Republic of the Philippines
House of Representatives
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House sittno. 1331

Introduced by Honorable Cresente C. Paez, Honorable
Anthony M. Bravo and Honorable Teddy Brawner Baguilat

EXPLANATORY NOTE

It is enshrined in our Constitution 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. This proposed bill is crafted to respond to the clamor of the
poor. Social enterprise with the Poor as Primary Stakeholders (SEPPS) as defined in this bill is a
social enterprise that explicitly declares and pursues poverty reduction/alleviation or improving the
quality of life of specific segments of the poor as principal objective. It engages and invests in the
poor to become effective workers, suppliers, clients and/or owners, and/or ensure that a substantive
part of the wealth created by the enterprise is distributed to, or benefits them.

‘The Social Enterprise (SE) Bill seeks to provide a nurturing environment for the
development and growth of strong, pro-active and innovative social enterprises as major vehicles
for poverty reduction. It enacts a planning and implementation of a National Poverty Reduction
Through Social Entreprenuership (PRESENT) Program led by a Council on Social Enterprises
headed by the Department of Trade and Industry (DTI). For social enterprises to become a poverty
reduction tool, it is imperative that government play a developmental role to ensure that the
appropriate systems, structures and resources needed to support and mainstream social enterprises
are put in place.

‘The National PRESENT Program delves with the development of strategic economic
subsectors with potentiais for growth and where the poor are concentrated or could be major
players. It aims to benefit the poor through increased incomes and capability to improve their
means of living as workers, suppliers, clients and/or owners of Ses in strategie exono—i> ow
and as partners in economic and social development.

‘The SE hill endeavored to provide for le nen-callateratized loans thn special credit
windows with a Guarantee Fund Pool; comprehensive insurance system to reduce vulnerability to
climate change/calamities; resources for comprehensive capacity development for Ses and poor as.
partners (transactional and trasformational services); proactive SE market development progic=
promoting principles of frir trade; research and development on strategic ecnnamic subeoetn

di



Sowmraauaone

1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

appropriate technologies and innovations to democratize access to poor to quality basic social
services; recognition and support for LGUs in developing social enterprises; preferential treatment
in government procurement including coverage of performance bonds; tax exemptions and tax
breaks for SE-PPS and social investors; and cash incentives among others.

More than 30,000 SE sectors all over the country which are either cooperatives,
corporations, single proprietorships and NGO-assisted enterprises are affected and is currently
experiencing disincentives as a result of unfavorable environmental policy. ‘They are treated as
regular businesses by government without recognition of their social value created. It is for this
reason that the approval of this bill is earnestly sought.

HON. ANTHONY M. BRAVO



14
15
16
17
18
19
20
21

22
23
24
25
26
27
28
29,
30
31
32
33
34
35
36
37
38
39
40
41
42
43

Republic of the Philippines
House of Representatives
Quezon City

House Bu.No._1881

Introduced by Honorable Cresente C. Paez, Honorable Anthony M, Bravo and Honorable
Teddy Brawner Baguilat

AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE,
POVERTY, ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION
THROUGH SOCIAL _ ENTREP! ‘URSHIP (PRESENT) PROGRAM AND
PROVIDING INCENTIVES AND FITS THEREFOR

CHAPTERI

GENERAL PROVISIONS

SECTION 1, Short Title, — This Act shall be known as the “Poverty Reduction Through Social
Entrepreneurship Ac.”

SECTION 2. Statement of Poli. — As provided in the Constitution of the Republic of the
Philippines, it is the declared policy of the State 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 lite for all. In Article II, Sections 10 and 11, itis further declared that the State
shall provide so phases of national development and that the State values the dignity of
every human person and guarantees full respect for human rights.

I justice in

In Article XI, Section 1, itis further stated that the goals of the national economy are 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.

The State shall promote industrialization and full employment based on sound agricultural
«d agrarian reform, through industries that make full and efficient use of humai and
\d which are competitive in both domestic and foreign markets, However, the State
ipino enterprises ir foreign competition and trade practices.

development a
natural resour
shall protect F

The State also recognizes 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 the livelihood of the people.

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, economic and social development. It shall empower the poor 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 shall

1



26

30
31
32
33
34
35
36
37
38
39
40
41
42
4B
44
45
46
47
48
49
50
51
52

likewise ensure that the provision for technical and financial assistance, incentives and other services
ate free from any condition that might infringe upon the autonomy or organizational integrity of the
social enterprises to 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.

SECTION

3. Definition of Terms. — As used in this Act:

a) Social Enterprive or SE cefers to a wealth-creating organization, however organized, whether an
association, single proprietorship, partnership, corporation, or a cooperative or any other legal form
, whose primary stakeholders are marginalized sectors of society, engaged in providing goods and
services that are directly related to its mission of improving societal well-being, It is established to
achieve triple bottom lines such as fi , social and ecological. Ir generates profit or surplus with
due regard to soctal and environmental costs, and makes a pro-active contribution to resolving social
and environmental problems

A social enterprise for purposes of this act shall mean a Social Enterprise with the Poot as Primary
Stakeholders (SEPPS). A SEPPS is a social enterprise that explicitly declares and pursues! poverty
tion/alleviation or improving the quality of life of specific segments of the poor as principal
A SEPPS engages and invests in the poor to become effective workers, suppliers, clients
.d/or owners, and/or ensures that a substantive part of the wealth created by the enterprise is
distributed to, or benefits them. In addition to reinvesting its surplus or profits back to the
enterprise to sustain the fulfilment of its social mission, a SEPPS also uses its surplus or profits and
mobilizes other resources to assist the poor to become pariners in SE. or value chain
management/governance and to become partners in community, sectoral and societal
transformation.

b) Absolute poverty refers to the condition of the houschold below the food threshold level;

©) Avsets refer to all kinds of properties, real or personal, owned by the social enterprise (SI
ed in paragraph (dd) of this Section and used for the conduct of its business: Protided, That for
the purpose of exemption from taxes and to benefit from other incentives under this Act, this term
shall mean all kinds of properti or personal, owned and/or used by the SE for the condu
of its business;

d) Basie secory shall refer to the disadvantaged sectors of Philippine society, namely: farmer-
peasant, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in the
informal sector, indigenous peoples and cultural communities, women, persons with disability,
senior citizens, victims of calamities and disasters, youth and students, children, and urban poor as
defined under Republic Act (R.A) No. 8425, othenwise known as the “Social Reform and Poverty
Alleviation Act”;

€) Botton» line shall refer to the objectives or purposes for which a SE is established. Triple bottom
Ene shall refer to social, ecological and financial objectives;

£) Capability building refers to the process of enhancing the viability and sustainability of SEs and
pertain to education, training, coaching and other learning events like study tours; technical,
consultancy and advisory services; assistance in organizational systems development; technology
incubation, development and dissemination; value chain and subsector development; conduct of SE.
trade fairs and missions; 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



33
34
35
36
37
38
39
40
4l
42
43
44
45
46
47
48
49
50
3

any such activity that connotes the infusion of capital or funds from the government or from the SE.
Development Fund created under Section 16 of this Act;

@) Ciril society organizations cefer to private voluntary 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;

1h) Council shall refer to the SE Councils
i) Cooperative shall refer 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 R.A. 6938,
s amended by R.A. 9520, otherwise known as the “Philippine Cooperative Code of 2008”;

i) Conporate Social Responsibility or CSR shall refer to the commitment of a private enterprise or
business to contribute on a voluntary basis to a sustainable social and economic development by
working with relevant stakeholders to improve their lives in ways that are pod for business, the
social reform agenda, the sustainable development agenda, and society at large, CSR-related
activities shall include; but not be limited to, the following: 1) Charitable programs and
projects; 2) Scienufic research; 3) Youth and sports development; 4) Cultural or educational
promotion; 5) Services to veterans and senior citizens; 6) Social welfare; 7) Environmental
sustainability; 8) Health development; 9) Disaster relief and assistance; and Employee and iyorker
welfare related CSR activites i

k) Economic subsectors are networks of related actors and enterprises performing various functions in
value chains, ‘These actors and enterprises transform raw materials into finished products, or
develop services, and distribute or provide them through market channels to final consumerg; 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 etfectively reach and
benefit a greater number of poor in poverty reduction programs;

1) Empowerment strategy shall mean a development stratepy that enables the marginalized sectors to
‘own, manage, and control SEs in order for them to reap maximum benefits from it and which acts
asa channel for directly distributing income;

m) Fair trade shall refer to a trading partnership based on dialogue, transparency and respect and
which secks 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;

n) Fair trade organizations shall mean enterprises certified by internationally and nationally
recognized Fair Trade networks;

0) Fair ade principles refer to the values adopted by fair trade organizations in their day-to-day
operation. ‘hese include creating opportunities for economically- disadvantaged producers;
transparency and accountability; payment of a fair price; ensuring no child labor and forced labor;


23

35

38
39
40
4
42
43
44
45
46
47
48
49
50
51
52

commitment to non-discrimination, gender equity and freedom of association; ensuring good
working conditions; providing capacity building: and, respect for the environment; ‘

Pp) Fowadation shall mean the categorization of a non-profit organization 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 our 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;

q) GPPB refers to the Government Procurement Policy Board established in accordance with
Article X of R.A.No.9184, otherwise known as the “Government Procurement Reform Act;

1) Intermediation strategy shall refer 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 as well product development and marketing support using the
principles of fair trade to marginalized producers. A SE engaged in intermediation strategy need not
be owned by the marginalized stakeholders but provide immediate access to services among a
critical ma ese marginalized stakehold

8) Mayginalized Sectors shall refer to groups of people who are stigma
of their physical, psychdlogical, economic, social or cultural circumstan

wed or marginal

zed by virtue

1) Mio-enterprise as defined in R.A. No. 697, as amended by R.A. No. 9501, otherwise known as
the “Magna Carta for Small Enterprises,” shall refer to any business activity or enterprise engaged in
industry, agnbusiness and/or services, whether single proprietorship, cooperative, partnership or
corporation whose total assets, inclusive of those arising from loans but exclusive of the land on
which the particular business entity's office, plant and equipment are situated, must have a value of
hot more than Three Million Pesos (23,000,000.00). ‘This amount is subject to review and
adjustments by the Micro, Small and Medium Enterprises Development (MSMED) Council, taking
into account inflation and other economic indicators and may use other variables such as number of
employees, equity capital and assets siz

u) Microfinance shall refer to the provision of a broad range of f s 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;

¥) Minimum basic needs shall refer 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 corhmunity
development, family and psycho-social care)

w) Non-Govemment 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 Republic Act No. 8424, as amended,
otherwise known as the National Internal Revenue Code of 1997, 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;



13
14
Is
16
7
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

x) People's Organization or PO refers to a self-help group belonging to the basi¢ sectors and/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:

Y) Persons with Disability shall refer to individuals with restriction or different abilities, as a result of
a mental, physical or sensory impairment, to perform an activity in the manner or within the range
considered normal fo# a human being

2) Poorshall refer to individuals and families whose income fall below the poverty threshold as
defined by the National Economic and Development Authority and/or are deprived of the means
to provide in a sustained manner theit minimum basic needs of food, health, education, housing and
other essential amenities of life, as defined under R.A. 8425

an) Poverty reduction/allecation shall mean overcoming the income, resource, and capability
deprivation among the poor as defined in the preceding paragraph and the marginalized sectors
as defined in paragraph (q) hereof;

bb) Priute Emerprise shall refer to an organization engaged in a business activity organized
for the purpose of accumulating profit and whose primary stakeholders and beneficiaries are its

owner

6c) Procuring Entity refers to any branch, department, office, agency, or instrumentality of
the goverment, including state universities and colleges, government-owned and/or -
controlled corporations, government financial institutions, and local government units
procuring Goods, Consulting Services and Infrastructure Projects

dd) Resource mobilization strategy shall refer to a development strategy intended to generate
income from the sale of products and serv 4 in order to finance or subsidize the
‘operations of its core development program or development interventions among. the
marginalized sectors;

ee) — SEGEP refers to the SE Guarantee Fund Pool created under this Act;

ig process of addressing the needs of society,
needs, through a systematic implementation of

11) Social development refers to the contin
beginning with the people’s minimum ba
socioeconomic programs or packages;

88) Social Enterprise Serice Institution refers to an organization that provides assistance to SE:
for them to become viable and sustainable and which assistance pertains to supplying needs
such as trainings, education and other capacity-building measures, research and development,
and other similar activities;

hh) Sovial Enterprise Advocacy Group refers to an organization whose primary purpose is
supporting the cause of SEs especially with regard to public policy and articulating issues or
causes related to social entrepreneurship;

ii) Sacal 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:


Gi!

Cada

ul
12
B
14
15
16
7
18
19
20
21
22
23
24
25
26
veh
28
29
30
31
32
33
34
35
36
37
38
39
40
4l
42
43
44
45
46
47
48
49
50
51
52

ji) Social entrepreneurship entails innovations designed to explicitly improve societal well-
being, housed within entrepreneurial organizations, which initiate, guide or contribute to
change in society

Kk) Social Inclusion strategy refers to the development strategy that assists groups of people
who are stigmatized or marginalized by virmue of their physical, psychological, economic, social
or cultural circumstance 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;

Ml) Social Investors are 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
nd a desire for a more economically just world

mm) Social reform reters to the continuing process of addressing the b:
through

inequities in sociery
c, unified and coordinated delivery of socioeconomic programs or package

sstemati

nn) — Transactional roles refer to enterprise-related functions
involve an exchange of goods or services for money including being workers, supplie
or owners

performed by the poor that
clients

00) Transformational roles are Functions performed by the poor as conscious agents of change
to lift their own selves fom poverty and to participate in group efforts to improve the quality
of life of their community, sector of society as a whole;

driven activities, such as providing
loans, demonstrating new technologies or conducting trunings that are necessary for the poor
in the SE system to effectively and efficiently perform their roles as workers, suppliers, clients
and owners. Transactional services may be fee-based, such as the granting of loans, or non-fee
based, such as the extension of production-related trainings;

pp) Transactional servives pert

n to enterprise or marke

qq) Transformational services pertain to activities that empower the poor, such as leadership
formation and organizational development, asset build-up and providing education and
experiential learning opportunities, to become conscious change agents for themselves, for their
‘communities, sectors and society as a whol

1) Underemployment shall mean an economic position where an employed person's desire to
have additional hours of work in his/her present job or to have an additional job, or to have a
new job with longer working hours is not met;

88) Unemployment shall mean an economic situation where persons who are 15 years old and
over as of their last birthday and are 1) without work or have no job or business, 2) available
for work and willing to take up work in paid employment or self-employment, 3) seeking work
and had taken specific steps to look for a job or establish a business but failed to; and

tt) [alte chain refers to value-adding economic activities that an enterprise is interlinked
with in the process of producing goods and/or services to serve its chosen market. A value
chain typically consists of: 1) 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)

6


eIsHeo wR

9
10
i
12
13
14
15
16
7
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

human resource development, and 9) organizational development. A SE that understands and
manages its value chain improves its capability to create economic, environmental and social
values towards improving the position and benelits of the poor in the value chain and towards
ensuring the viability and sustainability of the enterprise.

CHAPTER II
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES

SECTION 4, Social Enterprise (SE); General Concept and Coverage — \ SE, for purposes of 1
refers to a Social Enterprise with the Poor as Primary Stakeholder as the term is defined in Sec. 3a of this
Tr may be collectively owned by the poor in the form of cooperatives or associations where the poor
are the exclusive owners or comprise a majority of the members. SEPPS may also include NGOs or
other organizations that engage in wealth-creating activities, the proceeds of which are used exclusively
to finance the fulfilment of their social mission,

TION 5. Bligibility for Bengfts and Incentives, — Vo \xe recognized and 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 and/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 organization

) invest a substantive part of its surplus, profits or mobilize other resources to assist the poor
to become partners in SE. or value chain management/governance and/or to become
partners in community, sectoral and societal transformation;

©) make a pro-active contribution to resolving social and environmental problems and generate
profit or surplus with duc regard to social and environmental costs;

d) employ any of the following development strategies in the pursuit of its social mission: 1)
‘empowerment strategy; 2) social inclusion strategy; 3) intermediation strategy; and, resource
mobilization strategy;

) 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;

f) ensure that a substantive part of che wealth created by the enterprise is distributed 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;

2) be duly registered with the appropriate agencies as provided under the Corporation Code or
the Cooperative Code of the Philippines, Magna Carta for Micro, Small and Medium
Enterprises, Barangay Micro Business Enterprises Act and other laws.

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

7


31

34
35
36
37
38
39
40
4
42
43
44
45
46
47
48
49
50
51
52

achieve financial sustainability over a reasonable period of time.

SECTION 6. Osber Eligibility Provisions. In the case of social enterprises organized as stock
corporations, partnerships or sole proprietorships, the following additional requirements shall apply:

a. A social enterprise, if organized as a sole proprietorship or partnership must be one
hundred percent (100%) owned and capitalized by Filipino citizens. Tf the enterprises a stock
corporation, at least sixty percent (60%) of its outstanding capital stocks must be owned by
Filipino citizens;

b. A social enterprise must not be organized a branch, subsidiary or division of a private
business enterprise, regardless of the size of such private business enterprise, nor may its
policies be determined by a private business enterprise. Provided, that this shall not preclude a
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 practicing CSR.

cA social enterprise organized as stock corporations, partnerships or sole
proprictorships, must invest at least 60% of its gross revenues to sustain the fultilment of its
social mission or to provide transformational services for the poor.

{CTION 7. Quafeations. — Within ninety (90) days from the effectivity of this Act, the
Social Enterprise Development Council shall formulate the implementing rules and regulations for the
application and accreditation of enterprises t SE under this Act, following the principles of
self-regulation, transparency and responsibili

— To promote the development of a SE. sector with the poor a
comprehensive and fully-integrated Poverty Reduction Through Social I
Program, shall be formulated, guided by the following principles:

primary. stakeholders, a
trepreneurship (PRE:

a) Incorporation of the PRESENT Program in the government's poverty reduction drive

4s a major sustainable and comprehensive strategy

b) Rational

various

ation of poverty reduction programs by streamlining and coordinating the
anti-poverty programs of the government to reduce inefficiency and duplication
and to improve the effectiveness of each program;

©) People’s participation and empowerment by mobilizing civil society organizations and
social movement groups working with the poor;

d) Promoting sustai
sectors

ble programs that reduce inequality in incomes actoss economic
nce among the poor;

©) Enabling SF's to overcome constraints and to take advantage of opportunities for
enhancing the position and benefits of the poor in economic subsectors and_ value
chains;

1) Gender-sensiivity by ensuring women's equal rights and access to SE’s resources;.and,

8) Development of sustainable mechanisms for the provision of quality and’ accessible
social services to the poor.


&

34
35
36
37
38
39
40
Al
42
43
44
4s
46
47
48
49
50
51
$2

‘The planning framework of the PRESENT Program and its planning process shall ensure that
the poor are engaged as primary stakeholders. It shall add value and complement ecosystem-based,
area-based, community-based and other tools and processes in local economic development by
promoting and utilizing the economic subsector as a strategic unit of analysis and planning SE,
development interventions.

The PRESENT Program shall identify and develop key SEs and resource institutions as
partners in strategic economic subsectors that have the potential for growth and where large numbers
Of the poor are concentrated. SKs shall be developed as vehicles to ensure that the poor benefit the
most from sustainable subsector development.

PRESENT medium-term
the medium-term development phin of the national governms

d annual development plans shall be formulated in synchrony with
t.

SCTION 9. Social Enterprise Development Council. — Vo carry out the policy declared undee this
Act, a Social Enterprise Development Council (SEDO), hereinaticr referred to as the Council, is hereby
ed as an agency attached to the Department of Trade and Industry (DTI). It shall be the primary
agency tasked t0 carry our the promotion, growth and development of social enterprises in the country.

‘The Council shall be composed of the following:

a) Secretary of Trade and Industry, as chairpers

b) Secretary of Agriculture, o-vice chairperson, ;
¢) Lead Convenor of the National Anti-Poverty Council (NAPO), as co-vice chairperson;
4d) SE chaitpe ;
e) Secretary of Social Welfare and Development;

f) Director-General of the National Economic Development Authority (NEDA);
2) ecretary of Finance;

h) Secretary of the Interior and Local Government;

i) Sceretary of Labor and Employment,

j) 5

k) Secretary of Education;

1) Secretary of Agrarian Reform;

m) Secretary of Health;

n) Secretary of Environment and Natural Resources;

©) Chairperson of the Cooperative Development Authority (CDA);
P) Nine (9) representatives from SPs, three (3) representatives each from the main iskand
groupings of Luzon, Visayas, and Mindanao;
gq) ‘Three (3) representatives trom

1) Three (3) representatives from SE advocacy groups, as memb:

‘ervice institutions; and

Cabinet-ranked ex officio members of the Council shall designate a permanent representative in
case they fail to attend its meetings. ‘The designated permanent representative of any of the Cabinet-
ranked members of the Council must hold a position not lower than a bureau director.

‘The SE sector head, the representatives of the SEs from the main island groupings of Luzon,
Visayas, and Mindanao, the SE service institutions, and the SE advocacy groups shall be chosen by the
President from among the nominees submitted by their respective national organizations to serve in
the Council for a term of three (3) years. These representatives must be conversant in the theory and
practice of SE and committed to the policies and programs provided under this Act

The Chairperson and members of the Council shall be entitled to a reasonable per diem for each
meeting actually attended at such amount as may be fixed by the Council in accordance with e

9



38

rules and regulations.

“The Council shall, from time to time, call upon the participation of any goverament agency to
attend in its meetings to assist in clarifying issues and finding resolution to problems that concern their
respective offices with respect to the implementation of the PRESENT Program enunciated under this
‘Act or any development program for SEs.

“The Council may create an Executive Committee of seven (7) members elected by its members
from among themselves or their designated permanent representatives, with at least three 3) members
representing the SEs, and with the authority to act for the Council, and within the specific authority

granted by the Council

SECTION 10. Powers and Functions. — The Council shall have the following powers and
functior

a) Formulate policies, plans, programs and projects to develop and promote SEs as a tool

for poverty reduction consistent with national development objectiv

b) Oversee the successful implementation of the PRESENT Program and other SE
programs;

© Mentify and ac: ancing to expand the SE sector;

d) Monitor and evaluate the performance of programs and projects for appropriate
incentives;

9 I upon any government agency to carry out and implement programs and projects
‘identified by the Counell;

1) Gall upon people's organizations, non-government organizations, the academe anc
other sectors to provide advice on matters pertaining t0 SEs and conduct of wansactional and

transformational services to farmers, producers, workers, consumers and other stakeholders;

2) Submit annual and other periodic reports to the President and the Congress of the
Philippines through the Congressional Oversight Committee;

bh) Promu ch rules and regulations and
may be necessary to carry out the purposes of this Act; and

i) Pertorm such other functions as may be necessary for its effective operations and the
continued enhancement, growth and development of the SE sector. i

nd functions as:

cise such other powers a

TION. 11. Seentariat, — ‘There is hereby created a Secretariat headed by an E
Director to serve as the national technical and administrative secretariat of the Council with. the
¢ providing additional support staft when the need arises. The Secretariat shall pecform
the following functions:

3) Provide administrative support to the Council, with the assistance of the National
Economic and Development Authority secretariat in the formulation of the PRESENT development
programs and plan:

b) Assist the Council in the implementation of the PRESENT development program and
the annual and medium-term development plan;

©) Assist the Council in the accreditation of SEs;

@) Assist the Council in monitoring the PRESENT development programs and the
activities of the various conceed government agencies with respect to SEs;

©) Prepare, collate and integrate all necessary inputs ro the Council's yearly report on the

status of SEs in the country
f) Submit periodic reports to the Council on the progress and accomplishment of its work
programs; and
2) Perform other functions that may be assigned and authorized by the Council.

10


SECTION. 12. Offi. — The Council shall have its principal place of business in Metro Manila
and may establish such branches within the Philippines as may be deemed necessary by the President of
the Philippines to carry out the powers and functions of the Council

SECTION. 13. National Center for Social Enterprise Development. — There shall be estiblished a
National Center for Social Enterprise Development (NCSED) under the Council which shall perform
the following functions: i

3) Provide SEs with capability-taining and education through the Social Enterprise
Capability Building and Sustainability Program created under Section 16 of this Act;
b) Develop and enhance a research and development system which shall equip every SK

with innovative and sustainable approaches that ensures improvement in the access 10 basic social
services by the poor pursuant to Section 18 of this Act; and

©) Manage a Social Enterprise Marketing Assistance Program (SMAD) that will ensure the
generation of the highest possible income for the SEs pursuant to Section 19 of this Act.

‘The NCSED shall be headed by the Executive Director of the Council Secretariat. It shall
maintain a multi-sectoral, multi-disciplinary pool of experts including those from the academe,
practicing professionals, business and industry, youth, women and other concerned sectors, who shall
be screened according to the qualifications set by the Council.

The NCSED shall coordinate with the University of the Philippines Institute for Small Scale
Industries (UP ISSD, the Technical Education and Skills Development Authority (TESDA), the
‘Technology and Livelihood Resource Center (TLRO), the Department of ‘Transportation and
Communications (DOTO), civil society organizations and other relevant agencies, state universities and
colleges in implementing its programs.

SECTION. 14. Personnel. — Subject to the civil se anys, rules and regulations, the Council is
wthorized to select, appoint, employ and fix the compensation of the officers and employees of the
ICSED as shall be necessary to carry out its functions.

etariat and the )

SECTION. 15. Role of LGUs in SE. Development - Pursuant to the relevant provisions of R.A. No,
7160, otherwise known as the Local Government Code, the LGUs shall be primarily responsible for
the development of SEs aind the implementation and nt provisions of this
Act within their respective jurisdictions with the end in view of reducing poverty therein, ‘The LGUs
are hereby mandated to include in their respective local development plans certain policies and
programs geared toward the development of SEs in their jurisdictic
LGUs with viable SE development plan as incorporated in theit respective local
development plans are entitled to avail of the SE Development Fund created under the immediately
succeeding section for the purpose of initiating and facilitating the development and sustainability of
SEs in their own jurisdiction: Provided, That no LGU shall establish and operate its own SE.

wreement of the rel

CHAPTER Il
DEVELOPMENT OF SOCIAL ENTERPRISES

SECTION 16. SE Capability Building and Sustainability Program; Creation of SE Development Fund —
There is hereby established a SE Capability Building and Sustainability Program whose; primary
objective is to guarantee the viability and sustainability of SEs through activities that advance, in
general, both transformational services and transactional services. ‘This program shall include
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, and product
development competitiveness, business matching activities, trade fairs and missions, policy advocacy,
disaster-resiliency and other related activities.

i


Zapability 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.

For this purpose, there is hereby created and established a SE Development Fund (SED) in
the amount of Three Billion Pesos P3,000,000,000.00) to be administered by the Couneil with an
the Philippine Amusement and Gaming Corporation (PAGCOR), in

ons, grants, gifts from both local and
ability building projects approved by the

endowment from the carnings 0
addition to appropriations by Congress, voluntary cont
foreign sources as may be accepted by the Council.
Council shall be implemented by the NCSED.

Only the fruits of the SEDF shall be used for the purposes provided herein. Any undisbursed
fruits for the preceding year shall form part of the disbursable portion of the SEDK in the following.
year.

ION 17. Social Enterprise Research and Development System “The Council, in coordination with
the NEDA, DOST, and Dl, and other appropriate agencies and research institutions, shall develop
and enhance 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; i

b) equip SEs and support institutions with technologies that are appropriate for enhancing the
participation and benefits of the poor in various economic subsectors; and,

€) equip SEs and support instirutions with innovative and sustainable approaches to improve

of the poor to quality basie social servi

aces

SECTION 18. Social Enterprise Marketing Infrastructure Development - Vie Council shall promote the.
development and expansion of local and foreign markets for the products and services of SEs, guided
by the principles of fair trade. Consistent with this, the Council shall:

a). establish a SE Marketing -¢ 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;

b) develop, install and sustain a SE. market information system with the assistance of the
DTI and DOTC which shall be called the SE Marketing Information Network (SMIN).

‘The SMIN shall be set up from the level of the municipal and provineial LGUs, the regional and up
to the Council level within one (1) year from the approval of this Act, taking into account existing,
information networks such as the intemet 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 ar the local and regional levels

s the LGUs shall
to SEs ona

All government departments, agencies, bureaus, research institutions, as well
consolidate and continuously update all relevant information and data that would be of
periodic basis and make such data available in a dedicated website on the internet.

‘The SMIN shall provide information and marketing services related to products of SEs which
shall include the following:

1. Supply daras
af Demand data;

3. Price and Price trends;
4. Product standards:


Seowmaauvevn

ul
12
13
14
15
16
7
18
19
20

29)

49
50
51
52
33

5, Directory of, but not limited to SEs, traders, key market centers, processors and business
institutions both at the national and local levels;

6. Information and technology generated from research institution:
7. International, regional and local market forecasts; and
8 Resource accounting data.

CHAPTER IV
INCENTIVES AND BENEFITS.

SECTION 19. Special Gradit Windows. — In addition to the special credit windows provided for

the promotion of microfinance as provided under Section 16 of RA 8425, the Land Bank of the
Philippines, Development Bank of the Philippines, Philippine Postal Bank, and AL Amanah Bank, are
hereby mandated to set aside at least eight percent (8%) of their total loan portfolio based on their
balance sheet in the end of the preceding quarter, and open a special credit window for Sh:
‘or a period of ten (10) years from the date of the effectivity of this Act, all other lending
institutions as defined under the Central Bank Act or the General Banking Act, as amended, whether
public or private, shall likewise set aside at least eight percent (8%) of their total loan porttolio based on.
their balance sheet as of the end of the previous quarter and make the same available For SEs through a
special credit window. ‘The BSP, in consultation with the Council, shall formulate the rules for the
effective implementation of this provision: Prorzded, That the purchase of government notes, securities
and other negotiable instruments shall not be deemed compliance with the foregoing provision.

The BSP shall establish an incentive program to encourage lending to SEs beyond the
such as possible reduction in b: serve requirement:

The Council shall establish a system to monitor all loan applications of SE's in order to account
for the absorptive capacity of the SE sector. The BSP shall require lending. institutions covered by
this Act ro furnish the Council on a quarterly basis a regular report on their respective compliance with
the above provisions on the mandatory credit allocations for SEs and shall act immediately on the
Council's reports of non-compliance therewith.

The special credit window for SEs shall bear interest lower than the market rate and shall have
longer terms of payment and waiver of applicable fees.

mandatory ceedit alle

SECTION 20. Special Credit Window Purposes. ~The special credit window provided under
Section 19 of this Act shall be intended for the following purpos: 4

2) Organizational developmental loan or capacity-building loan for the conduct of social
preparation activities or the conduct of capability-building and training or professional development of
the boaed, management and staff of the SE. for social entrepreneurship, such as business planning, and
advisory services, technology intervention, incubation, market studies, and product development;

b) 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;

©) 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;
@)— Value chain fi
ing and marketing;
) 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 and conditions of the credit; and

f) Revolving Credit Line for relending to finance the livelihood project requirements of
end-borrowers. :

ain activities such as production,

ancing to cover any of the value cl
proce:

3


33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
SI
52
53

TTION 21. Eigibity for Agriculture and Fisheries Credit, ~ At least ten percent (10%4)'of the
funds created under Section 6 of RA 10000, otherwise known as "The Agn-Agra Reform Credit-Act of
2009," mandated to be set aside by all banking institutions, whether government or private, for
agriculture and fisheries credit, shall be made available for SEs engaged in agriculrure and fisheries
activities

SECTION 22. Soeial Enterprise Guarantes Fand Pool with Non-Callateral Loans. ~ here is hereby
created a Social Enterprise Guarantee Fund Pool (SEGFP) which shall be comprised of the five
percent (5%) of the preceding year budget surplus of the govemment-owned and controlled
corporations and government financial institutions including the PAGCOR, the Philippine Charity
Sweepstakes Office (PCSO), the Social Security System (SSS), the Government Service Insurance
System (GSIS), the National Power Corporation and the Philippine National Oil Company (PNO), as
contribution to the SGEP 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 SEGEP 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
trust with the Land Bank of the Philippines 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 Land Bank of the Philippines, shall draw up the
mechanies and administrative arrangements and issue the implementing guidelines for the fund pool

SECTION 23. Utiligation of People's Development Trust Fund.— ‘The camings of the Peopl

Development Trust Fund (PDTF) declared under Section 11 of RA 8425 may be utilized and ac
by the NSCED or accredited SE for the following purposes:

a) Consultancy and training serv %s and their beneficiaries on the establishment
of the necessary support services such as financial preparation, fund sourcing, operation of credit and
savings entities, monitoring and evaluation including training on marketing, financial, human resource
operational and strategic management;

ed

b) and selected beneficiaries;

to) Community org;

d) SE developme bility building programs, feasibility studies and researches;

° and other management support services for SEs such as registration or

accreditation, documentation, contract review and enforcement, audit and operational assessment;
f) _ Information dissemination of SE technology and management, and
2) Other activities to support SEs as approved by the designated agency administering the

PDTF.

SECTION 24. Taxe Exemptions. — An accredited SE shall have the following tax exemptions:

a) ‘The SE with a net income of not more than Fifteen million pesos (P15,000,000:00) shall
be exempt from all national, city, provincial, municipal or barangay taxes of whatever name and nature:
Protided, ‘That such net income shall be allocated for transformational services and other activities of the
Sli as provided under Section 5.g of this Act; '

b) Documentary stamp tax; P

©) Capital gain tax on sales or exchanges of real property classified as capital asbets or
shares of stock; and

4) For five (5) years after the effectivity of this Act, all SEs duly cettified by the Council,

in consultation with the Department of Finance (DOF) and the Board of Investment (BOD) of the
DTI, shall be exempted from the payment of tariff and duties for the importation of all types of
Product inputs, equipment, machinery, implements, and spare parts: Provided, That these inputs,
equipment, machinery, implements, and spare parts shall be for the exclusive use of the importing
and can be shown to be directly related to further improve the value chain operations of the SEs.

4



25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53

The Council shall, in consultation with the DOF and the BOI, within ninety (90) days from the
effectivity of this Act, formulate the implementing rules and regulations governing the importation of
the inputs, equipment, machinery, and implements for use by th

For income tax purposes, a reinvestment made by a SE for the expansion of its socioeconomic
projects within the area of its operation shall be tax deductible from the gross income.

SECTION 25. Prefrential Rights. — Social enterprises 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.

SE's shall be given priority and preference in the following procurement process:

a) Direct contracting as provided under Section 50 of RA 9184, otherwise known as the
“Government Procurement Reform Act.’ may be resorted to if the contracting party selling the goods and
services required by the procuring entity is a social enterprise as certified by the Council

b) Shopping as provided under Section 52, paragraph (a) of RA 9184 may be resorted to
when there is an untorest -ncy requiring immediate purchase: Provided, That the procurement
of the goods and services shall be first obtained from the social enterprise within the area of operation
of the procuri
required goods
pesos (P 100,000.00).

Shopping as provided in Section 52, paragraph (b) of RA 9184 may be resorted inthe
procurement of ordinary or regular office supplies and equipment not available in the Procurement
ding ‘Two hundred fifty thousand pesos (P250,000.00): Provided,

is,

Service involving an amount not

That the Procurement does not result in splitting of contracts: Provided, father; That a price quotations

shall be first obtained from a social enterprise as certified by the Council as having the capacity 10
furnish or provide the required office supplies and equipment. Only in the event of failure of
submission or absence of SE. price quotation that at least three (3) price quotations from other bona
fide suppliers shall be obtained.

©) Negotiated procurement as provided under
when the goods or services subject of the procurement may be obtained from a SI
operation of the procuring entity which is duly certified by the Council as having the capacity 10 s

Section 53 of RA 9184 may be allowed
within the area of
ipply

the required goods and servi

Only in the event that no procurement is perfected by way of direct contracting, shopping, or
hegotiated procurement due to the absence of SPs within the area of operation of the procuring entity
or the lick of interest or capacity to supply on the part of existing SEs, shall the procuring entity
through its bids and awards committee issue an invitation to bid.

\ procuring entity, when applicable, shall have at least one member representing Slis,

Registered small enterprises under RA 6977 that qualify as SE under this Act shall, consistent
with Section 4 of RA 9501, be entitled to a share of at least ten percent (10%) of total procurement
value of goods and secvices supplied to the government, its bureaus, offices and agencies annually.

The Council shall, in coordination with the Department of Budget and Management (DBM)
and the Department of the Interior and Local Government (DULG), issue the rules and regulations that
shall implement the preferential right accorded to SEs under this section including the limitations and
restrictions in its application.

SECTION 26. Incentives for Social Investors. — Social investors and other institutions that
contribute money or other forms of donation in the promotion and development of SEs shall be
entitled to the following tax incentives:

a) Equity investments and donations to an accredited SE shall be fully deductible trom the
toss income of the investor or donor subject to the conditions of Section 34 paragraph (c) of RA 8424
otherwise known as the “National Intemal Rerenne Code of 1997,”"s amended.

b) Donations to an accredited SE. shall be exempt from donor’s tax subject ip the
qualifications of Section 101 of RA 8424, as amended.



Cor DHEA

26

29
30
31

32
33
34
35
36
37
38
39
40
41

42
43

44
45
46
47
48
49
50
51

incentives under this Section, the accreditation of the
sufficient evidence for qualification 2s a social investor under

For the purpose of availing of the t
recipient SE by the Council shall be a
this Act.

CHAPTER V
APPROPRIATION AND OTHER PROVISIONS

SECTION 27. Appropriations. —To carry out the provisions of this Act, the following amounts
are appropriated as follow8:

a) ‘The sum of One hundred million pesos (P100,000,000.00) is hereby appropriated as the
initial operating fund which sum shall be sourced from the President's Contingent Fund and voluntary
contributions, grants and gifts from both local and foreign sources as may be accepted by the Council
In the subsequent years, the Council shall have a separate annual appropriation under the DTI which
shall be included in the annual General Appropriations Act starting in the fiscal year immediately
following the approval of this Act.

b) ‘The aggregate sum of ‘Three billion pesos (P3,000,000,000.00) for ten (10) years is
hereby appropriated for the establishment of the SEDF from the share of the national government in
the earnings of the PAGCOR and from voluntary contributions, grants and gifts from both local and
foreign sources as may be accepted by the Council, in the following manner: on the first year, One
hundred million pesos (P100,000,000.00); on the second year, One hundred fifty million pesos
(P150,000,000.00); on the third year, ‘Two hundred million pesos (P200,000,000.00); on the fourth year,
‘Two hundred fifty million pesos (P250,000,000.00); on the fifth year, Three hundred million pesos
(P300,000,000.00); and every year thereafter until the tenth year, Five hundred million pesos
(P500,000,000.00) annually.

TON 28. Penalty Clause. — The penalty of imprisonment for not less than six (6) months
but not more than two (2) years or a fine of not less than Twenty-five thousand pesos (P25,000.00) but
hot more than Fifty thousand pesos (P50,000.00), or both imprisonment and fine, at the discretion of
the court, shall be imposed upon any person, corporation, government entity or agency who,
intentionally or by gross negligence, fails to provide the benefits, rights and incentives granted to, Slis in
violation of this Act, oF perform any act in violation of its provisions.

If the violation is committed by the SE or a government agency, the members, ol
directors or trustees thereof who are directly involved shall be held liable therefor.

If the violation is committed by the employees and agents who acted in gross violation of the
provisions of this Act, the officers, directors or trustees, or incorporators of the SE shall be jointly and
severally liable with the offending employees, agents, and the enterprise.

If the offender is a public official or employee, the offender
accessory penalty of absolute disqualification.

SE

cr,

all, upon conviction, suffer the

SECTION 29. Non-Compliance with the Mandatory Allocation of Credit Resourets, — Administcative
sanctions including a fine of not less than Five hundred thousand pesos (P500,000.00) shall be imposed
by the Banko Sentral ng Pilipinas upon any banking or lending institution who fails to provide the
credit allocations granted to SE in violation of Section 19 of this Act.

SECTION 30. Now-Impairment Claus. — Nothing in this Act shall be construed to diminish,
impair, or repeal the rights granted to marginalized sectors under existing laws.

SECTION 31. Information Dissemination. — ‘The Philippine Information Agency (PIA) shall, in
coordination with the Council, the DTI, DA, and the DILG, ensure the proper and adequate
information dissemination of the contents and benefits of this Act to the general public especially to its
intended beneficiaries.

16


23

26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
4
42
43
44
45
46
47
48
49
50
51
52

53

Within sixty days (60) after its effectivity, the Council shall distribute copies of this Act to every
department, agency, subdivision, and instrumentality of the government, including government-owned
and controlled corporations, regional and provincial offices, and local governments. i

All duly accredited SEs shall be given one (1) copy of this Act at cost. Thereafter, every newly
accredited SE shall be issued a copy of this Act together with the rules and regulations promulgated
pursuant to this Act.

SECTION 32. PRESENT Program in Government. — All agencies of the government
implementing a poverty alleviation program shall, in coordination with the Council and within a period
of tive (3) years but in no case longer than ten (10) years from the approval of this Act, incorporate the
PRESENT Program in their respective poverty alleviation programs as a tool for poverty reduction,
The Council shall, in coordination with the various government agencies with poverty
lleviation programs, prepare the appropriate beneficiaries thereof and organize them into full-fledged
25 under the contemplation of this Act.

Within a period of five (5) years, the Council shall facilitate the development and dissemination
of tools, and invest in the development of the capability of SEs to plan, monitor and evaluate their
social and financial performance and outcomes. ‘The Council shall evolve socially acceptable
benchmarks for evaluating the performance of SEs and incorporate them to effectively develop and
regulate the sector.

SECTION 33. Social Entreprencurship Education. in’ Schools ~ ‘Toward strategically
developing the nation’s human resource capability in social entrepreneurship, the DepEd and the
CHED shall cause the integration of SE. content and inclusion of SE. courses in the curricula at all
levels, especially in the secondary and tertiary levels. This shall he part of the SE. Capability Building and
Sustainability Program stated in Sa of this Ad

\ continuing social entrepreneurship 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 regard

a) social issues and civic ways of add
b) the producer as a steward of natural resources
©) the consumer as a responsible member of society and his responsibility to develop

critical awareness which is the responsibility to be alert and questioning about the
environmental and social impacts of the goods and services he/she uses;

cL) social concem which is the responsibility to be aware of the impact of his
‘consumption to society, advantaged; and

€.2) environmental awareness which is the responsibility to understand the
environmental consequences of his use of natural resources, consumption, recognizing
his individual and social responsibilty to conserve natural resources lor future
generations;

All higher learning institutions and vocational schools are mandated to include a subject on social
entrepreneurship in their social studies program or in their business, commerce, or economics courses.

CTION 34. Applicability of Osher Laws. — The Labor Code and all other labor laws, the Social
Security Act, the Medical Care Act, other social legislations, and all other laws and executive orders that
govern the relationship between the employer and the employee shall apply to SE and its employees
and that all employees covered under this Acr shall be entitled to the same benefits given to any regular
employee such as social security and healthcare bene!

7



25

7
28
29
30
31
32
33
34
35
36
37
38
39
40
4l
42
4B
44
45
46
47

SECTION 35. Interpretation and Construction. —\n case of doubt in the meaning of any provision
of this Act o in the rules and regulations promulgated pursuant to this Act, it shall be resolved in favor
of SEs and their stakeholders.

SECTION 36. Congressional Oversight Committe. — There is hereby created a Congressional
Oversight Committee on Social Enterprises composed of the Chairman of the Senate Committee on
Economic Affairs, Trade and Commerce and the Chairman of the House Committee on ‘Trade and
Industry, four (4) members of the Senate and four (4) members of the House of Representatives. The
members from the Senate shall be appointed by the Senate President from among the members of the
Senate Commirtee on Economic Affairs, ‘Trade and Commerce based on the proportional
representation of the parties or coalition therein. The members from the House of Representatives
shall be appointed by the Speaker from among the members of the House Committee on Trade and
Industry based on the proportional representation of the parties or coalitions therein.

The Oversight Committee, upon review and approval of the Implementing, Rules and
Regulations of this Act shall become functs officio and thereafter cease to exist: Provided, bonever, That
the Council shall submit to the Committee on Economic Affairs, Trade and Commerce of the Senate
and the Committee on Trade and Industry of the House of Representatives an annual report on the

implementation of this Act
‘The appropriation for the oversight committee shall be charged to the budget of both Houses
of Congress in the annual General Appropriations Act.

SECTION 37. Sorial Enterprise Week. — In order to institute continuing awareness on the
importance of SEs as a nment strategy in pursuing poverty alleviation, the week of the
month when this Act shall have been signed in Il be declared as the "Social Enterprise Week!"
and shall be celebrated annually. ‘The Couneil shall, through the NCSED, be responsible in organizing,
xctivities for the event.

viable gow

CHAPTER V
FINAL PROVISIONS
“TION 38. Implementing Rules and Regulations. — Within ninety (90) days from the effectivity
of this Act, the Secretary of ‘Trade and Industry shall, in consultation and coordination with. the
concerned government agencies and sector, promulgate the necessary rules and regulations for the
effective implementation of this Act.
2CTION 39. Separability Clause. —1t any provision or part of this Act is declared inyalid or

unconstitutional, the remaining parts oF provisions not affected shall remain in full force and effect

SECTION 40. Repealing Clause. — For purposes of this Act, Section 11 of RA 8425 and Sections
50, 52 and 53 of RA 9184 which are inconsistent with this Act are hereby deemed amended. All other
laws, executive orders, presidential decrees, rules and regulation or parts thereof inconsistent with any
provisions of this Act are hereby repealed, amended or modified accordingly.

SECTION 41. Eifeetioity, — This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in two (2) national newspapers of general circulation.

Approved,

18