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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
1st Regular Session 
House Bill No. ________ 
Introduced by Representatives ERIC G. YAP, EDVIC G. YAP, JOCELYN P. 
TULFO, RALPH TULFO, and JEFFREY SORIANO 
EXPLANATORY NOTE 
The 1987 Constitution promotes the optimum opportunity for all sectors of the 
country's economy to develop. Among the major sectors of the country’s economy is 
the Micro, Small, and Medium Enterprises (MSMEs). 
According to the Department of Trade and Industry (DTI), out of 957,620 business 
enterprises, 99.51% or 952,969 are MSMEs. In addition, MSMEs generated a total of 
5,380,815 jobs or 62.66% of the country’s total employment. Despite the pivotal role 
that MSMEs play in the development of the country’s vibrant economy, there is still 
lack of financing and credit programs that will strengthen the MSMEs and ensure their 
continuity.  
Furthermore, according to the Philippine Statistical Authority (PSA) as of May 2022, 
the country's unemployment rate during the COVID-19 rose to 6.2%, which is 
equivalent to 2.93 million jobless Filipinos. To curb the rapidly increasing 
unemployment rate, one of the wisest and most practical alternatives is to increase the 
number MSMEs that could generate a number of jobs and strengthen accessibility to 
microfinancing mechanisms to encourage more individuals to dwell into MSMEs.  
This bill seeks to promote the pivotal role of the MSMEs in the development of the 
country’s vibrant economy and to curb the increasing unemployment rate of the 
country. For this purpose, this bill will institutionalize the Pondo sa Pagbabago at Pag-
August 1, 2022
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asenso (P3) Program for the Small Business Corporation (SB Corp), as an attached 
agency and microfinancing arm of the DTI, in order to provide micro entrepreneurs a 
cheaper and more accessible financing and loan programs, especially after a series of 
hard lockdowns brought by the onset of the COVID-19 pandemic. This proposed 
measure will also mitigate informal sources of lending, which MSMEs are prone to. 
In view of the foregoing, approval of this bill is earnestly sought. 
ERIC G. YAP 
EDVIC G. YAP 
          JOCELYN P. TULFO 
JEFFREY SORIANO 
RALPH TULFO 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
1st Regular Session 
House Bill No. ________ 
Introduced by Representatives ERIC G. YAP, EDVIC G. YAP, JOCELYN P. 
TULFO, RALPH TULFO, and JEFFREY SORIANO 
AN ACT 
PROMOTING ENTREPRENEURSHIP BY ESTABLISHING A SOCIALIZED 
MICROFINANCING PROGRAM FOR MICRO ENTERPRISES THROUGH THE 
PONDO 
SA 
PAGBABAGO 
AT 
PAG-ASENSO 
PROGRAM, 
AND 
APPROPRIATING FUNDS 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. This Act shall be known as “Pondo sa Pagbabago at 
Pag-asenso Act” or the “P3 Act”. 
SEC. 2. Declaration of Policy. - It is the declared policy of the State to foster 
national development, promote inclusive growth, and reduce poverty by promoting 
the growth of micro enterprises that facilitate local job creation, production and trade 
in the country. Towards this end, the State shall develop policies, plans and programs, 
and initiate means to encourage entrepreneurial activities, and to ease the constraints 
and challenges to micro enterprises, particularly on access to financing. 
SEC. 3. Objectives. – The objectives of this Act are: 
a. To provide an affordable, accessible, and simple micro financing program
for the country’s micro enterprises, especially those in the poorest
populations;
b. To provide a better alternative to informal lenders or the so-called “5-6”
money lending system availed of by micro enterprises;
c.
To bring down the interest rate at which micro finance is made available to
micro enterprises; and
d. To boost the development of entrepreneurship and the micro, small and
medium enterprise (MSME) sector, particularly the micro enterprises.
SEC. 4. Creation of the Pondo sa Pagbabago at Pag-asenso (P3) Fund. – There 
is hereby created the Pondo sa Pagbabago at Pag-asenso Fund, hereinafter referred to 
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as the “P3 Fund”, which shall be lent out to qualified micro enterprises under such 
terms and conditions that will meet the purposes of this Act. 
 
The beneficiaries of the P3 Fund shall be the micro enterprises, as defined under 
Republic Act No. 6977, as amended, otherwise known as the “Magna Carta for Micro, 
Small and Medium Enterprises (MSMEs)”. 
 
The fund shall be primarily accessible through accredited partner financial 
institutions (PFIs) such as rural banks, thrift banks, development banks, cooperatives 
with license to lend, non-stock savings and loan associations, microfinance non-
government organizations, or lending companies. 
 
For efficient implementation and operation, cooperatives except cooperative 
banks and insurance cooperatives shall be under the sole supervision and examination 
of the Cooperative Development Authority (CDA); all other financial entities, 
corporations and financial intermediaries, such as non-government organizations, 
financing companies, non-stock savings and loan associations, microfinance non-
government organizations, and lending investors shall be under the Securities and 
Exchange Commission (SEC); banks shall be under the Bangko Sentral ng Pilipinas 
(BSP); and insurance companies shall be under the Insurance Commission (IC). 
 
Cooperative banks shall be under the supervision and examination of the CDA 
and BSP; while insurance cooperatives shall be under the supervision and 
examination of the CDA and Insurance Commission (IC). 
 
 
SEC. 5. Lead Implementing Agency. – The Small Business Corporation (SB 
Corp.), the financing arm of the Department of Trade and Industry (DTI), shall be the 
lead implementing agency for the P3 Fund. The SB Corp. shall handle the fund 
delivery to micro enterprises through the following modes: 
 
a. Direct lending; and 
b. Lending through accredited PFIs. 
 
 
With the goal to achieve greater outreach to all provinces and barangays of the 
country, financial technology-enabled systems and processes can be utilized in the 
implementation of the P3 program. 
 
 
To support annual administrative and operating expenses of the SB Corp., an 
amount of not more than five percent (5%) of the total loans disbursed can be used by 
the Corporation. 
 
 
SEC. 6. Features of the P3 Fund. – The P3 Fund shall have the following 
features;  
 
a. The loanable amount for individual loans shall be set and regularly 
reviewed by the Micro, Small and Medium Enterprise Development 
(MSMED) Council; 


 
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b. The allowable interest rate, which includes service fee and other charges, 
shall not exceed twelve percent (12%) per annum. Reasonable and actual 
cost of collection may be allowed upon proper justification; 
c. The interest earnings shall accrue to the P3 Fund; 
d. There shall be no collateral requirement from the P3 Fund loan 
beneficiaries; and 
e. The lenders shall have a collection mechanism, whereby payments are 
made on a daily, weekly, or monthly basis, or depending on the livelihood 
project income cycle. It shall be the duty of the lender to collect the loan 
principal and the interest payments from the borrower. 
 
 
SEC. 7. Policy Oversight Function. – The MSMED Council shall monitor the 
utilization and disbursements of the P3 Fund. It shall submit to the President of the 
Philippines and to Congress, through the Congressional Oversight Committee on 
Micro, Small and Medium Enterprise Development (COC-MSMED), a yearly report 
on the status of the P3 Fund. 
 
 
SEC. 8. Appropriations. – The initial amount for the implementation of this Act 
shall be charged against the current year’s appropriations of the Small Business 
Corporation. 
 
 
Thereafter, such amount necessary shall be included in the annual General 
Appropriations Act. 
 
 
SEC. 9. Implementing Rules and Regulations. – Within sixty (60) days from the 
approval of this Act, the DTI shall formulate and promulgate the necessary rules and 
regulations to implement the provisions of this Act. 
 
 
SEC. 10. Separability Clause. – If any part or section of this Act is declared 
unconstitutional, such declaration shall not affect in any manner other parts or 
sections hereof. 
 
 
SEC. 11. Repealing Clause. – Section 22 of Republic Act No. 8367 is hereby 
repealed. All laws, decrees, proclamations, issuances, or ordinances that are contrary 
to or inconsistent with the provisions of this Act are hereby amended, repealed or 
modified accordingly. 
 
 
SEC. 12. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
 
Approved,