools, and invest in the development of the capability of SEs to
plan, monitor and evaluate their social and financial performance and outcomes. The
Council shall evolve socially acceptable benchmarks for evaluating the performance
of SEs and incorporate them to effectively develop and regulate the sector.

SECTION 37. Social Entrepreneurship Education in Schools. - Toward
strategically developing the nation's human resource capability in social
entrepreneurship, the DepEd and the CHED shall cause the integration of SE content
and inclusion of SE courses in the curricula at all levels, especially in the secondary
and tertiary levels. This shall be part of the SE Capability Building and Sustainability
Program stated in Sec. 6 of this Act.

A continuing social entrepreneurship education program for primary and
secondary education shall include information regarding:

a) social issues and civic ways of addressing them

b) the producer as a steward of natural resources

c) the consumer as a responsible member of society and his responsibility
to develop critical awareness which is the responsibility to be alert and
questioning about the environmental and social impacts of the goods
and services he/she uses;

c.1) social concern which is the responsibility to be aware of the
impact of his consumption to society, especially the disadvantaged;
and

¢.2) environmental awareness which is the responsibility to
understand the environmental consequences of his use of natural


resources, consumption, recognizing his individual an social
responsibility to conserve natural resources for future generations;

All higher learning institutions and vocational schools are mandated to include
a subject on social entrepreneurship in their social studies program or in their
business, commerce, or economics courses.

SECTION 38. Applicability of Other Laws. - The Labor Code and all other
laws, the Social Security Act, the Medical Care Act, other social legislations, and all
other laws and executive orders that govern the relationship between the employer
and the employee shall apply to SE and its employees and that all employees
covered under this Act shall be entitled to the same benefits given to any regular
employee such as social security and healthcare benefits.

SECTION 39. Interpretation and Construction. - In case of doubt in the
meaning of nay provision of this Act or in the rules and regulations promulgated
pursuant to this Act, it shall be resolved in favor of SE and their stakeholders.

SECTION 40. Congressional Oversight Committee. - There is hereby created
a Congressional Oversight Committee on Social Enterprises composed of the
Chairman of the Senate Committee on Economic Affairs, Trade and Commerce and
the Chairman of the House Committee on Trade and Industry, four (4) members of
the Senate and four (4) members of the House of Representatives. The members
from the Senate shall be appointed by the Senate President from among the
members of the Senate Committee on Economic Affairs, Trade and Commerce based
on the proportional representation of the coalition therein. The members from the
House of Representatives shall be appointed by the Speaker from among the
members of the House committee on Trade and Industry based on the proportional
representation of the parties or coalitions therein.

The Oversight Committee, upon review and approval of the Implementing
Rules and Regulations of this Act shall become functus officio and thereafter cease
to exist: Provided, however, That the Council shall submit to the Committee on
Economic Affairs, Trade and Commerce of the Senate and the Committee on Trade
and Industry of the House of Representatives an annual report on the
implementation of this Act.

The appropriation for the oversight committee shall be charged to the budget
of both Houses of Congress in the annual General Appropriations Act.

SECTION 41. Social Enterprise Week. - In order to institute continuing
awareness on the importance of SEs as a viable government strategy in pursuing
poverty alleviation, the week of the month when this Act shall have been signed into
law shall be declared as the "Social Enterprise Week” and shall be celebrated
annually. The Council shall, through the NCSED, be responsible in organizing
activities for the event.


CHAPTER VI
FINAL PROVISIONS

SECTION 42. Implementing Rules and Regulations. - Within ninety (90) days
from the effectivity of this Act, the Secretary of Trade and Industry shall, in
consultation and coordination with the concerned government agencies and sector,
promulgate the necessary rules and regulations for the effective implementation of
this Act.

SECTION 43. Separability Clause. - If any provision or part of this Act is
declared invalid or unconstitutional, the remaining parts or provisions not effected
shall remain in full force and effect.

SECTION 44. Repealing Clause. - For purposes of this Act, Section 11 of RA
8425 and Sections 50, 52 and 53 of RA 9184 which are inconsistent with this Act are
hereby deemed amended. All other laws, executive orders, presidential decrees,
rules and regulation or parts thereof inconsistent with any provisions of this Act are
hereby repealed, amended or modified accordingly.

SECTION 45. Fffectivity. - This Act shall take effect fifteen (15) days after its

publication in the official Gazette or in two (2) national newspapers of general
circulation.

Approved,