Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _40 80

Introduced by Representative Alfredo D, Vargas III

EXPLANATORY NOTE

Section 14 Article XII of the Philippine Constitution explicitly provides that sustained
development of a reservoir of Filipino entrepreneurs and managers shall be promoted by the
State.

‘The Philippines is an entrepreneurial country. Slowly, entrepreneurship is becoming
the backbone of the country's economy. Small and medium-sized enterprises (SMEs) comprise
around ninety nine (99) percent of the establishments in the country and provide 66 percent
of total employment in the private sector. However, a number of problems continue to hold
back Filipino entrepreneurs and SMEs from realizing their full potential, Among these
challenges are lack of adequate knowledge on business techniques and financial management,
high cost of doing business, lack of access to finance and market information, and lov
productivity and competitiveness due to lack of innovative capacity,

This Dill seeks to empower the micro, small and medium enterprises (MSMESs) through
the establishment of a “Negosyo Center” in each province, city and municipality in the country.
The Negosyo Center shall serve as a hub for MSME registration and development. The
functions of Negosyo Centers include, but not limited to, the promotion of ease of doing
business and access to services for MSMEs, supplying finance and market information, linking
MSMEs to support networks and market opportunities, and facilitating financial assistance for
MSMEs.

This measure is an initiative of social entrepreneur, Senator Paolo Benigno “Bam”
Aquino.

By empowering our SMEs, we pave the way for the creation of jobs, reduction of
Poverty, and promotion of inclusive growth. Thus, the speedy passage of this bill is earnestly

sought.
AJAREDI aa

; Department of Trade and Industry, na, Micro, Small, Medium Enterprise Development Plan 2011-2016 Available
from: hitp:/dti,gov.ph/uploads/Downloadablel ED%20Plan%202011-2016(Final).pdf, [24 February 2014]
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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

4080

HOUSE BILL NO.

Introduced by Representative Alfredo D. Vargas III

AN ACT
PROMOTING THE REDUCTION OF POVERTY THROUGH THE DEVELOPMENT OF MICRO,
SMALL AND MEDIUM ENTERPRISES

Be it enacted by the Senate and the House of Representatives in Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the “Go Negosyo Act of 2014.”

SECTION 2. Declaration of Policy. - \t is hereby declared the policy of the State to foster
national development, promote inclusive growth, and reduce poverty by encouraging the
establishment of micro, small and medium enterprises (MSMEs) that facilitate local job
creation and production in the country. MSMEs increase income for poor households and
build both business equity and personal assets over a period of time. To this end, the State
shall develop plans and initiate means to case the constraints on the establishment of MSMEs
in order to rationalize the existing bureaucratic regulations, providing greater incentives and
benefits to MSMEs, and strengthening the Micro, Small and Medium Enterprise Development
(MSMED) Council.

SECTION 3. Establishment of Negosyo Centers. - There shall be established under the
supervision of the Micro, Small and Medium Enterprises Development (MSMED) Council a
“Negosyo Center” in all provinces, cities and municipalities. The MSMED Council shall
encourage public-private partnerships in the establishment and management of Negosyo
Centers.

In applicable areas, the existing Micro, Small and Medium Enterprise (MSME) Centers shall
continue to operate as Negosyo Centers subject to the provisions of this Act. The Negosyo
Centers shall be responsible for promoting case of doing business and facilitating access to
services for MSMEs within its jurisdiction. The MSMED Council, through the regional offices of
the Department of Trade and Industry (DTI) shall perform oversight functions and shalll assign
personnel to fulfill the functions of the Negosyo Centers.

SECTION 4. Functions of Negosyo Centers, - Negosyo Centers shall have the following
functions:

(a) Promote ease of doing business and access to services for MSMEs within its
jurisdiction;


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(b) Coordinate and facilitate processes of government related to the set-up and
management of MSMEs;

(c) Accept and act on all registration applications of MSMEs;

(d) Coordinate with the respective local government units and liaise with concerned
government agencies to process the duly accomplished forms submitted by the
MSMEs;

(e) Integrate a unified business processing system for MSMEs;

(f) Encourage government institutions that are related to the business application
Process to help promulgate information regarding the Negosyo Center;

(8) Supply information and services in training, financing and marketing;
(h) Support private sector activities relating to MSME development;

(i) Co-organize with the local chambers of. commerce and other business organizations
‘a mentoring program for prospective and current entrepreneurs and investors;

G) Build local support networks and establish market linkages for MSME development;

(9 Coordinate with schools and organizations on the development of a youth
entrepreneurship training program;

(D Facilitate access to grants and other forms of financial assistance, shared service
facilities and equipment, and other support for MSMEs;

(m) Ensure labor-management guidance, assistance and improvement of the
working conditions of MSMEs;

(n) Establish a databank which shall be a source of all information necessary for project
monitoring, research and policy studies and information discrimination campaigns;

(0) Map out all information and services essential to prospective entrepreneurs and
Prospective investors especially in key value chains and economic subsectors
within its jurisdiction;

(p) Establish a feedback mechanism among the MSMEs in the respective jurisdiction of
the Negosyo Centers; and

(q) Conduct other programs or projects for entrepreneurial development in the
country aligned with the MSME development plan.

SECTION 5, Registration. -

(a) Micro, Small and Medium Enterprises

1. A unified business registration form shall be created by the DTI and shall be
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made available in all Negosyo Centers. The unified business registration form
shall contain all necessary information for the business application process of
MSMEs. The DTI shall be responsible for regularly updating and maintaining the
unified business registration form.

2. MSMEs shall undertake the business application process with the Negosyo
Center of each city or municipality by submitting the necessary documentary
requirements, The Negosyo Center may deny the application of MSMEs that fail
to submit completed requirements or meet the necessary criteria under Section
5 of Republic Act No. 9178, otherwise known as the “Barangay Micro Business
Enterprise (BMBE) Act of 2002,’ and Section 4 of Republic Act No. 9501,
otherwise known as the “Magna Carta for Micro, Small and Medium
Enterprises.”

3. Should the Negosyo Center fail to process the application within fifteen (15)
days, the MSME shall be deemed registered for a period of one (1) year: In this
case, the Negosyo Center shall have the authority to revoke the registration
within a period of thirty (30) days upon determination that the MSME has not
met the necessary requirements and qualifications.

4, Thereafter, MSMEs shall renew its registration annually.

(b) Ease of Registration for Micro Enterprises - The Negosyo Center in the city or
municipal level shall have the sole power to issue the Certificate of Authority to
micro enterprises in accordance with Republic Act No, 9178. To defray the
administrative costs of registering and monitoring the micro enterprise, the
Negosyo Center may charge a fee of not more than Five Hundred Pesos (Php
500.00).

(c) Philippine Business Registry - The Philippine Business Registry (PBR) Kiosk shall
be housed under the Negosyo Center, if available, for use of MSMEs to expedite
registration with concerned licensing offices.

SECTION 6, Start-up Fund for MSMEs, ~ Aside from the existing benefits for MSMEs, the
MSMED Council, through DTI and the appropriate financing institutions, shall establish a
Start-up Fund for MSMEs to provide financing for the development and promotion of MSMEs
in priority sectors of the economy as specified in the MSMED Plan.

SECTION 7, Composition of the Micro, Small and Medium Enterprise Development
(MSMED) Council. - To ensure greater representation by the sectors involved, the members of
the Council shall be the following:

(a) Secretary of Trade and Industry as Chairman;

(b) Secretary of Agriculture;

(c) Secretary of Environment and Natural Resources;

(d) Secretary of the Interior and Local Government;

(e) Secretary of Science and Technology;
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(0 Secretary of Tourism;
(g) Director General of the National Economic Development Authority;
(h) Governor of the Bangko Sentral ng Pilipinas

(i) Chairman of Small Business Corporation

(j) Three (3) representatives from the MSME sector to represent Luzon, Visayas, and
Mindanao with at least one representative from the micro enterprise sector;

(i) One representative from the youth sector to focus on the promotion of youth
entrepreneurship;

() One representative from the labor sector, to be nominated by accredited labor
groups;

(m) One representative from the private banking sector: to serve alternately among
the Chamber of Thrift Banks; the Rural Banker's Association of the Philippines
(RBAP); and the Bankers’ Association of the Philippines (BA);

(n) A representative of Microfinance Non-Government Organizations (NGOs);

(0) Chairperson of the Senate Committee on Trade, Commerce and Entrepreneurship;
and

(p) Chairperson of the House Committee on Small Business and Entrepreneurship
Development.

The members may elect from among themselves a Vice-Chairman to preside over the Council
meetings in the absence of the Chairman.

SECTION 8. Functions of MSMED Council. - The MSMED Council shall have the following
additional functions:

(a) Coordinating and Oversight Body for the Negosyo Center - MSMED Council, through
the DTI, shall act as the coordinating and supervising body for all the agencies
involved in the establishment and operation of the Negosyo Centers.

(b) Provision of a Compliance Guide - For each rule or group of related rules issued by
any government agency for compliance guides entitled ‘Micro, Small and Medium.
Enterprises Compliance Guide’ The Council shall ensure that the compliance guide
shall be written in plain language or in the local dialect, if necessary.

The Council shall prepare separate compliance guides covering groups or classes of
similarly affected MSMEs and shall cooperate with industry associations to develop
and distribute such compliance guides. The publication of each compliance guide
shall include the posting of the guide in an easily identified location on the website
of the agency; and distribution of the guide to known industry contacts, such as
small entities, associations, or industry leaders affected by the rule. The issuing

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government agencies shall publish and disseminate the compliance rules within
ninety (90) days from the date of issuance.

SECTION 9. Information Dissemination. - The Philippine Information Agency, through the
Office of Public Information in each city or municipality, in coordination with DTI, Bangko
Sentral ng Pilipinas (BSP), Department of Labor and Employment (DOLE), and Department of
Interior and Local Government (DILG) shall ensure the proper and adequate information
dissemination of the contents and benefits of this Act to the general public especially to its
intended beneficiaries specifically in the barangay level.

SECTION 10. Appropriations. - The amount necessary to carry out the initial implementation
of this Act shall be charged to the DTI. Thereafter, such sums as may be necessary for the
continued implementation of this Act shall be included in the succeeding General
Appropriations Act.

SECTION 11. Implementing Rules and Regulations. - The Secretary of the DTI, in
consultation with the appropriate agencies as may be deemed necessary, shall formulate the
necessary rules and regulations to implement the provisions of this Act within ninety (90)
days after its approval. The rules and regulations issued pursuant to this Act shall take effect
fifteen (15) days after its publication in a newspaper of general circulation.

SECTION 12. Separability Clause. - If any section or provision of this Act shall be held
unconstitutional, the remainder of the Act not otherwise affected shall remain in full force and
effect.

SECTION 13. Repealing Clause. - Section 4 of Republic Act No. 9178 is hereby repealed,
Sections 7-A and 7-B of Republic Act No. 6977, as amended by Republic Act No. 8289 and
Republic Act No. 9501, are hereby amended. Section 12 of Republic Act No. 9178 is hereby
amended. All other existing laws, presidential decrees, executive orders, proclamations or
administrative regulations that are inconsistent with the provisions of this Act are hereby
amended, modified or repealed accordingly.

SECTION 14. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,