EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
Senate Bill No.
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In tro d u ce d  by S enator Juan M iguel F. Zubiri
AN ACT
INSTITU TIO N ALIZIN G  THE POVERTY REDUCTION THROUGH SOCIAL 
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROMOTING SOCIAL 
ENTERPRISES W ITH THE POOR AS PRIMARY STAKEHOLDERS
EXPLANATORY NOTE
Social enterprises in many parts of the world are considered catalysts for inclusive 
and sustainable development. Unlike traditional enterprises, social enterprises engage in 
revenue generating activities and at the same time address social problems especially of 
those belonging to the vulnerable and marginalized sectors as part of their core activities.
In a study published by the British Council and the Philippine Social Enterprise 
Network, there is an estimated 164,473 social enterprises operating in the Philippines 
whose top objectives are to generate employment, alleviate poverty, and improve and 
empower local marginalized groups or communities. The findings point to the importance 
of generating and advocating support for the sector.
At present, social enterprises are treated in the same manner as traditional micro, 
small and medium enterprises. There is a need to create a framework that will define and 
identify their needs for them to be effective tools to encourage the participation of 
marginalized groups in entrepreneurial activities.
This bill, thus, proposes the establishment of the Social Entrepreneurship 
(PRESENT) Program as a flagship anti-poverty program of the government. It defines 
social enterprises as social mission-driven organizations that conduct economic activities 
providing goods or services directly related to their primary mission of improving the well­
being of the poor, basic and marginalized sectors and their living environment. This bill 
provides for incentives and benefits, including access to capital and other forms of 
financing, tax exemptions, marketing assistance, research and systems development, and 
preferential treatment of social enterprises in government procurement, among others.
In view of the foregoing, the passage of this bill is earnestly sought.
iAN MIGUEL F. ZU B IR I


EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
Senate Bill No. 105
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*19 
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Intro d u ce d  by S enator Juan M iguel F. Zubiri
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AN ACT
INSTITU TIO N ALIZIN G  THE POVERTY REDUCTION THROUGH SOCIAL 
ENTREPRENEURSHIP (PRESENT) PROGRAM AND PROMOTING SOCIAL 
ENTERPRISES W ITH THE POOR AS PRIMARY STAKEHOLDERS
Be it enacted by die Senate and House o f Representatives o f the Philippines in Congress 
assembled:
CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. This Act shall be known as the "Poverty Reduction Through 
Social Entrepreneurship (PRESENT) Act."
SEC. 2. Declaration of Policy. The State shall 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, raise standards 
of living, and improve quality of life for all. The State shall provide social justice in all phases of 
national development, value the dignity of every human person, and guarantee full respect for 
human rights.
The State shall ensure a more equitable distribution of opportunities, income, and wealth; 
sustained increase in the amount of goods and services produced by the nation for the benefit of 
the people; and improved productivity to raise 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.
Towards this end, the State shall pursue an inclusive growth strategy that promotes an 
environment conducive to the development and growth of a vibrant social enterprise sector 
engaged in poverty reduction, and economic and social development. It shall empower the poor 
as primary stakeholders in social enterprises, establish mechanisms essential to realize their 
potential and achieve their full growth, and extend the assistance necessary for their 
advancement. The State shall likewise provide technical and financial assistance, incentives and 
other services to enable social enterprises to advance a strong social entrepreneurship movement 
that will be instrumental in reducing poverty in the country.
SEC. 3. D efinition o f Terms. As used in this Act, the following terms shall mean:


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a) Basic Sectors 
refar to tho disadvantaged sectors o f Philippine society, namely: farmer- 
peasant, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in 
the informal sector, indigenous peoples and cultural communities, women, persons with 
disabilities, senior citizens, victims of calamities and disasters, youth and students, children, 
and urban poor as defined by Republic Act 8425, or the "Social Reform and Poverty Alleviation 
Act";
b) Economic Subsectors refer to networks o f 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 
social enterprises shall more effectively reach and benefit a greater number o f poor in poverty 
reduction programs;
c) Government Procuring Entity 
refers 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 services and implementing infrastructure 
projects;
d) Living Wage refers to the amount o f family income needed to provide for the family's food 
and non-food expenditures with sufficient allowance for savings and investments for social 
security so as to enable the fam ily to live and maintain a decent standard of human existence 
beyond mere subsistence level, taking into account all of the family's physiological, social and 
other needs;
e) Marginaiized Sectors refer to groups of people who are stigmatized or excluded by virtue of 
their physical, psychological, economic, social, or cultural circumstance;
f) 
Poor refers to individuals and families whose income fall below the poverty threshold as 
defined by the National Economic and Development Authority and/or cannot afford in a 
sustained manner to provide their minimum basic needs o f food, health, education, housing, 
and other essential amenities of life as defined by Republic Act 8425;
g) Sociai Enterprise refers to a social mission-driven organization, whether an association, sole 
proprietorship, partnership, cooperative, corporation or any other legal form, that conducts 
economic activities, and provide goods and/or services directly related to its primary mission 
of improving the well-being o f the poor, basic and marginalized sectors and their living 
environment. A social enterprise explicitly declares and pursues poverty reduction as its 
principal objective by purposefully rendering both transactional and transformational services. 
Social enterprises engages and invests in the poor to become effective workers, suppliers, 
clients and/or owners and 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


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back to the enterprise to sustain the fulfillment of its social mission, a social enterprise also 
uses its surplus or profits and mobilizes other resources to assist the poor to become partners 
in social enterprise or value chain management and governance and to become partners in 
community, sectoral and societal transformation.
A social enterprise registered as a sole proprietorship, partnership or corporation must 
fulfill the eligibilities set forth in Section 14 to avail of the benefits and incentives under this 
act.
h) Value Chains refer to value-adding economic activities that an enterprise is interlinked with in 
the process of producing goods and/or services to serve its chosen market. A value chain 
typically consists of: 1) raw materials processing, 2) inbound distribution or logistics, 3) 
manufacturing operations, 4) outbound distribution or logistics, 5) marketing and selling, and 
6) after-sales service. These activities are supported by purchasing or procurement, research 
and development, human resource development, and organizational development. A social 
enterprise that understands and manages its value chain improves its capability to create 
economic, environmental and social values to ensure the viability and sustainability of the 
enterprise, and maximize benefits to the poor and marginalized.
CHAPTER I I
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES
SEC. 4. Form ulation o f a Poverty Reduction Through Social Entrepreneurship 
(PRESENT) Program. -  The PRESENT Program shall be established as a flagship program of 
the government. The objective of the PRESENT Program is to progressively improve the positions 
of and benefits to the poor, marginalized, and underprivileged. It shall do this by identifying 
strategic economic subsectors with the potentials for growth and where the poor are concentrated 
or could be major players. In the process, it shall identify and develop key social enterprises and 
resource institutions as partners in providing transactional and transformational services towards 
poverty reduction. Social enterprises shall be developed as vehicles to ensure that the poor benefit 
the most from sustainable subsector development.
The formulation of the PRESENT program shall be guided by the following principles:
a) Promotion of sustainable programs that support the development of inclusive value 
chains in key economic subsectors, towards reducing inequality in incomes and 
increase self-reliance among the poor;
b) Enabling social enterprises to overcome constraints and to take advantage of 
opportunities for enhancing the position and benefits of the poor and their living 
environments including those that harness innovative approaches in addressing social 
problems;
c) Development of sustainable mechanisms for the provision of quality and accessible 
social services to the poor;
d) Encouraging the participation of the poor, basic, and marginalized sectors;
e) Promotion of gender-sensitivity by ensuring women's equal rights and access to social 
enterprises resources;


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f) Ecological soundness in the pursuit of sustainable and equitable development;
g) Incorporation of the PRESENT Program in the government's poverty reduction drive 
as a major sustainable and comprehensive strategy; and
h) Rationalization of poverty reduction programs by streamlining and coordinating the 
various anti-poverty programs of the government to reduce inefficiency and 
duplication and to improve the effectiveness of each program.
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 in 
planning social enterprise development interventions.
PRESENT medium-term and annual development plans shall be formulated in synchrony 
with the medium-term development plan of the national government.
SEC. 5. Social Enterprise Developm ent Council. -  To carry out the policy declared 
under this Act, a Social Enterprise Development Council, hereinafter referred to as the "Council," 
is hereby created as an agency attached to the Office of the President. 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) Social enterprise sector head representative, as co-chairperson;
b) Secretary of Trade and Industry, as co-chairperson;
c) Secretary of Agriculture, as co-vice chairperson;
d) Lead Convenor of the National Anti-Poverty Council (NAPC), as co-vice chairperson;
e) Secretary of Social Welfare and Development;
f) Director-General of the National Economic Development Authority (NEDA);
g) Secretary of Finance;
h) Secretary of the Interior and Local Government;
i) 
Secretary of Labor and Employment;
j) Secretary of Science and Technology;
k) Secretary of Education;
l) 
Secretary of Agrarian Reform;
m) Secretary of Health;
n) Secretary of Environment and Natural Resources;
o) Chairperson of the Cooperative Development Authority (CDA);
p) Nine (9) representatives from social enterprises, three (3) representatives each from 
main island grouping of Luzon, Visayas, and Mindanao;
q) Three (3) representatives from social enterprise service institutions; and
r) Three (3) representatives from social enterprise advocacy groups, as members.


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Cabinet members may designate a permanent representative in case they fail to attend 
its meetings. The designated permanent representative of any of the Cabinet members of the 
Council must hold a position not lower than a bureau director.
The social enterprise sector head, the representatives of the social enterprises from the 
main island group of Luzon, Visayas, and Mindanao, the social enterprise service institutions, and 
the social enterprise advocacy groups shall be chosen by the President from among the nominees 
submitted by their respective national organizations to service in the Council for a term of three 
(3) years. These representatives must be conversant in the theory and practice of social enterprise 
and committed to the policies and programs provided under this Act.
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.
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 deveiopment program for social enterprises.
The Council may create an Executive Committee of seven (7) members elected by its 
members from among themselves or their designated permanent representatives, with at least 
three (3) members representing social enterprises, and with the authority to act for the Council, 
and within the specific authority granted by the Council.
SEC. 6. Center fo r Social Enterprise Development. -There shall be established a 
Center for Social Enterprise Development (CSED) under the supervision of the Council and to be 
headed by an Executive Director, which shall have the primary responsibility of implementing 
comprehensive policies for social enterprise development. Specifically, the CSED shall be 
responsible for;
a) The development and implementation of the PRESENT Program as approved by the 
Council with the following components:
1. Formulation and implementation of social entrepreneurship-oriented strategic 
economic sub-sector development plans that shall serve as the basis for major 
policies, projects and activities;
2. Capacity Building and Sustainability -  The CSED wiil work with qualified Social 
Enterprise Service Institutions and other intermediaries to design and deliver 
training and education in social entrepreneurship development, institutional 
start-up or strengthening, human resource competency and skills training, 
business pianning 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;


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3. Research and Development -  The CSED in coordination with the NEDA, DOST, 
DTI, and other appropriate agencies, research institutions, and intermediaries, 
shall develop and enhance a research and development system that:
i. 
Provides studies on opportunities for poverty reduction and social 
enterprise development in key economic subsectors and other inputs 
for the Council to undertake strategic planning for programs and 
projects;
ii. 
Equip social enterprises and support institutions with services and 
technologies that are appropriate for enhancing the participation 
and benefits of the poor in various economic subsectors; and;
iii. 
Equip social enterprises and support institutions with innovative, 
and sustainable approaches to improve access of the poor to quality 
basic social services.
4. Information and Marketing Assistance -  The CSED shall promote the 
development and expansion of local and foreign markets for the products and 
services of social enterprises. Towards this, the CSED shall:
i. 
Establish a marketing assistance program that will assist social 
enterprises match supply with demand in both domestic and foreign 
markets, as well as promote social enterprise products and services 
through tri-media, trade fairs and trade missions; and
ii. 
Develop install and sustain a market information system for social 
enterprises with the assistance of the DTI and DOT. All government 
departments, agencies, bureaus, research institutions, as well as 
the Local Government Units (LGUs) shall consolidate and 
continuously update all relevant information and data that would 
be of use to social enterprises on a periodic basis and make such 
data available in a dedicated website on the internet.
b) Establishment and implementation of criteria and process for the qualification of social 
enterprises that shall be eligible for support and other incentives as provided by this 
Act and as approved by the Council;
c) Identification of sources of financing for the social enterprise sector such as but not 
limited to grants, loans and equity financing for enterprise incubation, start-up and 
expansion;
d) Management of multi-stakeholder convergence programs and activities among 
government agencies and private organizations in support of the PRESENT Program;
e) Coordination with the concerned government agencies and local government units in 
the development and implementation of the PRESENT Program and projects; and
f) Coordination with social enterprise stakeholders, including people's organizations, 
non-government organizations, and multi-sectoral and multi-disciplinary pool of 
experts from the academe, practicing professionals, business, industry, youth, women


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and other concerned sectors to provide advice and technical assistance on matters 
pertaining to social enterprises.
CHAPTER I I I
INCENTIVES AND BENEFITS FOR SOCIAL ENTERPRISES
SEC. 7. Social Enterprise Developm ent Fund. -T h e re  shall be included in the budget 
of the DTI under the annual General Appropriations Act an initial amount of Nine Hundred Million 
Pesos (Php900,000,000.00) for the establishment o f a Social Enterprise Development Fund 
(SEDF) which shall be utilized as grants to SEs for the plans set forth under the PRESENT program.
THE SEDF shall be allocated for:
a) Six Hundred Million Pesos (Php 600,000,000.00) for value-chain financing; and
b) Three Hundred Million Pesos (Php 300,000,000.00) for enterprise development 
services.
After the first year of implementation, such sums as may be necessary to fund the SEDF 
shall be included in the budget o f the DTI under the annual General Appropriations Act.
Plans for the utilization of the SEDF shall be developed by the CSED for approval by the 
Council.
SEC. 8. Special C redit Windows. -  The Land Bank of the Philippines, Development 
Bank of the Philippines and other government financial institutions shall establish special credit 
windows for the following purposes:
a) Credit line for business development loan or working capital loan to cover the operational and 
management expenses of an 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;
b) 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;
c) Value chain financing to cover any of the value chain activities such as production, processing 
and marketing;
d) Domestic letter of credit or trust receipt to provide a stand-by-credit facility for the social 
enterprise borrower for the purchase o f product inputs, equipment, machinery, implements, 
and spare parts, whereby payment o f 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
e) Revolving Credit Line for re-lending to finance the livelihood project requirements of end- 
borrowers.
SEC. 9. Social Enterprise Guarantee and S urety Fund. -  There shall be established 
a Social Enterprise Guarantee and Surety Fund (SEGSF) which shall be funded from equity 
contributions of government financial institutions. The SEGSF shall be used to provide guarantee 
cover to participating financial institutions and other parties in extending financing to social 
enterprises. The SEGSF shall be administered by the Small Business Corporation to enable


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qualified social enterprises to access non-collateralized and other appropriate financing while 
mitigating the risks involved in social enterprise sector lending: Provided, That the SEGSF may 
also be used to cover the performance bond of social enterprises for their transactions.
SEC. 10. Public Procurem ent fo r Social Enterprises. -  For purposes of government 
procurement, the Government Procurement Policy Board (GPPB) shall recommend and approve 
policies to facilitate the full participation of social enterprises in public procurement processes and 
to ensure the maximum public benefit and impact of government procurement projects. In 
support of these policies, the DBM shall direct line agencies of government to include at least 
10% of its annual budget for Maintenance and Other Operating Expenses and Capital Outlay 
specifically for goods procured and services contracted from social enterprises.
SEC. 11. Insurance fo r Social Enterprises. -T he Insurance Commission shall issue 
the necessary rules and regulations and implement measures to ensure that the insurance 
industry shall provide insurance products, both life and non-life, for social enterprises and their 
stakeholders among the poor. Furthermore, social enterprises shall be eligible to be licensed 
agents or delivery channels for their clients and constituents.
SEC. 12. E lig ib ility fo r Benefits and Incentives. -  In the case of social enterprises 
organized as stock corporations, partnerships or sole proprietorships, the following requirements 
shall apply to become eligible for benefits and incentives provided by this Act:
a) A social enterprise must not be organized as 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 social enterprise from accepting subcontracts from large private business enterprises or 
firms or from joining in cooperative or joint-venture activities with other social enterprises or 
foundations practicing Corporate Social Responsibility (CSR); and
b) A social enterprise must plow back at least sixty percent (60%) of its total expenditures and 
profits to the enterprise for the benefit of the poor, and engage in practices that optimize the 
benefits for the poor through the provision of living wages, above-market pricing for 
economically disadvantaged producers and suppliers, and other such best practices that 
distribute the profit generated by the enterprise.
CHAPTER IV
APPROPRIATIONS AND OTHER PROVISIONS
SEC. 13. Roie o f Local Governm ent Units (LGUs) in  Social Enterprise 
Development. -  LGUs shall be encouraged to incorporate viable social enterprise development 
plans in their local plans and collaborate with social enterprises.
SEC. 14. Social Entrepreneurship Education in  Schools. -  Toward strategically 
developing the nation's human resource capability in social entrepreneurship, the DepEd, TESDA 
and the CHED shall cause the integration of social enterprise content and inclusion of social 
enterprise courses in the curricula at all levels, especially in the secondary and tertiary levels. A 
continuing social entrepreneurship education program for out-of-school youth and adults shall 
likewise be developed and undertaken.


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SEC. 15. Social Enterprise Week. -  In order to institute continuing awareness on the 
importance of social enterprises 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 CSED, 
be responsible in organizing activities for the event.
SEC. 16. Appropriations. -  The amount necessary to implement the provisions of this 
Act shall be charged against the current year's appropriations of the Office of the President. 
Thereafter, such sums as may be necessary for its continued implementation shall be included in 
the annual General Appropriations Act.
The budgetary requirements of the cooperating agencies shall be incorporated in their 
respective budgets. The CSED may raise funds from other sources for specific projects as may be 
authorized by law.
SEC. 17. Transitory Provision. -  Within a period of five years, the CSED shall facilitate 
the development and dissemination of tools, and invest in the development of the capability of 
social enterprises to plan, monitor and evaluate their social and financial performance and 
outcomes. Further, the CSED shall evolve socially acceptable benchmarks for evaluating the 
performance of social enterprises and incorporate such to more effectively develop and regulate 
the sector.
SEC. 18. Im plem enting Rules and Regulations. -  Within ninety (90) days form the 
effectivity of this Act, the Department of Trade and Industry shall, in consultation and coordination 
with the concerned government agencies, promulgate the necessary rules and regulations for the 
effective implementation of this Act.
SEC. 19. S eparability Clause. -  If any provision or part of this Act is declared invalid 
or unconstitutional, the remaining parts or provisions not affected shall remain in full force and 
effect.
SEC. 20. Repealing Clause. -  All laws decrees, ordinances, rules and regulations, 
executive order or administrative order and other presidential issuances inconsistent in this act 
are hereby repealed, amended or modified accordingly.
SEC. 21. E ffectivity Clause. -  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,