1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1830 
Introduced by Representative Jose Manuel F. Alba 
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 SUPPORT, BENEFITS, AND 
APPROPRIATIONS THEREFOR 
EXPLANATORY NOTE 
The Philippine Constitution mandates the promotion of social justice 
and self-reliance alongside creating economic opportunities. It also put 
emphasis to raise the quality of life for all, especially the under-privileged. 
The country, however, is continuously faced with poverty. Alongside the 
private sector, academe, and civil society organizations, the Philippine 
government is continuously looking for innovative means to ensure that this 
constitutional mandate is fulfilled. 
Experiences in the past thought us that to address this perennial 
challenge, it requires appropriate systems, organization, structures, and 
resources. It also requires new social investment models and capacity 
building programs to help new breed entrepreneurs achieve significant 
positive impact. 
July 14, 2025
11:36 am


2 
There are many social enterprises able to prove its models to create 
wealth while performing its social mission. As a poverty reduction strategy, 
it creates social and economic value that benefits the poor as its primary 
stakeholders. These stakeholders are engaged as partners in the value chain 
(either as workers, suppliers, clients, co-developer, co-producer) and in 
social enterprise governance. 
This bill provides the framework for planning and implementation of a 
National Poverty Reduction through Social Entrepreneurship (PRESENT) 
Program. It also seeks to provide incentives and benefits to promote the 
growth of social enterprises, and to integrate it into the overall poverty 
reduction strategy of the government. 
The support and passage of this bill is also a means for the country to 
further contribute to the achievement of the national targets in conformance 
to the United Nations’ 2030 Sustainable Development Goals, particularly 
Zero Hunger, Zero Poverty, Reduced Inequality, Decent Jobs, and Inclusive, 
Sustainable Communities. 
It is important to note that amendments to the bill have been 
approved by the Committee on Micro, Small and Medium Enterprise 
Development on December 13, 2023 and recommendations of the 
Committee on Ways & Means on March 12, 2024, during the 19th Congress, 
were applied to the current bill.  
For the foregoing reasons, the immediate consideration and approval 
of this bill is earnestly sought. 
JOSE MANUEL F. ALBA 
Representative, 1st District, Bukidnon 


1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1830 
Introduced by Representative Jose Manuel F. Alba 
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 SUPPORT, BENEFITS, AND 
APPROPRIATIONS THEREFOR 
Be it enacted by the Senate and House of Representatives of 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.  Statement of Policy. – As provided in the Constitution of the 
Republic of the Philippines, it is hereby declared the policy of the State: 
a) 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;


2 
 
b) To provide social justice in all phases of national development, value 
the dignity of every human person, and guarantee full respect for 
human rights; 
c) To ensure that the national economy provides for 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; 
d) To affirm the role of women in nation building and ensure the 
fundamental equality of men and women before the law; 
e) To 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; 
f) To protect Filipino enterprises against unfair foreign competition and 
trade practices; 
g) To recognize 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 
people’s livelihoods; and 
h) To 
ensure 
the 
empowerment 
and 
self-reliance 
of 
Filipinos, 
emancipated from poverty towards economic independence. 
 
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, and 
economic and social development. The State shall likewise ensure the 
provision of free technical and financial assistance, incentives and other 
services that will enable them to develop into viable and vital anti-poverty 
agents, and a strong social entrepreneurship movement which will be 
instrumental in reducing poverty in the country.  
 


3 
 
Further, it shall empower the marginalized sectors 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, through the creation of an enabling policy environment for 
social enterprises, affirms its commitment to the Sustainable Development 
Goals (SDGs). Social enterprises shall form part of national and local 
development plans toward accelerating the achievement of the SDGs, 
especially the targets of zero poverty; no hunger; gender equality; decent 
work and inclusive economic growth; reducing inequalities; and sustainable 
production and consumption.    
 
The State shall pursue a low carbon development pathway to which 
social enterprises engaged in renewable energy, environmental protection, 
circular economy, and other such activities, can contribute. This is 
consistent with the commitment of the State to its Nationally Determined 
Contribution (NDC) under the global Paris Climate Agreement, which it 
ratified in 2017.  
 
Sec. 3. Definition of Terms. – As used in this Act:   
 
a) Assets refers to all kinds of properties, real or personal, owned by 
the social entrepreneur as defined in paragraph (w) 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, possessed or used by the social 
enterprise (SE) for the conduct of its business; 
 
b) Capability building refers to the process of enhancing the viability 
and sustainability of social enterprises. It pertains to: 1) education, 
training, coaching and other learning events such as study tours; 2) 


4 
 
technical, consultancy and advisory services; 3) assistance in 
organizational systems development; 4) technology incubation, 
development and dissemination; 5) value chain and subsector 
development; 6) conduct of SE trade fairs and missions; 7) 
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; 
 
c) Civil society organizations refers to private, voluntary, and non-
profit 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; 
 
d) Council refers to the National Enterprise Development Council; 
 
e) Cooperative 
refers 
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 Republic Act No. (RA) 6938, as amended by RA 9520, or 
the “Philippine Cooperative Code of 2008”; 
 
f) 
Economic subsectors refers to networks of related actors and 
enterprises performing various functions in value chains.  These 


5 
 
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; 
 
g) Fair trade refers to a trading partnership based on dialogue, 
transparency and respect, and which seeks greater equity in 
international trade and the transformation and adaptation 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; 
 
h) Foundation refers to the categorization of a non-profit organization 
duly registered 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; 
 
i) 
Gender and Development or GAD refers to the development 
perspective and process that are participatory and empowering, 
equitable, sustainable, free from violence, respectful of human 
rights, and supportive of self-determination and actualization of 
human potentials. It seeks to achieve gender equality as a 


6 
 
fundamental value that should be reflected in development choices; 
seeks to transform society’s social, economic and political 
structures and questions the validity of the gender roles they 
ascribed to women and men; contends that women are active 
agents of development and not just passive recipients of 
development assistance; and stresses the need of women to 
organize themselves and participate in political processes to 
strengthen their legal rights; 
 
j) 
Marginalized refers to basic sectors and disadvantaged or 
vulnerable persons or groups who are mostly living in poverty and 
have little to no access to: land and other resources; basic social 
and economic services, such as health care, education, water and 
sanitation, employment and livelihood opportunities, housing, 
social security, physical infrastructure; and the justice system. 
 
As defined in RA 9710, or “The Magna Carta of Women”, these 
include the following sectors, groups, and persons: 
 
(1) “Small Farmers and Rural Workers” refers to those who are 
engaged directly or indirectly in small farms and forest areas, 
workers in commercial farms and plantations, whether paid or 
unpaid, regular or season-bound. These shall include, but are 
not limited to, (i) small farmers who own or are still amortizing 
for lands that is not more than three (3) hectares, tenants, 
leaseholders, and stewards; and (ii) rural workers who are either 
wage earners, self-employed, unpaid family workers directly and 
personally 
engaged 
in 
agriculture, 
small-scale 
mining, 
handicrafts, and other related farm and off-farm activities; 
 
(2) “Fisherfolk” refers to those directly or indirectly engaged in 
taking, culturing, or processing fishery or aquatic resources. 
These include, but are not to be limited to, women engaged in 


7 
 
fishing in municipal waters, coastal and marine areas, women 
workers in commercial fishing and aquaculture, vendors and 
processors of fish and coastal products, and subsistence 
producers such as shell-gatherers, managers, and producers of 
mangrove resources, and other related producers; 
 
(3) “Urban Poor” refers to those residing in urban and urbanizable 
slum or blighted areas, with or without the benefit of security of 
abode, where the income of the head of the family cannot afford 
in a sustained manner to provide for the family’s basic needs of 
food, health, education, housing, and other essentials in life; 
 
(4) “Workers in the Formal Economy” refers to those who are 
employed by any person acting directly or indirectly in the 
interest of an employer in relation to an employee and shall 
include the government and all its branches, subdivisions, and 
instrumentalities, 
all 
government-owned 
and 
-controlled 
corporations and institutions, as well as non-profit private 
institutions or organizations; 
 
(5) “Workers in the Informal Economy” refers to self-employed, 
occasionally or personally hired, subcontracted, paid and unpaid 
family workers in household incorporated and unincorporated 
enterprises, including home workers, micro-entrepreneurs and 
producers, and operators of sari-sari stores and all other 
categories who suffer from violation of workers’ rights; 
 
(6) “Migrant Workers” refers to Filipinos who are to be engaged, are 
engaged, or have been engaged in a remunerated activity in a 
State of which they are not legal residents, whether documented 
or undocumented; 
 
 


8 
 
(7) “Indigenous Peoples” refers to a group of people or homogenous 
societies identified by self-ascription and ascription by other, 
who have continuously lived as organized community on 
communally bounded and defined territory, and who have, 
under claims of ownership since time immemorial, occupied, 
possessed customs, tradition, and other distinctive cultural 
traits, or who have, through resistance to political, social, and 
cultural inroads of colonization, non-indigenous religions and 
culture, became historically differentiated from the majority of 
Filipinos. They shall likewise include peoples who are regarded 
as indigenous on account of their descent from the populations 
which inhabited the country, at the time of conquest or 
colonization, or at the time of inroads of non-indigenous 
religions and cultures, or the establishment of present state 
boundaries, who retain some or all of their own social, economic, 
cultural, and political institutions, but who may have been 
displaced from their traditional domains or who may have 
resettled outside their ancestral domains as defined under 
Section 3 (h), Chapter II of RA 8371, or “The Indigenous Peoples 
Rights Act of 1997” (IPRA of 1997); 
 
(8) “Children” refers to those who are below eighteen (18) years of 
age or over but are unable to fully take care of themselves or 
protect themselves from abuse, neglect, cruelty, exploitation, or 
discrimination because of a physical or mental disability or 
condition; 
 
(9) “Senior Citizens” refers to those sixty (60) years of age and 
above; 
 
(10) “Persons with Disabilities” refers to those who are suffering from 
restriction or different abilities, as a result of a mental, physical, 


9 
 
or sensory impairment to perform an activity in the manner or 
within the range considered normal for a human being; 
 
(11) “Solo Parents” refers to those who fall under the category of a 
solo parent defined under RA 11861, or the “Expanded Solo 
Parents Welfare Act”; 
 
(12) Further, as defined in RA 11054, or the “Organic Law for the 
Bangsamoro 
Autonomous 
Region 
in 
Muslim 
Mindanao”, 
marginalized groups shall include “Bangsamoro People”, to wit:   
“Bangsamoro People” refers to those who, at the advent of the 
Spanish colonization, were considered natives or original 
inhabitants of Mindanao and the Sulu archipelago and its 
adjacent islands, whether of mixed or full blood, shall have the 
right identity themselves, their spouses and descendants, as 
Bangsamoro; and 
 
(12) Further, as articulated in RA 9710, marginalized groups shall 
include women in all aforementioned sectors or groups. 
 
k) Microfinance refers 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; 
 
l) Minimum basic needs refers 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); and 
inclusion (assistive device/technology, personal assistance, sign 
language interpreter, accessibility); 


10 
 
 
m) 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 the 
National Internal Revenue Code of 1997, as amended, 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 
of the net income of which, inures to the benefit of any private 
individual; 
 
n) People's Organization or PO refers to a self-help group belonging to the 
basic sectors 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; 
 
o) Persons with Disability refers to those who have long-term physical, 
mental, intellectual, or sensory impairments which in interaction with 
various barriers may hinder their full and effective participation in 
society on an equal basis with others. Persons who may fall in this 
definition include the following: persons with psychosocial disability, 
persons with autism, persons with down syndrome, persons who are 
blind, persons with low vision, persons hard of hearing, the deaf, 
persons with rare diseases, and all other persons who will be certified 
under the disability assessment and determination system; 
 
p) Poor refers to individuals and families whose income fall below the 
poverty threshold as defined by the National Economic and 
Development Authority (NEDA) 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 


11 
 
defined under RA 8425, or the “Social Reform and Poverty Alleviation 
Act”; it may also be the state of deprivation – such as poor health, 
lack of education, inadequate living standard, lack of income (as one 
of several factors considered), disempowerment, poor quality of work, 
and threat from violence; 
 
q) Poverty reduction/alleviation refers to overcoming the income, 
resource, and capability deprivation among the poor as defined in the 
preceding paragraph and the marginalized sectors as defined in 
paragraph (j) hereof; 
 
r) Procuring Entity refers to any branch, department, office, agency, or 
instrumentality of the government, including state universities and 
colleges, government-owned or -controlled corporations, government 
financial institutions, and local government units procuring Goods, 
Consulting Services and Infrastructure Projects; 
 
s) SEGFP refers to the SE Guarantee Fund Pool created under this Act; 
 
t) Social development refers 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; 
 
u) Social Enterprise (SE) refers to a social mission-driven organization 
that creates wealth while contributing to social well-being and 
ecological integrity, and seeks to operate in a sustainable manner.  
In a developing country context, many social enterprises pursue 
poverty reduction or improving the quality of life of specific segments 
of the marginalized and vulnerable sectors as a major objective. 
As such, social enterprises have two (2) core attributes that 
distinguish them from regular businesses: 
1. Transformational engagement with marginalized sectors 
which is in contrast to a purely transactional approach 


12 
 
implemented by regular businesses. An SE does not only 
improve the condition of the marginalized as workers, 
suppliers and clients, but it also provides transformational 
services that improve the position and capacity of the poor to 
lift themselves out of poverty and marginalization. It also 
develops the poor and marginalized as partners in SE or 
value chain management/governance or in community, 
sectoral and societal transformation. Beyond partnership, 
SEs enable the poor and marginalized and the women of 
these sectors to become co-owners, supervisors, managers, 
and decision-makers or to become leaders and stakeholders 
of their social enterprises. 
 
2. Adherence to a distributive enterprise philosophy, which is in 
contrast to the philosophy of creation and accumulation of 
wealth for the owners of a regular business. as such, a social 
enterprise undertakes a combination of practices that 
distribute wealth and create value among their poor and 
marginalized stakeholders including the following: 
 Purposively investing in the poor/marginalized to become 
effective worker-partners, supplier-partners, or client-
partners, including transitioning workers in the informal 
economy to become stakeholders of the social enterprise; 
 Purposively 
investing 
in 
the 
women 
of 
these 
poor/marginalized sectors as co-equal stakeholders of the 
social enterprise; 
 Paying living wages to their workers; 
 Engaging in transparent negotiations with their supplier 
communities towards offering fair or above-market prices; 
 Distributing 
dividends, 
fair 
trade 
premiums, 
or 
implementing other forms of profit-sharing schemes; and 
 Reinvesting a significant percentage of its profits to the 
fulfillment of its social mission, including providing 


13 
 
transformational services to the poor and marginalized as 
stakeholders of sustainable development. 
 
v) Social Enterprise Resource Institution refers to an organization that 
provides financial or other forms of assistance to social enterprises for 
them to become viable and sustainable including trainings, education 
and other capacity-building measures, research and development, 
advocacy and other support activities; 
 
w) 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; 
 
x) Social entrepreneurship refers to innovations designed to explicitly 
improve 
societal 
well-being, 
housed 
within 
entrepreneurial 
organizations, which initiate, guide or contribute to change in society; 
 
y) Social Investors refers to 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 
poverty reduction, concern for environmental protection, strong 
organizational governance, and a desire for a more economically just 
world; 
 
z) Social value refers to the additional benefit to society of procuring a 
good or service, over and above the direct benefit and value of the 
good or service to the procuring entity. Additional benefits may 
include support for poor communities or marginalized groups, 
advancement of human rights and social justice, protection of the 
environment, and community development; 
 
aa) Transactional services refers to enterprise-related assistance to the 


14 
 
poor that involve an exchange of goods or services for money including 
being workers, suppliers, or clients; 
 
bb) Transformational services refers to the assistance to 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. This shall include building 
the leadership and management capacity and role of the poor in 
social enterprises; 
 
cc) Value chain refers to value-adding economic activities that an 
enterprise is interlinked with in the process of producing goods or 
services to serve its chosen market. A value chain typically consists 
of: 1) inbound distribution 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. 
An SE that understands and manages its value chain improves its 
capability to create economic, environmental and social values 
toward improving the position and benefits of the poor in the value 
chain and toward ensuring the viability and sustainability of the 
enterprise; and 
 
dd) Vulnerable sectors refers to groups who are at risk of any potential 
event, loss or danger.  
 
CHAPTER II 
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE 
 
Sec. 4. Social Enterprise (SE); General Concept and Coverage. – A social 
enterprise (SE), for purposes of this Act, refers to a Social Enterprise with the 
Marginalized as Primary Stakeholders (SEMPS).    


15 
 
An SE employs any of the following development strategies in the 
pursuit of its social mission: 
a) Empowerment strategy which refers to 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; 
b) Social inclusion strategy which refers to the development strategy 
that assists marginalized groups of people in society who, for 
reasons of poverty, geographical inaccessibility, culture, language, 
age, sex, gender, migrant status, disability or other disadvantage, 
have not benefited from health, education, employment and other 
opportunities, and who are relegated to the sidelines of political 
persuasion, social negotiation, and economic bargaining 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; 
c) Intermediation strategy which refers 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 product development and 
marketing support using the principles of fair trade to marginalized 
producers.  An 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; and 
d) Resource mobilization strategy which refers to a development 
strategy intended to generate income from the sale of products and 
services of an SE in order to finance or subsidize the operations of 
its core development program or development interventions among 
the marginalized sectors. 


16 
 
In the case of social enterprises organized as stock corporations, 
partnerships, or sole proprietorships, these social enterprises should invest 
at least 60% of their net revenues to sustain the fulfillment of their social 
mission and provide transformational services for the well-being of the 
marginalized sector they serve. They 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.  
 
Sec. 5. Establishment of the Poverty Reduction Through Social 
Entrepreneurship (PRESENT) Program. – To promote the development of the 
SE sector, a comprehensive and fully-integrated Poverty Reduction Through 
Social Entrepreneurship (PRESENT) Program is hereby established, and shall 
be guided by the following principles: 
a) Incorporating the PRESENT Program in the government’s poverty 
reduction drive as a major sustainable and comprehensive strategy;  
b) Rationalizing 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; 
c) Ensuring 
people’s 
participation, 
access 
to 
information, 
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; 
e) 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) Upholding gender equality, disability, and social inclusion by 
ensuring access to social enterprise resources;  


17 
 
g) Promoting ecological soundness in the pursuit of sustainable and 
equitable development; and 
h) Developing sustainable mechanisms for the provision of quality and 
accessible social services to the poor. 
 
The planning framework of the PRESENT Program and its planning 
process shall ensure that the marginalized sectors are engaged as primary 
stakeholders. It shall add value and complement ecosystem-based, area-
based, community-based 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 SEMPS and 
resource institutions as partners in strategic economic subsectors that have 
the potential for growth and where large numbers of the poor are 
concentrated.  SEMPS shall be developed as vehicles to ensure that the 
marginalized 
sectors 
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. 
 
Sec. 6. Eligibility 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 
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, supplier-owners, supervisors and managers, active members 
and leaders in governing bodies of the SE or its allied organizations;  
b) Invest a substantive part of its surplus, profits or mobilize other 
resources to assist the poor to become partners in SE or value chain 


18 
 
management/governance or to become partners in community, 
sectoral and societal transformation;  
c) Pursue 
a 
pro-active 
contribution 
to 
resolving 
social 
and 
environmental problems and generate profit or surplus with due 
regard to social and environmental costs;  
d) 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; 
e) Distribute a substantive part of the wealth created by the enterprise 
to the poor in the form of services, dividends and other forms of 
benefits, and payments and incentives for products or services 
rendered consistent with the principles of fair trade;    
f) Be duly registered with the appropriate agencies as provided under 
RA 11232, or the “Revised Corporation Code of the Philippines”; RA 
9520; RA 9501, as amended, or the “Magna Carta for Micro, Small 
and Medium Enterprises (MSMEs)”; RA 9178, or the “Barangay 
Micro Business Enterprises (BMBEs) Act of 2002”; RA 10693, or the 
“Microfinance NGOs Act”; and other relevant laws; and 
g) Be financially sustainable: Provided, That social enterprises that 
have not achieved financial sustainability may be eligible to 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. 
 
Social enterprise resource institutions may also avail of support from 
government as partners for building the capability and sustainability as well 
as developing an enabling environment for social enterprises to flourish: 
Provided, That they have: 
a) a registration as a legal entity in the Philippines; 
b) a dedicated program supporting social enterprises; 
c) a track record of at least three (3) years of implementation of a 
dedicated SE program; and 
d) at least three (3) qualified social enterprises vouching for their them. 


19 
 
International 
social 
enterprise 
resource 
institutions 
and 
their 
subsidiaries operating in the Philippines must partner with a qualified local 
social enterprise resource institution to avail of government support.   
 
Financial sustainability shall not be a prerequisite for the availment of 
incentives and benefits under this Act: Provided, That social enterprises that 
have not achieved financial sustainability may be eligible to 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. 
 
Sec. 7. Additional Eligibility for Benefits and Incentives in case of Stock 
Corporations, Partnerships or Sole Proprietorships. — In the case of social 
enterprises 
organized 
as 
stock 
corporations, 
partnerships, 
or 
sole 
proprietorships, the SE shall: 
a) Invest at least 60% of its net revenues to sustain the fulfillment of 
their social mission and provide transformational services for the 
well-being of the marginalized sector they serve; and 
b) 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. 
 
CHAPTER III 
NATIONAL ENTERPRISE DEVELOPMENT COUNCIL 
 
Sec. 8. National Enterprise Development Council. – The existing Micro, 
Small and Medium Enterprise Development (MSMED) Council, which is an 
attached agency of the Department of Trade and Industry (DTI), shall be 
strengthened and expanded to effectively spur the growth and development 


20 
 
of MSMEs and SEs throughout the country, and to carry out the policy 
declared under this Act. It shall now be known as the National Enterprise 
Development Council (NEDC), hereinafter referred to as the Council.  
 
The members of the Council shall be the existing members of the 
MSMED Council, and an additional one (1) representative to be designated 
from the social enterprise sector.  
 
In addition to the existing functions of the MSMED Council as provided 
under RA 9501, the Council shall serve as the primary agency tasked to 
carry out the promotion, growth and development of social enterprises in the 
country. 
 
Sec. 9. SE Committee. -  To ensure that the Council is able to fulfill its 
additional mandate, there shall be an SE Committee under the Council that 
shall perform the following specific duties: 
a) Promote social enterprise as a key strategy for reducing poverty and 
enabling inclusive growth; 
b) Provide oversight for the implementation of the PRESENT Program 
and activities for SEs of the Bureau of Small and Medium Enterprise 
Development (BSMED); 
c) Establish policies, plans, programs and projects to develop and 
promote SE as a tool for poverty reduction as part of a 
comprehensive Social Enterprise Development Plan fully integrated 
and consistent with national development objectives and plans; 
d) Monitor and evaluate the performance of programs and projects for 
SEs of BSMED for appropriate incentives; 
e) Submit annual and other periodic reports to the Council; 
f) 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 


21 
 
g) Perform such other functions as may be necessary for its effective 
operations 
and 
the 
continued 
enhancement, 
growth 
and 
development of the SE sector. 
 
To realize these powers and functions, the SE Committee shall be 
composed of the DTI, Department of Social Welfare and Development 
(DSWD), National Anti-Poverty Commission (NAPC), relevant Council 
members and the following representatives from the SE sector and SE 
resource institutions: 
a) Nine (9) representatives from SEs, three (3) representatives each 
from the main island groupings of Luzon, Visayas, and Mindanao; 
b) Three (3) representatives from SE service institutions; and 
c) Three (3) representatives from SE advocacy groups. 
 
The SE Committee shall issue a certificate of qualification based on the 
guidelines provided by the Council for this purpose: Provided, That the 
certificate of qualification shall be valid only for such period as may be 
prescribed under the implementing rules and regulations of this Act. 
 
Sec. 10. Powers and Functions. – Aside from the existing functions of 
the MSMED Council under RA 9501, the Council shall have the following 
powers and functions:  
a) Formulate policies and plans to develop and promote, coordinate, 
synergize, integrate, and ensure compatibility and complementation 
of policies and programs for SEs as well as other anti-poverty 
reduction initiatives consistent with national development objectives; 
b) Formulate policies and plans to ensure the resilience and 
preparedness of social enterprises for disaster risk reduction and 
management as well as develop capacities of social enterprises to 
respond, recover and build back better in the face disasters and 
pandemics; 
c) Oversee the successful implementation of the PRESENT Program 
and other SE programs; 


22 
 
d)  Identify and access sources of financing to expand the SE sector; 
e)  Monitor and evaluate the performance of programs and projects for 
appropriate incentives; 
f) Call upon any government agency to carry out and implement 
programs and projects identified by the Council and 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; 
g) Call upon people’s organizations, non-government organizations, the 
academe and other sectors to provide advice on matters pertaining 
to SEs and the conduct of transactional and transformational 
services to farmers, producers, workers, consumers and other 
stakeholders; 
h)  Submit annual and other periodic reports to the President and the 
Congress of the Philippines through the Congressional Oversight 
Committee; 
i) Promulgate such rules and regulations and exercise such other 
powers and functions as may be necessary to carry out the purposes 
of this Act, including guidelines for the administration of grant 
windows provided for in Section 24 of this Act; 
j) Put in place mechanisms for accountability to marginalized 
stakeholders being served;  
k) Align and synchronize the provision of support programs, benefits 
and incentives for SEs provided for in this Act; and  
l) Perform such other functions as may be necessary for its effective 
operations 
and 
the 
continued 
enhancement, 
growth 
and 
development of the SE sector. 
 
Sec. 11. Term and Appointment of SE Sector Representatives. – Within 
ninety (90) days from the approval of this Act, the Council shall confirm 
representatives of social enterprises and social enterprise resource 
institutions. Said SE and SE resource institution representatives must have 


23 
 
been screened and pre-selected by the SE sector convened by the DTI, the 
Department of Agriculture (DA), and the DSWD, in consultation with 
established social enterprises and networks of SEs.  
 
The islands of Luzon, Visayas, and Mindanao shall each have two (2) 
representatives who will be appointed for a term of three (3) years. While 
another three (3) representatives each representing Luzon, Visayas, and 
Mindanao shall be appointed for a term of two (2) years to ensure continuity. 
Upon the expiration of all the terms of these first set of officers, all terms of 
SE sector representatives shall be for three (3) years. No person shall be 
appointed to serve as an SE representative in the Council for more than a 
period of two (2) terms or more than six (6) years. 
 
Any vacancy in the Council arising from the death, incapacity, 
resignation, or termination of the term of an appointed SE representative 
shall be filled up within ninety (90) days from the occurrence of the said 
vacancy. All nominations to the vacancy shall be submitted within sixty (60) 
days from the occurrence of such. This process shall be consistent with the 
previous appointment process. 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. 
 
Sec. 12. Lead Agency. – The DTI shall serve as the central planning, 
coordinating, implementing, and monitoring body of the Program. 
The BSMED of the DTI shall undertake the programs for the SE sector. 
In addition to its existing functions, the BSMED shall perform the following 
functions: 
a) Provide SEMPS with capability-training and education through the 
Social Enterprise Capability Building and Sustainability Program 
created under Section 15 of this Act; 
b) Develop and enhance a research and development system which 
shall equip every SE with innovative and sustainable approaches 


24 
 
that ensure improvement in the access to basic social services by the 
poor pursuant to Section 19 of this Act;  
c) Manage a Social Enterprise Marketing Assistance Program (SMAP) 
that will ensure the generation of the highest possible income for the 
SEs pursuant to Section 20 of this Act; 
d) Implement capability building projects approved by the Council;  
e) Supervise capability-building projects approved by the Council 
implemented 
through 
reputable 
Social 
Enterprise 
Resource 
Institutions contracted for the purpose; and 
f) Research on existing policies and programs of other countries for 
benchmarking purposes, such as support system, ecosystem, 
programs, and regulations. 
 
The BSMED shall be strengthened and expanded to ensure the effective 
implementation of all SE programs. The necessary plantilla positions shall 
be submitted to the Department of Budget and Management (DBM) for 
evaluation and approval. 
 
In implementing the programs for the SE sector, the BSMED shall 
coordinate with the University of the Philippines Institute for Small Scale 
Industries (UP-ISSI), the Technical Education and Skills Development 
Authority (TESDA), the Department of Information and Communications 
Technology (DICT), the Department of Science and Technology (DOST), the 
NAPC, the Philippine Commission on Women (PCW), civil society 
organizations, including women’s organizations, and other relevant agencies, 
state universities and colleges. 
 
Sec. 13. Role of LGUs in SE Development. – Local government units 
(LGUs) shall incorporate viable SE Development Plans in their local 
development planning and to collaborate with SEMPS. The Gender and 
Development (GAD) Fund of LGUs may be used toward the design and 
implementation of SE development plans at the local level.  
 


25 
 
Grants from government agencies, such as the Department of the 
Interior and Local Government (DILG), for civil society toward local 
development may also be used to support social enterprises. 
 
Sec. 14. Social Entrepreneurship Education in Schools. – Toward 
strategically developing the nation’s human resource capability in social 
entrepreneurship, the Department of Education (DepEd), TESDA, and the 
Commission on Higher Education (CHED) shall cause the integration of SE 
content and inclusion of SE courses in the curricula to the extent applicable 
at all levels, especially in the secondary and tertiary levels. This shall be part 
of the SE Capability and Sustainability Program stated in this Act.  
 
A continuing social enterprise education program for out-of-school 
youth and adults shall likewise be developed and undertaken. The 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 their 
responsibility to develop critical awareness which is the responsibility 
to be alert and questioning about environmental and social impacts 
of the goods and services they use; 
d) Social concern which is the responsibility to be aware of the impact of 
their consumption to society, especially to the disadvantaged; 
e) Environmental awareness which is the responsibility to understand 
the consequences of their use of natural resources, consumption, 
recognizing their individual and social responsibility to conserve 
natural resources for future generations; and 
f) Gender justice, or the full equality and equity between men and 
women in all spheres of life, resulting in women jointly, and on an 
equal basis with men, defining and shaping the policies, structures, 
and decisions that affect their lives and society as a whole.  
 


26 
 
All higher learning institutions and vocational schools shall integrate 
the SE content to the extent applicable to include a subject on social 
entrepreneurship in their social studies program or in their business, 
commerce, or economics courses. 
 
 
CHAPTER IV 
DEVELOPMENT OF SOCIAL ENTERPRISES 
 
Sec. 15. SE Capability Building and Sustainability Program. – There is 
hereby established a SE Capability Building and Sustainability Program, the 
primary objective of which is to guarantee the viability and sustainability of 
SEMPS 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, product development competitiveness, business matching 
activities, 
trade 
fairs 
and 
missions, 
policy 
advocacy, 
gender 
and 
development, 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 of 2009”, and RA 10121, or the “Philippine Disaster Risk Reduction and 
Management Act of 2010.”  
 
Sec. 16. Creation of SE Guarantee Fund Pool. – Within five (5) years 
from the effectivity of this Act, subject to the availability of funds, and upon 
determination by the Council, a Social Enterprise Guarantee Fund Pool 


27 
 
(SEGFP) shall be created. It shall be taken from the five percent (5%) of the 
preceding year budget surplus of the government-owned and -controlled 
corporations and government financial institutions as contribution to the 
SEGFP 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 a trust account with the Land 
Bank of the Philippines (LBP), the Development Bank of the Philippines 
(DBP) and the Philippine Guarantee Corporation (PHILGUARANTEE) 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 LBP, the DBP and the 
PHILGUARANTEE, shall draw up the mechanics and administrative 
arrangements and issue the implementing guidelines for the fund pool. 
 
Sec. 17. Cash Incentives for Persons with Disabilities (PWD). - Subject to 
the availability of funds, this Act shall provide a cash incentive for every 
PWD, in accordance with RA 7277, or the "Magna Carta for Disabled 
Persons", and other marginalized sectors as may be provided by this law, 
representing at least twenty-five percent (25%) of the daily minimum wage. 
 
Sec. 18. Social Enterprise Recovery and Rehabilitation Fund. - To 
prepare for or respond to climate risks and impacts, disaster vulnerabilities 
and hazards, humanitarian emergencies (including those arising from armed 
conflict), epidemics, financial crises or economic shocks, and other such 
events, a Social Enterprise Recovery and Rehabilitation Fund is hereby 
established to build the resilience of social enterprises. This shall include 


28 
 
stimulus grants, climate adaptation initiatives, risk insurance, and other 
such facilities and products to improve the ability of SEs to withstand 
shocks and stresses. The Fund shall be lodged with the DTI. 
 
Sec. 19. Social Enterprise Research and Development System. - The 
Council, in coordination with the DOST, the NEDA, the DTI, and other 
appropriate agencies and research institutions, shall develop and enhance a 
research and development system that:   
a) Provides 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) Equips SEs and support institutions with technologies that are 
appropriate for enhancing the participation and benefits of the poor 
in various economic subsectors; and  
c) Equips SEs and support institutions with innovative and sustainable 
approaches to improve grassroots innovation and access of the poor 
to quality basic social services.  
 
This system must incorporate gender analysis, a systematic analytical 
process based on sex-disaggregated and gender information, which is used 
to identify, understand, and describe gender differences and the relevance of 
gender roles and power dynamics in a particular context. 
 
Sec. 20.  Social Enterprise Marketing Infrastructure Development. - The 
Council shall promote the development and expansion of local and foreign 
markets for the products and services of SEMPS, guided by the principles of 
fair trade.  Consistent with this, the Council shall: 
a) establish an 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; and 
b) develop, install and sustain an SE market information system 
(SMIN) with the assistance of the DTI and the DICT which shall be 


29 
 
called the SE Marketing Information Network (SMIN). 
 
Within five (5) years from the approval of this Act, the SMIN shall be set 
up from the level of the municipal, city and provincial LGUs, the regional 
and up to the Council level, 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 on a dedicated website on the internet. Data shall 
be gender-disaggregated as far as possible. Compliance with the relevant 
laws, rules, and regulations concerning data privacy shall be ensured.  
 
The SMAP shall include a program to build the capability and improve 
the access of social enterprises and their stakeholders among the poor to 
ICT infrastructure to effectively participate in the SMIN. 
 
The SMIN shall provide information and marketing services related to 
products of SEs which shall include the following: 
a) Supply data; 
b) Demand data; 
c) Price and price trends; 
d) Product standards; 
e) Directory of, but not limited to SEs, traders, key market centers, 
processors and business institutions both at the national and local 
levels; 
f) Information and technology generated from research institutions; 


30 
 
g) International, regional and local market forecasts; and 
h) Resource accounting data. 
 
 
 
CHAPTER V  
FINANCING AND BENEFITS 
 
Sec. 21. Hybrid Financing. – Social enterprises shall be supported 
through hybrid financing to enable them to provide a combination of 
transactional and transformational services to the marginalized sectors, 
groups or persons they serve. Given the unique nature of SEs as wealth-
creating organizations that pursue their social mission to improve societal 
well-being in ways that are ecologically and financially sustainable, they 
need to be supported through hybrid financing that entails a combination of 
grants or loans and other financial instruments.  
 
Sec. 22. Special Credit Windows. – In addition to the special credit 
windows as provided under SECTION 16 of RA 8425, banks and other 
lending institutions are encouraged to provide concessional financial 
packages for qualified social enterprises, in accordance with and to the 
extent allowed by the enabling provisions of their respective charters or 
applicable laws. 
 
Credit 
to 
qualified 
social 
enterprises 
that 
meet 
the 
eligibilty 
requirements of other mandated credit under  RA 11901, or “The 
Agriculture, Fisheries, and Rural Development Financing Enhancement Act 
of 2022”, RA 11293, or the “Philippine Innovation Act”,  RA 10878, or “An 
Act Strengthening and Institutionalizing Direct Credit Support of the Land 
Bank of the Philippines to Agrarian Reform Beneficiaries, Small Farmers and 
Fisherfolk, Further Amending Republic Act No. 3844, otherwise Known as 
the ‘Agricultural Land Reform Code’, as amended”, and RA 9178, among 
others, shall be considered as compliance with this requirement. 
Notwithstanding compliance with the foregoing mandated credit, banks and 
other lending institutions shall not be precluded from providing further 


31 
 
credit to qualified social enterprises. 
 
The Small Business Corporation (SB Corp.) shall be mandated to 
provide loans to qualified social enterprises, subject to the SB Corp.’s 
existing principles and standards of granting loans. 
 
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. 
 
 
Lending institutions covered by this Act are required to furnish the 
Council on a quarterly basis a regular report on their loans to social 
enterprises. 
 
Sec. 23.  Special Credit Window Purposes. – The special credit window 
provided under Section 22 of this Act may be used for the following 
purposes:  
a) 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; 
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 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 


32 
 
and conditions of the credit; 
e) Revolving Credit Line for re-lending to finance the livelihood project 
requirements of end-borrowers for qualified social enterprises; 
f) A special credit line for women-led SEs or SEs that support women, 
particularly those in the agricultural and informal sectors. Women 
shall have no barriers to economic participation as provided for in 
RA 7192, or the “Women in Development and Nation Building Act”; 
and 
g)  Multi-purpose loans. 
 
Sec. 24. Grant facility. - Within five (5) years from the effectivity of this 
Act, and subject to the availability of funds, the Council shall work with the 
appropriate government agencies to establish grant facilities for social 
enterprises in accordance with their respective mandates. 
 
The grants to qualified social enterprises and resource institutions shall 
be used for the performance and conduct of their mission toward poverty 
reduction, sustainable development, promotion of gender and social justice, 
environmental conservation, climate action, improvement in economic 
welfare of the poor and marginalized sectors, and for post-graduate 
scholarship programs.  
 
There shall be three (3) windows under this fund facility, namely: 
capacity-building grant; start-up enterprise grant; and ecosystem-building 
grant. The Council shall formulate the guidelines for the management and 
implementation of grant assistance.  
 
Sec. 25. Tax Deduction.  – Social enterprises that hire employees from 
the database under Republic Act No. 11315, otherwise known as “The 
Community-Based Monitoring System Act,” shall be entitled to an additional 
deduction from gross income, equivalent to twenty-five percent (25%) of the 
total amount paid as salaries and wages to the said employees, subject to 
Section 34 of the National Internal Revenue Code of 1997, as amended. 


33 
 
The Department of Social Welfare and Development, in consultation 
with the Bureau of Internal Revenue, shall issue the necessary guidelines 
for the implementation of this provision. 
 
Sec. 26. Preferential Rights. – Without prejudice to preferential rights 
already available to specific enterprises or organizations under other laws, 
qualified SEMPS 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 government units. 
 
Such a preferential right is anchored not just in economic efficiency but 
in social values which provide long-term benefits to society. As defined in 
this bill, social value refers to the additional benefit to society of procuring a 
good or service, over and above the direct benefit and value of the good or 
service to the procuring entity. 
 
These social values include, inter alia, poverty reduction, sustainable 
development, environmental conservation, climate action, community 
development, and gender and social justice. As such, the determination of 
government procurement shall factor in social values.   
 
Such a preferential right, however, shall not be prejudicial to the 
interests of the government and the public.  
 
The government of the Philippines, its bureaus, offices, and agencies 
shall allocate at least twenty percent (20%) of the total procurement value of 
goods and services supplied to procuring entities annually or the allocation 
by line agencies of at least ten percent (10%) of their annual budget for 
Maintenance and Other Operating Expenses (MOOE) and Capital Outlay 
(CO) specifically for goods procured and services contracted from social 
enterprises, using either of the following negotiated procurement in 


34 
 
accordance with RA 9184, or the “Government Procurement Reform Act” 
and its implementing rules and regulations:  
a) Negotiated Procurement for NGOs. - When an appropriation law or 
ordinance earmarks an amount to be specifically contracted out to 
NGOs, the procuring entity may enter into a Memorandum of 
Agreement with an NGO, subject to the guidelines issued by the 
Government Procurement Policy Board (GPPB) for the purpose; 
b) Negotiated Procurement for Community Participation. - In the 
interest of project sustainability or to achieve certain specific social 
objectives, it is desirable in selected projects, or its components, to 
call for the participation of local communities through community or 
social groups, or members thereof in the delivery of goods and simple 
infrastracture projects, subject to the guidelines issued by the GPPB; 
and 
c) Other procurement modalities deemed appropriate for social 
enterprises. 
 
Should an enterprise be both an MSME and an SE, the allocation shall 
be limited to twenty percent (20%) of the total procurement value of goods 
and services supplied to procuring entities annually. 
 
Furthermore, on government procurement process, the Council shall 
coordinate with the GPPB in the issuance of appropriate public procurement 
guidelines for social enterprises, consistent with RA 9184 and its IRR.  
 
Sec. 27. Insurance for Social Enterprises. - The 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, SEMPS shall be assisted to become eligible and effective 
insurance providers to their clients and constituents. 


35 
 
Sec. 28. Support for Social Investors and SE Resource Institutions. – The 
Council shall develop an incentive program that fosters a community of 
social investors and resource institutions supportive of social enterprises. 
 
CHAPTER VI 
APPROPRIATIONS AND OTHER PROVISIONS 
 
Sec. 29. Appropriations. – The amount necessary for the initial 
implementation of this Act shall be charged against the current year’s 
appropriations of the DTI and the concerned agencies. Thereafter, such sum 
as may be necessary for the continued implementation shall be included in 
the annual General Appropriations Act. 
 
Sec. 30. Penal Clause. – Any person who, intentionally or by gross 
negligence, fails to provide the benefits, rights and incentives granted to SEs 
in violation of this Act, or performs any act in violation of its provisions, 
shall be imposed the penalty of imprisonment of not less than six (6) months 
but not more than two (2) years, or a fine of not less than Two hundred fifty 
thousand pesos (P250,000), or both, at the discretion of the court.  
 
If a corporation or any juridical entity is found to have violated the 
provisions of this Act, the officers, directors, members or trustees thereof 
shall be held liable, in accordance with the Revised Corporation Code, and 
other applicable laws. 
 
Corporations and other juridical entities, financial or otherwise, found 
misrepresenting themselves as an SE shall be caused to pay double the 
benefits it reaped from this program through the taxes it was able to save 
when it misrepresented itself as an SE. In addition, the officers of the 
juridical entity who misrepresented itself as an SE shall be liable for a fine of 
Five hundred thousand pesos (P500,000.00), or imprisonment of not less 
than two (2) years, or both, at the discretion of the court.  


36 
 
If the violation was committed by a government official or employee, 
such official or employee shall be terminated from the service with forfeiture 
of all the benefits due him, in addition to the fine or imprisonment 
mentioned above. 
 
Sec. 31. Joint Congressional Oversight Committee. – Upon the effectivity 
of this Act, a Congressional Oversight Committee, hereinafter referred to as 
the PRESENT Oversight Committee, is hereby constituted. This Committee 
shall set the guidelines and overall framework for the monitoring of the 
implementation of this Act. It shall likewise determine inherent weaknesses 
in the law and recommend necessary remedial legislation or executive 
measures.  
 
The PRESENT Oversight Committee shall be composed of fourteen (14) 
members, with the chairpersons of the Committee on Micro, Small and 
Medium Enterprise Development of the House of Representatives, and the 
Committee on Trade, Commerce and Entrepreneurship of the Senate as Co-
Chairpersons; and six (6) members from each House, to be designated by 
the Speaker of the House of Representatives, and the Senate President, 
respectively. 
 
For purposes of determining remedial legislation, the PRESENT 
Oversight Committee shall, within six (6) years after the effectivity of this 
Act, conduct a sunset review which shall include a systematic evaluation of 
the impact of this Act, accomplishments of the program, and the 
performance of its implementing agencies. 
 
Sec. 32. Implementing Rules and Regulations. – Within ninety (90) days 
from the approval of this Act, the DTI shall, in consultation and coordination 
with the concerned government agencies and social enterprise sector, 
formulate 
the 
necessary 
rules 
and 
regulations 
for 
the 
effective 
implementation of this Act. 


37 
 
Sec. 33. Separability. – The provisions of this Act are hereby declared 
to be separable. If any provision of this Act shall be held unconstitutional, 
the remainder of this Act not otherwise affected shall remain in full force 
and effect. 
 
Sec. 34. Repealing Clause. – All laws, executive orders, rules and 
regulations, or parts thereof, inconsistent herewith are hereby repealed or 
modified accordingly. 
 
Sec. 35. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
 
Approved,