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Republic of the Philippines By
HOUSE OF REPRESENTATIVES RECEIVED

Quezon City

EIGHTEENTH CONGRESS
First Regular Session

4792
House Bill No.

INTRODUCED BY HONORABLE LIANDA B. BOLILIA

EXPLANATORY NOTE

Small and medium-scale businesses were estimated to contribute up to 62 percent of
employment and comprise more than 90 percent of all businesses in the Philippines.
However, they received only 9.2 percent of loans and financing from the country’s major
banks. The number of registered businesses in the Philippines was 1.42 million as of May
2019.1

Due to restraints to capital and funding sources, microenterprises resort to usurious
lenders or so-called “5-6” that imposes interest rate of twenty percent (20%) daily, weekly or
monthly. Most of these lenders are unregistered, without license, and don’t pay taxes.
Conservative estimates report that “5-6” is at least a P30 billion industry.

Indeed, addressing restraints to capital and funding sources of microenterprises will be
a key ingredient of growth. Following the directive of President Rodrigo Roa Duterte to
replace the “5-6” money lending system and provide an affordable micro-financing for the
country’s micro, small and medium enterprises (MSMEs), the Department of Trade and
Industry (DTI) launched the Pondo sa Pagbabago at Pag-asenso (P3) program in April 2017. As of
July 2019, the total loans disbursed to micro-entrepreneurs under the P3 program stood at
P29 billion?

The bill calls for the institutionalization of Pondo sa Pagbabago at Pag-asenso (P3) to
provide micro enterprises a better alternative of financing, thereby giving our small
entrepreneurs a chance to participate in the country’s develop Horts.

In view of the foregoing, the immediate enactment ap approfa} of this bill is earnestly

sought.
a)
LIANDA B. BOLILIA

Representative
4» District, Batangas

* https://opinion.inquirer.net/122798/micro-entrepreneurs-real-problem
2 https://www.bworldonline.com/dti-taps-more-credit-delivery-partners-for-p3-program/


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session
4792
House Bill No.

INTRODUCED BY HONORABLE LIANDA B. BOLILIA

AN ACT
INSTITUTIONALIZING THE PONDO PARA SA PAGBABAGO AT PAG-
ASENSO (P-3) PROGRAM OF THE GOVERNMENT AND APPROPRIATING
FUNDS THEREFOR

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

SECTION. 1. Title. - This Act shall be known as the “Pondo sa Paghabao at Pag-asenso
Act” or the “P3 Act”.

SEC. 2. Declaration of Policy. ~ It is a declared policy of the State to foster national
development, promote inclusive growth, and reduce poverty by promoting the growth
of micro enterprises that facilitate local job creation, production, and trade in the
country. Towards this end, the State shall develop policies, plans and programs, and
initiate means to encourage entrepreneurial activities, and to ease the constraints and
challenges to micro enterprises, particularly on access to financing.

SEC. 3. Objectives. - The objectives of this Act are as follows:

(a) To provide microenterprises with an alternative source of financing that is easy to
access and at reasonable cost;

(b) To stabilize informal lending and prevent micro entrepreneurs from falling victims
from usurious lenders; and

(c) Boost the development of entrepreneurship and the MSME sector, particularly the
microenterprises.

SEC. 4. Creation of the Pondo sa Pagbabao 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 microenterprises under such terms
and conditions of this Act.

‘The beneficiaries of the P3 Fund shall be microenterprises, as defined under
Republic Act No. 6977, as amended, or the “Magna Carta for Micro, Small and Medium
Enterprises (MSMEs).”


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The P3 Fund shall be primarily accessible through accredited microfinance
institutions (MFls), cooperatives, associations, banks, or lending companies duly
licensed by the Bango Sentral ng Pilipinas (BSP), Cooperative Development Authority
(CDA), or the Securities and Exchange Commission (SEC).

Sec. 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. It shall handle the fund delivery to
microenterprises through the following modes:

(a) Wholesale Lending; and
(b) Retail/Direct Lending

Sec. 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 2.5 percent per month; Provided, that five (5)
years after the effectivity of this Act, the SB Corp. may increase the interest
rate subject to the review of the Micro, Small and Medium Enterprise
Development (MSMED) Council;

(b) The interest earnings shall accrue to the P3 Fund; and

(©) There shall be no collateral requirement from the P3 Fund loan beneficiaries.

Sec. 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 Congressional Oversight Committee on Micro, Small and
Medium Enterprise Development (COC-MSMED), a yearly report on the status of the
P3 Fund.

Sec. 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.

SEC. 9. Implementing Rules and Regulations.- Within sixty (60) days from the
effectivity of this Act, the DTI shall formulate and promulgate the rules, regulations, and
other issuances as may be necessary to ensure the effective implementation of the
provisions of this Act.

SEC. 9. Separability Clause. - Should any provision herein be declared unconstitutional,
the same shalll not affect the validity of the other provisions of this Act.

SEC. 10. Repealing Clause. - All laws, decrees, orders, rules, and regulations or other
issuances or parts inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,