NINETEENTH CONGRESS   
) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
EXPLANATORY NOTE 
Until the present, the hindrance that most Filipinos face in putting up their own 
businesses is not only the lack of capital, but even the lack of access to financing 
opportunities. 
This is why it is very important to promote our MSMEs and give them access to 
capital. Data shows that as of 2017, there are 924,721 business enterprises operating in the 
Philippines. Of these, 99.56% (816,920,677) are MSMEs, while only 0.44% (4,044) are large 
enterprises. Of the total number of MSMEs, 89.59% (828,436) are micro enterprises, 9.56% 
(88,412) are small enterprises, and 0.41% (3,829) are medium enterprises. MSMEs also 
generated a total of 4,922,251 jobs in 2017 versus 2,909,838 for large enterprises. 
Despite this, MSMEs are not provided enough assistance by the government. Thus, 
this measure, among others, provides for a program where: 
(1) Requirements for loan applications and approval are very basic, and there is no
collateral requirement;
(2) Loan proceeds are exclusively used for capital;
(3) Interests are very close to prevailing bank rates;
(4) The lenders have a pragmatic collection mechanism; and
(5) The mode of payment is on a daily or weekly basis.
In view of the foregoing, immediate approval of this bill is earnestly requested. 
RUFUS B. RODRIGUEZ 
August 14, 2023
8:00 am
8855


NINETEENTH CONGRESS   
) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
AN ACT 
INSTITUTIONALIZING 
DEVELOPMENT, 
ASSISTANCE 
AND 
MICROFINANCE 
PROGRAMS FOR LIVELIHOODS, ESTABLISHING AND PROMOTING ANTI-POVERTY 
AND INCLUSIVE GROWTH POLICIES WHICH ARE SUPPORTIVE OF MICRO, SMALL, 
AND MEDIUM ENTERPRISES (MSMEs), ALLOCATING FUNDS THEREFOR, AND FOR 
OTHER PURPOSES  
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
Section 1. Short Title.  This Act shall be known as the “Puhunan, Tulungan, 
Kaunlaran (PTK) Act.” 
Section 2. Declaration of Policy. It shall be the policy of the State to promote 
genuine inclusive growth and alleviate poverty. 
It is likewise the policy of the State to promote a just and dynamic social order that 
shall ensure prosperity, promote full employment, a rising standard of living and an improved 
quality of life for all. In pursuit of this, the State shall endeavour to develop a program that 
will ensure that all of its citizens are equipped with or can readily access the necessary 
capital to pursue opportunities and uplift their lives. 
The 1987 Constitution provides that all sectors of the economy and all regions of the 
country shall be given optimum opportunity to develop. Private enterprises, including 
corporations, cooperatives, and similar collective organizations, shall be encouraged to 
broaden the base of their ownership. 
Access to finance and technical support shall be the core policy of this Act. To 
operationalize this policy, it shall be ensured that: (a) The process for obtaining micro-
financing, grants and technical support in the Philippines shall be simple and practical; (b) 
The loan proceeds shall be exclusively used for capital; and (c) Interests shall not be 
unconscionable and not higher than prevailing bank rates.  
Section 3. PTK Five-Star Program. The Department of Trade and Industry (DTI), in 
coordination with the Department of Interior and Local Government (DILG), Department of 
Agriculture (DA), Department of Science and Technology (DOST), Department of Tourism 
(DOT), National Economic and Development Authority (NEDA), and the Technical Education 
and Skills Development Authority (TESDA) shall develop a comprehensive program for the 
development of micro, small and medium enterprises (MSMEs) in all regions of the country. 
The goal of the program is to protect the capital of small proprietors, ensure the success of 
their MSMEs, and transform these MSMEs into five-star businesses by providing them with 
assistance and the necessary resources in order to help their businesses flourish.   
The DTI shall be guided by the following principles in the development of the PTK 
Five-Star Program: 
a. The Program shall be national in scope but shall be tailored to fit the business
environment, market demands and available resources of each administrative
region;
8855


 
b. The DTI shall create a registry for all MSMEs per region based on their size 
category (i.e., micro, small or medium) and business area (i.e., agriculture, 
livestock, fisheries, food processing, fabric and clothing, eco-tourism activities, 
pottery and handicrafts, furniture and hardwood, information and technology, 
etc.); 
 
c. Each region shall choose a maximum of five (5) priority business areas to 
develop in order to reap the benefits of efficiency and specialization; 
 
d. As much as possible, each region shall be encouraged to choose a diversified 
priority business portfolio in order to hedge for risks brought about by natural 
calamities and changing market demands;  
 
e. To facilitate the implementation of this Act, each region shall establish a 
proprietor’s guild for each of their priority business areas;   
 
f. Free technical and administrative support, including, but not limited to, product 
development, skills and leadership training, packaging and design, quality 
control, market promotion, client or supplier matching, and financial literacy and 
planning, shall be made available to MSMEs falling under the five (5) priority 
business areas in their respective regions; 
 
g. Every year, the five (5) top-performing enterprises per size and category in each 
region shall receive a Five-Star award and shall be eligible for grants, not less 
than ten percent (10%) of their current capital, to be used solely for further 
business capitalization; 
 
h. Every medium-sized enterprise that evolves into a large enterprise through the 
help of the PTK Five-Star Program shall likewise be eligible for a one-time grant 
of Twenty Five Thousand Pesos (P25,000) to be used solely for further business 
capitalization; 
 
i. 
There shall be a mandatory review of the PTK Five-Star program every three (3) 
years in order to ensure that the program meets the present market demands. 
 
Section 4. PTK Loan Program. In addition to the PTK Five-Star Program, the DTI, 
in consultation with the National Anti-Poverty Commission (NAPC) and the Bangko Sentral 
ng Pilipinas (BSP) shall develop a loan program catering exclusively to micro-enterprises in 
need of capital, whether or not they fall under the priority business areas of their respective 
regions. 
 
The DTI shall be guided by the following principles in the development of the loan 
program:  
 
a. The loans shall be extended only to borrowers who have satisfied the 
requirements under this Act; 
 
b. Each loan shall not exceed Ten Thousand Pesos (P10,000) for first time 
borrowers; Thirty Thousand Pesos (P30,000) for second time borrowers; and Two 
Hundred and Fifty Thousand Pesos (P250,000) for those borrowing for a third 
time or oftener, Provided, that the latter shall be borrowers in good standing. The 
DTI is hereby authorized to amend these amounts, after the mandatory review 
provided in this Act, in order to meet present market demands; 
 
c. Collateral shall not be required from borrowers; 


 
d. Loan proceeds shall be exclusively used for capital; 
 
e. The period for repayment shall be mutually agreed upon by the borrower and the 
lender; Provided, that such repayment period shall be at least three (3) months 
for a first time borrower; at least six (6) months for a second time borrower; and 
at least one (1) year for those borrowing for a third time or oftener; 
 
f. Delivery of the program shall be through partner lenders which are cooperatives 
and/or associations that are registered with the Cooperative Development 
Authority (CDA), or the Securities and Exchange Commission (SEC), and the 
DTI. In the absence of such participating partner lenders in the area, government 
institutions, centers or facilities, now existing or may be created by law, which are 
dedicated to the promotion of inclusive growth and anti-poverty objectives, are 
mandated to implement the program; 
 
g. The lenders shall have a collection mechanism, whereby payments are made on 
a weekly or monthly basis. It shall be the duty of the lender to collect the loan 
principal, together with the interest, from the borrower; 
 
h. Government lenders shall not profit from the microfinance program. Neither shall 
they be entitled to interest proceeds, the amounts of which shall be devoted to a 
fund for the development of MSMEs. Participating partner lenders shall be 
entitled to a reasonable amount of the proceeds of the interest collected by them, 
as may be determined in rules and regulations promulgated in implementation of 
this Act;  
 
i. 
Priority shall be given to MSMEs falling under the priority business areas of their 
respective regions and to MSMEs with innovative businesses; and 
 
j. 
There shall be a mandatory review of the loan program every three (3) years in 
order to ensure that the loan program meets the present market demands. 
 
In the pursuit of inclusive growth and poverty alleviation, pertinent rules and 
regulations promulgated in the implementation of this Act shall provide for the details, 
conditionalities, and other schemes in the operationalization of the program, such as, but not 
limited to, penalty rates upon default and the dispensation of the proceeds from the loan 
program.   
 
Section 5. Eligibility for Loan Program. To qualify for the loan program under this 
Act, the borrower must be: 
a. At least eighteen (18) years of age; 
b. A member in good standing of the duly-registered cooperative or association, or a 
resident of the local government unit (LGU), from which he/she intends to avail of 
the loan; 
c. Willing to state under oath the facts establishing the foregoing;  
d. Comprehensive feasibility study of the business proposal; and 
e. Has attended a DTI-accredited livelihood seminar, as evidenced by a certificate 
of participation, and possesses credit-worthiness, as likewise proven by a 
certificate issued by the DTI for that purpose. 
 
Section 6. Registration of Cooperatives and Associations. The DTI shall keep a 
registry of all participating cooperatives and associations for monitoring and record keeping 
purposes. Cooperatives and associations which are eligible to participate in Programs 
provided for in this Act must register to be included in the database. 


Section 7. Local Government Unit Participation. Any law, executive order, 
department order, ordinance and the like, to the contrary notwithstanding, local government 
units, through the local sanggunian, as defined in the 1991 Local Government Code, are 
hereby authorized to provide a loan program in cooperation with the cooperatives/ 
associations, non-governmental organizations, and peoples’ organizations that are lending 
assistance to MSMEs within their jurisdiction. 
Provided, that in cities or municipalities where there are no such cooperatives/ 
associations, the local government unit shall, within one year from the effectivity of this Act, 
require the municipal/city social welfare and development office or the local trade and 
industry office or livelihood development office in the city or municipal government 
concerned, to develop and implement a loan program consistent with the provisions of this 
Act, under the supervision of the DTI. 
Provided, further, that each participating LGU must prepare a comprehensive 
feasibility study for the development of a loan program. Each LGU must fund, from its 
internal revenue allotment, at least Five Million Pesos (P5,000,000), where possible and 
practicable, or Thirty Percent (30%) of the total funding cost related to small business 
improvement, agricultural improvement, institutional advancement and consumer protection, 
whichever is higher. Likewise, for this purpose, the LGU shall maintain a separate and 
dedicated office which shall be responsible for the over-all implementation of the program in 
the locality. 
 
Section 8. Matching Fund. Participating cooperatives or associations, and LGUs 
with loan programs are hereby authorized to accept donations from the private sector in 
order to augment the available funds for the loan program. 
In order to promote private sector participation in promoting inclusive growth and 
government poverty alleviation efforts, donations for purposes of this Act from the private 
sector to an LGU shall be matched with a corresponding amount by the recipient LGU; 
Provided that, donations of more than Five Million Pesos (P5,000,000) shall be matched by 
the national government for the LGU. In any case, should the LGU concerned be financially 
incapable of matching a donation, the national government shall augment the internal 
revenue allotment of such LGU for this purpose.  
 
Section 9. Incentives for Private Support. Any person or corporate entity may 
donate funds, equipment, materials or services for the improvement of the PTK Five-Star 
and/or PTK loan program. Such donations shall be done through a memorandum of 
agreement between the cooperative or association, LGU, and the donor. The agreement 
shall expressly state the value of the donated funds, materials, or services.  
All income, legacies, gifts, and donations for the benefit of the program shall be 
exempt from the payment of all forms of taxes, fees, assessments, and other charges of the 
government, its branches, and subdivisions. Subject to the issuance of the appropriate 
revenue regulations by the Bureau of Internal Revenue, the value of the donation shall also 
be deductible as an expense in the determination of the taxable income of any donor. 
 
Section 10. Funding. The total amount of One Hundred Twenty Five Billion Pesos 
(P125,000,000,000) for the next five years upon implementation of this Act or Twenty Five 
Billion Pesos (P25,000,000,000) per year for the next five years upon implementation of this 
Act, shall be appropriated for the initial implementation of the PTK Five-Star Program and 
the PTK Loan Program. Said amount shall at all times be divided equitably among each 
administrative region of the country. Thereafter, such sums as may be necessary shall be 
included in the General Appropriations Act..  
In addition, the amount of Five Hundred Million Pesos (P500,000,000) is hereby 
appropriated as a Special Development Fund to generally support the initial implementation 
of this Act. 
The funds shall be held in trust by the DTI in collaboration with the Development 
Bank of the Philippines (DBP), Land Bank of the Philippines (LBP) and other government 


financial institutions. The DTI may likewise allocate a portion of the funds to the People’s 
Development Trust Fund (PDTF) under Republic Act No. 8425, provided that the funds to be 
allocated to the PDTF shall be used solely for microfinance-related organizing activities. 
 
Section. 11. Primary Implementing Government Agency. The DTI shall be the 
lead agency, which shall ensure the implementation of this Act.  
 
Section 12. Role of Government Financial Institutions. All government financial 
institutions (GFIs) shall set aside funding for microfinance operations to complement the 
purposes of this Act. Participating government financial institutions shall include the DBP, 
LBP, and other GFIs. 
 
Section 13. PTK Task Force. There shall be a PTK Task Force in charge of 
coordinating with banks and financial institutions on their existing programs on 
microfinancing. This shall be consolidated and submitted to DTI to be taken into 
consideration for the PTK Loan Program. 
 
Section 14. Reports. The DTI Secretary shall submit to the President of the 
Philippines, the President of the Senate and the Speaker of the House of Representatives, 
an annual accomplishment report on projects covered in this Act, detailing the amount of 
appropriations released by end of the calendar year, the extent of the work accomplished, 
further work to be done, and any recommendations for additional appropriations or charges 
thereof.  
 
Section 15. Full Financial Disclosure, Accountability and Transparency. The 
DTI, as lead agency of the program, and the LGU concerned shall quarterly publish, print, 
and disseminate at no cost to the public and in an accessible form, in conjunction with 
Republic Act No. 9485, otherwise known as the “Anti-Red Tape Act of 2007”, and through 
their websites, timely, true, accurate, and updated key information relating to the program. 
Likewise, they shall endeavor to translate key information and present them in popular form 
and means. 
 
Section 16. Implementing Rules and Regulations. The DTI, in consultation with 
relevant government agencies, shall prepare such rules and regulations for the proper and 
effective implementation of this Act, within sixty (60) days from the date of publication.  The 
DTI shall publish such rules and regulations once a week for two (2) consecutive weeks in 
two newspapers of general circulation. 
 
Section 17. Separability Clause. If any provision of this Act is declared 
unconstitutional, the same shall not affect the validity and effectivity of the other provisions 
hereof. 
 
Section 18. Repealing Clause. All laws, decrees, orders, issuances or portion 
thereof, which are inconsistent with the provisions of this Act are hereby repealed or 
modified accordingly. 
 
Section 19. Effectivity – This Act shall take effect fifteen (15) days after its 
publication in two (2) newspapers of general circulation. 
 
 
 
Approved,