NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE 
Senate Bill No. 75
*22 JUL-7 P2:05
Introduced by Senator Aquilino uKoko” Pimentel III
AN ACT PROVIDING A MICROFINANCING PROGRAM 
FOR MICRO ENTERPRISES THEREBY PROMOTING
ENTREPRENEURSHIP
EXPLANATORY NOTE
Our Constitution provides in Article II:
Section 9 that ‘The State shall promote a just and dynamic social 
order that will ensure the prosperity and independence of the nation 
and free the people from poverty through policies that provide 
adequate social services, promote full employment, a rising standard 
of living, and an improved quality of life for all.”;
Section 10 that “The State shall promote social justice in all 
phases of national development.”;
Section 19 that “The State shall develop a self-reliant and 
independent national economy effectively controlled by Filipinos.”;
Section 20 that “The State recognizes the indispensable role of the 
private sector, encourages private enterprise, and provides incentives 
to needed investments.”:


We already have laws recognizing micro enterprises. Access to 
financing is the lifeblood of micro enterprises. The lack thereof is a 
chronic barrier for them to survive and grow.
Truth be told, the economic effects of the COVID-19 pandemic 
have severely constrained the resources of many micro enterprises; 
their survival and growth now rely heavily on loans. However, high 
interest rates, voluminous and stringent documentary requirements, 
including the need for collaterals, are doing their businesses more harm 
than good. This ‘kapit sa patalim ’ condition leaves them with no other 
choice but to borrow money from the informal lenders or the so called 
“5-6” micro lending scheme.
The Supreme Court already ruled that imposition of usurious 
interest rates such as “5-6” money lending is illegal. With a nominal 
interest rate of twenty percent (20%) over an agreed period of time, the 
“5-6” system is said to yield more than 1000% interest rate on an annual 
basis. Such usurious rate of interest is not only excessive and 
unconscionable, but in all respects, immoral.
To be able to compete with the “5-6” money-lenders, our 
government, through the Small Business Corporation, implemented the 
Pondo sa Pagbabago at Pag-asenso (P3) Program in 2017. The 
program has provided cheaper source of financing to 197,075 micro 
enterprises as of February 2021. As such, there is a need to 
institutionalize, through law, the P3 Program as an alternative to the “5- 
6” micro lending scheme in order to give micro enterprises the means 
to effectively start or sustain their businesses and be able to generate 
more income, and hopefully, graduate from micro to small and then 
from small to medium, and, who knows, from medium to big, and on 
to being the next “unicorn company”.


Since this is our hope for all our entrepreneurs, the immediate 
passage of this bill is earnestly sought. The long journey to 
entrepreneurial success begins with such a simple step as this.
AQUILINO ‘
1OKO” PIMENTEL III


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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE 
Senate Bill No* 75
72 JUL-7 P2X)5
REeOVBUBY:
Introduced by Senator Aquilino uKoko” Pimentel III
AN ACT PROVIDING A MICROFINANCING PROGRAM 
FOR MICRO ENTERPRISES THEREBY PROMOTING
ENTREPRENEURSHIP
Be it enacted by the Senate and House of Representatives of the Ph ilippines in 
Congress assembled:
SECTION 1. Title. - This Act shall be known as the ''Rondo sa 
Pagbabago at Pag-asensd" or the "'PS Acf.
SECTION 2. Declaration of Policy. - It is a declared policy of 
the State to promote comprehensive national development and free the 
Filipino People from poverty by supporting micro enterprises that 
facilitate local job creation, production, and trade in the country. 
Towards this end, the State shall encourage entrepreneurial activities 
and develop programs, activities, and projects aimed at helping micro 
enterprises, particularly on access to financing.
SECTION 3. Objectives. - The objectives of this Act are as 
follows:
(a) To provide an affordable, accessible, and simple micro 
financing program for the country’s micro enterprises;


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(b) 
To provide a better alternative to the informal lenders or the 
so-called 445-6” money lending system availed of by micro 
enterprises; and
(c) 
To bring down the interest rate at which micro finance is 
made available to micro enterprises.
SECTION 4. Creation of the Pondo sa Pagbabago at Pag- 
asenso (P3). - There is hereby created the Pondo sa Pagbabago at Pag- 
asenso Fund, hereinafter referred to as the “P3 Fund”, which shall be 
made available to qualified micro enterprises under such terms and 
conditions that will meet the purposes of this Act.
The beneficiaries of the P3 Fund shall be micro enterprises as 
defined under Republic Act No. 6977, otherwise known as the C4Magna 
Carta for Micro, Small and Medium Enterprises (MSMEs)”, as 
amended.
SECTION 5, Lead Implementing Agency. - The Small Business 
Corporation (SB Corp.), the financing arm of the Department of Trade 
and Industry (DTI), shall be the lead implementing agency for the P3 
Fund. The SB Corp. shall handle the fund delivery to micro enterprises 
through the following modes:
(a) 
Direct lending; and
(b) 
Lending through accredited partner financial institutions 
(PFIs).
Accredited PFIs shall be limited to rural banks, cooperatives, 
micro financing institutions, or lending companies duly licensed to lend 
by the Bangko Sentral ng Pilipinas (BSP), Cooperative Development 
Authority (CDA), or the Securities and Exchange Commission (SEC), 
as may be required by law.
To support the administrative and operating expenses of the SB 
Corp., an amount not more than five percent (5%) of the total loans


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disbursed shall be provided annually to the SB Corp.5 to be sourced 
from the General Appropriations Act (GAA).
SECTION 6. Features of the P3 Fund. - The P3 Fund shall have 
the following features:
(a) 
The interest rate to be imposed on the loan availed of by the 
P3 Fund beneficiaries shall not exceed 2% per month;
(b) 
The interest earnings shall accrue to the P3 Fund;
(c) 
There shall be no collateral requirement from the P3 Fund 
beneficiaries; and
(d) 
The total loanable amount from the P3 Fund shall be set and 
regularly reviewed by the Micro, Small and Medium 
Enterprise Development (MSMED) Council.
SECTION 7. Policy Oversight Function. - The MSMED 
Council shall monitor the utilization and disbursements of the P3 Fund. 
It shall submit to the President of the Philippines and to Congress, 
through the Committee on Trade of both Houses, a yearly report on the 
status of the P3 Fund.
SECTION 8. Appropriations. - The amount necessary to carry 
out the provisions of this Act shall be charged against the 
appropriations released for the purpose under the GAA for the SB Corp. 
Thereafter, such sums as may be necessary for the continued 
implementation of this Act shall be included in the annual GAA.
SECTION 9. Implementing Rules and Regulations. - Within 
sixty (60) days from the approval of this Act, the DTI shall formulate 
and promulgate the necessary rules and regulations to implement the 
provisions of this Act. The implementing rules and regulations issued 
pursuant to this section shall take effect thirty (30) days after its 
publication in at least two (2) newspapers of general circulation.


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SECTION 10. Separability Clause. - Should any provision or 
part of this Act be declared unconstitutional or invalid, the other 
provisions and parts hereof, insofar as they are separable from the 
invalid ones, shall remain in full force and effect.
SECTION 11. Repealing Clause. - All laws, decrees, orders, 
issuances, rules and regulations or parts thereof which are inconsistent 
with this Act are hereby repealed or modified accordingly.
SECTION 12. Effectivity. - 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,