Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
NINETEENTHCONGRESS 
First Regular Session 
House Bill No._____ 
________________________________________________________________ 
Introduced by: REPRESENTATIVE EDWIN L. OLIVAREZ 
“AN ACT PROVIDING A SOCIALIZED MICROFINANCING PROGRAM FOR 
MICROENTERPRISES THEREBY PROMOTING ENTREPRENEURSHIP” 
EXPLANATORY NOTE 
Although the informal “5-6” lending practice come at a high interest rate, 
many still avail because this provides a more expeditious way of borrowing money. 
Additionally, the high collateral requirements of formal lenders have become a 
hindrance for micro, small, and medium enterprises (MSMEs) which lead to 
utilization of the services of informal lenders.  However, the usurious interest rates 
tend to become burdensome to entrepreneurs which affect their growth and 
development especially microenterprises. 
Considering the circumstances, this Bill seeks to institutionalize the “Pondo 
sa Pagbabago at Pag- asenso (P3) Fund” in order to provide an affordable, accessible, 
and simple micro-financing program, encourage microenterprises, and avoid, if not 
totally halt, borrowing from informal lenders. Through the passage of this Bill, 
microenterprises will be able to effectively sustain their businesses and become more 
self-sufficient. 
In order to address the financing difficulties of micro enterprises, the passage 
of this Bill is earnestly sought. 
EDWIN L. OLIVAREZ 
January 4, 2023
6:12 pm
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
NINETEENTHCONGRESS 
First Regular Session 
House Bill No._____ 
________________________________________________________________ 
Introduced by: REPRESENTATIVE EDWIN L. OLIVAREZ 
“AN ACT PROVIDING A SOCIALIZED MICROFINANCING PROGRAM FOR 
MICRO ENTERPRISES THEREBY PROMOTING ENTREPRENEURSHIP” 
Be it enacted in the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
SECTION 1. Short Title. — This Act shall be known as the “Pondo sa 
Pagbabago at Pag-asenso Act” or the “P3” Act”. 
SECTION 2. Declaration of Policy. — It is hereby the declared policy of the 
State to strengthen and promote the advancement and self-sufficiency of micro, 
small, and medium enterprises (MSMEs) in order to contribute greatly to the national 
development. Towards this end, the State shall initiate programs that will assist 
MSMEs in financing their respective enterprises in order to sustain the demands and 
constraints of their respective businesses. 
SECTION 3. Objectives. — The following are the objectives of the P3 Act: 
a. To provide an affordable, accessible, and simple microfinancing
program for the country’s microenterprises, especially those in the
poorest populations;
b. To provide a better alternative to the informal lenders usually availed
of by microenterprises; and
c. To provide a reasonable interest rate at which microfinance is made
available to microenterprises.
SECTION 4. Creation of the Pondo sa Pagbabago at Pag- asenso (P3); 
Microenterprises as Beneficiaries. — There is hereby created the Pondo sa 
Pagbabago at Pag-asenso, hereinafter referred to as the “P3 Fund” which shall be a 
fund specifically for the purpose of lending out to qualified microenterprises under 
such terms and conditions that shall be formulated under this Act. 
The beneficiaries of the P3 Fund shall be microenterprises, as defined under 
Republic Act No. 6977, as amended, or otherwise known as the “Magna Carta for 
Micro, Small, and Medium Enterprises (MSMEs)’. 
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The fund shall be primarily accessible through the accredited partner financial 
institutions (PFIs) such as rural banks, thrift banks, development banks, 
cooperatives with license to lend, micro-financing institutions (MFIs), or lending 
companies duly licensed by the Bangko Sentral ng Pilipinas, Cooperative 
Development Authority (CDA), or the Securities and Exchange Commission (SEC). 
 
SECTION 5. Lead Implementing Agency. — The Small Business Corporation 
(SB Corp.) which is the financing arm of the Department of Trade and Industry shall 
be the lead implementing agency for the P3 Fund. It shall handle the fund delivery 
to microenterprises through the following modes: 
 
a. Direct lending; 
 
b. Lending through accredited PFIs 
 
To fund the administrative and operating expenses of the SB Corp., an amount 
not exceeding five percent (5%) of the total loans disbursed shall be provided annually 
to the SB Corp. to be sourced out from an additional annual allocation. 
 
SECTION 6. Features of the P3 Fund. — The P3 Fund shall have the 
following features: 
 
a. The maximum interest rate to be imposed on the loan availed of by 
the P3 Fund beneficiaries shall be two and a half percent (2.5%) per 
month. Provided, that after three (3) years from the effectivity of this 
Act, a higher ceiling may be allowed up to three percent (3%) per month, 
subject to the review of the Micro, Small and Medium Enterprise 
(MSME) Council; 
 
b. The interest earnings shall accrue to the P3 Fund; 
 
c. No collateral requirement from the P3 Fund loan beneficiaries shall 
be required; and 
 
d. The loanable amount for individual loans shall be set and regularly 
reviewed by the MSMED Council. 
 
SECTION 7. Policy Oversight Function. — The MSME Council shall monitor 
both 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-MSME), 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 General Appropriations Act for the SB Corp. Thereafter, such 
sums as may be necessary for the continued implementation of this Act shall be 
included in the annual General Appropriations Act. 
 
SECTION 9. Implementing Rules and Regulations. — Within sixty (60) days 
from the approval of this Act, the Department of Trade and Industry 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. 
 
SECTION 10. Separability Clause. — |f any provision of this Act is declared 
invalid or unconstitutional, the other provisions not affected thereby shall remain 
valid and subsisting. 
 
SECTION 11. Repealing Clause. — All acts, executive orders, memorandum 
circulars/guidelines and other issuances 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 two (2) newspapers of general circulation 
 
APPROVED.