NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHIILIPPINES }
First Regular Ses

HOUSE OF REPRESENTATIVES

#.B.No, 2825

introduced by Representative Ralph G. Recto

AN ACT
EXPANDING THE COVERAGE OF MICRO ENTERPRISES AS BENEFICIARIES
OF THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 6977, AS AMENDED

EXPLANATORY NOTE

The State upheld the policy "to promote, support, strengthen and encourage

ctors,

the growth and development of small and medium enterprises in all productive

of the economy” with the enactment of Republic Act No, 6977 or the Magna Carta for

e Micra Small and Medium Enterprise

Small Enterprises m 199i. TL cr
Development (MSMED) Council and the Small Business Finance and Guarantec

Corporation to aid in the fulfilinant of the guig rincsples enshrined in the law. The

law aiso established ruies in the pravision of technical and other forms of assistance

to MSMES and required all lending institutions i sct aside part of their loan portfolio

and make it availatie for small enterp These interventions were made in

recognition of the MSME’s potential to generate employment and boost economc

growth.

Nonetheless, problems and issues hindering the MSMEs from achieving their

potentials stili persist despite the enactment af the Ret mabhe Act No, 6977 and its

subsequent amendments. One of these impediments is the outdated detinitian of the

business activities or enterprises that belong to the MSME category. While the Magna

Carta for Small Enterpnses and ite subsequent amendments orovided the MSMED

Council the power to review and adjust the definition ot business establishments

considering inflation and other esonomic incicatars, the nition of MSMEs remamed



unchanged since the enactment of Republic Act No. 9501 in 2008. This creates an

‘onerous situation where a good number cf small enterprises are barred from enjoying

the benefits, programs and plans to improve thew productivity and competitiveness.

In order to correct this situation, tis bill proposes to redefine the asset value

thresholds of the Micro and Small Enterprise categories in order to make more

privileges and benefits available to nicre enierprises. This txt propeses to amend!

zs those wath total assets of not more than P7.5 mullion

definition of micro enterprises:
will now be defined as those

instead of P3 millon, Consequently, small enterpase
than P7.5 million to PS millinn. This bill, thus,

with total assets ranging trom mm
the direction lad out m the MSME Development Plan 2017-2022 in

reinforct

addressing the key challenges and constraints that prevent the MSME sector from

full potential in boosting the country’s industrial growth. Redefining the

realizing

total asset value of MSME categories would reinvigorate the business envi ronment,

protect critical econonnc drivers, and sustam the Phikppine economic momentum in

the near future.

In view of the faregoung, approval of this bull s eamestly sought,


NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Sessioit j

HOUSE OF REPRESENTATIVES

H. B. No. 2825

introduced by Representative Raiph G. Recto

AN ACT
EXPANDING THE COVERAGE OF MICRO ENTERPRISES AS BENEFICIARIES
OF THE MAGNA CARTA FOR MICRO, SMALL AND MEDIUM ENTERPRISES,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 6977, AS AMENDED

fe it enacted by the Senate and House of Representatives of the Plulyypies 17
Congress assembled.

Section 1. Sectian 3 of the Magna Carta for Micro, Small and Medium

or Repunke Act No. 6977, as amended, 1s hereby further amended to read

Enterprises
as Follows:

(MSPIES) as

tum Enterg

3. Micro, Smail and Me

Benefic! -~ MSMEs shall be defined as any business activity or

5 services, whether

enterprise engaged in sndustry, agri
single proprietorship, cooperative, partnership er corporation whose

total assets, inclusive of those arising irom loans but exclusive of the

land on which the part entity's office, plant and equipment

ave value falling under the following categories:
[P3.996,060] P7,500,000
5-990] MORE THAN P7,500,000 TO

are situated, must
micro: not more thal
small: [P3,060,001-715,8
P15,000,000
medium [P15,600,001-F 196,000,009] MORE THAN
P15,000,000 TO P100,000,000.

KKK


Sec. 2. lang, ~ ‘Within thirty (30) days upon

the appraval of this Act, the Department of Trade and Industry shall,  coordinatian

Implementing Rules aid Re

4 Medium Enterprise Development Council, promulgate the

with the Micro, Smati

necessary implementing rules and regulations to effectively implement this Act.

Sec, 3. Repeating Clause. ~ All aes, decrees, arders, rules and regulations oF

isions of this Act ata hereby repealed,

parts thercof inconsistent with any of the

pr

amended or modified accordingly.
Sec. 4. Fifectivity Cause. ~ THs AK

completa publication in the Official Gazette es 16 at least two (2) nevispapcrs of general

alt take effect fiftgen (15) days after its

circulation.

Approved,