HUuSE WF & PRESENTATIVES

RECEIVED

Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
REQISTRATION UNIT
SEVENTEENTH CONGRESS BILLS AND INDEX SERVICE
First Regular Session
105

HOUSE BILL NO.

Introduced by REP. TEDDY BRAWNER BAGUILAT

EXPLANATORY NOTE

Itis 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 (GE) Bill seeks to provide @ nurturing environment for the
development and growth of strong, pro-active and innovative social enterprises as major
vehicles for poverty reduction, It enacts @ 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 (DT).
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 potentials 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 strategic economic subsectors and as partners in economic and social
development.

The SE bill endeavored to provide for accessible non-collateralized loans thru
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 program promoting principles of fair trade; research



and development on strategic economic subsectors, 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 eriterprises 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 eamestly sought.

TEDDY/SRAWNER BAGUILAT
entative, Lone District of ifugao



Te

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House eit no, 1105

‘AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE
POVERTY, ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION
THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM AND
PROVIDING INCENTIVES AND BENEFITS THEREFOR

CHAPTER!
GENERAL PROVISIONS

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

SECTION 2. Statement of Policy. - 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 life for
all. In Article il, Sections 10 and 11, it is further declared that the State shall provide
social justice in all phases of national development and that the State values the dignity
of every human person and guarantees full respect for human rights.

In Article XII, Section 1, it is 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 development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices

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
exiend the assistance necessary for their advancement, The State shall likewise ensure
that the provision for technical and financial assistance, incentives and other services
are {ree 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 Enterprise or SE refers 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 financial, social and ecological. It generates profit or surplus with due
regard to social 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
Poor as Primary Stakeholders (SEPPS). A SEPPS 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. A SEPPS engages and invests in
the poor to become effective workers, suppliers, clients and/or owners, and/or
ensures that a substantive part of the wealth created by the enterprise is distributed
to, of 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 partners 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 household below the food
threshold level, . %

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

@) Basic sectors 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, otherwise known as the “Social Reform and Poverty Alleviation Act’;


©) Bottom line shall refer to the objectives or purposes for which a SE is
established, Triple bottom line shall refer to social, ecological and financial objectives;

1) 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-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;

2) Civil society organizations refer 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;

h) Council shall refer to the SE Council;

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, as amended
by R.A, 9620, otherwise known as the "Philippine Cooperative Code of 2008";

}) Corporate Social Responsibility or CSR shall refer to the commitment of a private
enterprise or business to contribute on a voluntary basis to @ sustainable social and
economic development by working with relevant stakeholders to improve their lives in
ways that are good 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) Scientific
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 worker welfare related CSR activities;

\) 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 consumers; 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 effectively reach and benefit a greater number of poor in poverty reduction
programs;

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

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

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

©) Fair trade principles refer to the values adopted by fair trade organizations in
their day-to-day operation, These include creating opportunities for economically-
disadvantaged producers; transparency and accountability; payment of a fair price:
ensuring no child labor and forced labor; commitment to non-discrimination, gender
equily and freedom of association; ensuring good working conditions; providing
capacity building, and, respect for the environment;

p) Foundation 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 out 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;

@) 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,”

©) 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
mass of these marginalized stakeholders;

8) Marginalized Sectors shall refer to groups of people who are stigmatized or
marginalized by virtue of their physical, psychological, economic, social or cultural
circumstance,

\) Micro-enterprise as defined in R.A, No. 6977, 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, agribusiness 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 not more than Three Million Pesos (P3,000,000,00). 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
size;

¥) Microfinance shall refer to the provision of a broad range of financial services
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 community development, family and psycho-social care)

1) Non-Government 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, ahd other similar activities and, as defined under Section 34
(H)(2)(0) 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:

\)_ People's Organization or PO refers to a self-help group belonging to the basic
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 for a human being;

4) Poor shall 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 their minimum basic needs
of food, health, education, housing and other essential amenities of life, as defined
under R.A. 8425;

aa) Poverty reduction/alleviation 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) Private Enterprise 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 owners;

cc) Procuring Entity refers to any branch, department, office, agency, or
instrumentality of the government, 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 services of a SE in
order to finance or subsidize the operations of its core development program or
development interventions among the marginalized sectors;

ec) SEGFP refers to the SE Guarantee Fund Pool created under this Act;

11) Social development refers to the continuing process of addressing the
needs of society, beginning with the people's minimum basic needs, through a
systematic implementation of socioeconomic programs or packages;

sg) Social Enterprise Service Institution refers to an organization that
provides assistance to SEs 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) Social 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) Social 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;

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 virtue-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;

ll) 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, concem for environmental



protection, strong organizational governance,” and a desire for a more
‘economically just world;

mm) Social reform refers to the continuing process of addressing the basic
inequities in society through a systematic, unified and coordinated delivery of
socioeconomic programs or packages;

tun) Transactional roles refer to enterprise-related functions performed by the
poor that involve an exchange of goods or services for money including being
workers, suppliers, clients or owners;

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

pp) Transactional services pertain to enterprise or market-driven activities,
such as providing loans, demonstrating new technologies or conducting trainings
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;

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
whole;

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

ss) 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

«Value 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) 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
benefits of the poor in the value chain and towards ensuring the viability and
sustainability of the enterprise.


CHAPTER It
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISES

SECTION 4, Social Enterprise (SE); General Concept and Coverage — A SE,
for purposes of this Act, refers to a Social Enterprise with the Poor as Primary
Stakeholders as the term is defined in Sec. 3a of this Act. It 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:

SECTION 5. Eligibility for Benefits and Incentives. - To be 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 organizations;

b) invest a substantive part of its surplus, profits or mobilize other resources to
assist the poor to become partners in SE or value chain
managementgovernance 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 due regard to social and environmental
costs;

4) 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
activily in any of the economic subsectors;

) ensure that a substantive part of the 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;

3) 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 @ workable strategy to achieve financial sustainabllity over a
reasonable period of time.

SECTION 6. Other 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. If the enterprise is 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

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

SECTION 7. Qualifications. ~ 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 to qualify as SE
under this Act, following the principles of self-regulation, transparency and responsibility.

SECTION 8. Formulation of a Poverty Reduction Through Social
Entrepreneurship (PRESENT) Program — To promote the development of a SE
sector with the poor as primary stakeholders, a comprehensive and fully-integrated
Poverty Reduction Through Social Entrepreneurship (PRESENT) Program, shall be
formulated, guided by the following principles:

a) Incorporation of the PRESENT Program in the government's poverty
reduction drive as a major sustainable and comprehensive strategy;

b) Rationalization of poverty reduction programs by streamlining and
coordinating the various 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;

«l) Promoting sustainable programs that reduce inequality in incomes across
economic sectors and increase self-reliance among the poor,

ce) Enabling SEs 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-sensitivity by ensuring women's equal rights and access to.SE's
resources; and,

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

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, SEs shall be developed
as vehicles to ensure that the poor benefit the most from sustainable subsector
development ;

PRESENT medium-term and annual development plans shall be: formulated in
synchrony with the medium-term development plan of the national government

SECTION 9. Social Enterprise Development Council. - To carry out the
policy declared under this Act, a Social Enterprise Development Council (SEDC),
hereinafter referred to as the Council, is hereby created as an agency attached to the
Department of Trade and Industry (DTI), It shall be the primary agency tasked to carry
out 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 chairperson;

b) Secretary of Agriculture, as co-vice chairperson

©) Lead Convenor of the National Anti-Poverty Council (NAPC), as co-vice
chairperson;

d) SE sector head representative, as co-vice chairperson;

c) Secretary of Social Welfare and Development;

1) Director-General of the National Economic Development Authority
(NEDA)

2) Secretary of Finance;

h) Secretary of the interior and Local Government;



i) Secretary of Labor and Employment;

J) Secretary of Science and Technology;

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 SEs, three (3) representatives each from
the main island groupings of Luzon, Visayas, and Mindariao:

g Three (3) representatives from SE service institutions; and

1) Three (3) representatives from SE advocacy groups, as members.

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 existing laws, rules and regulations.

The Council shall, from time to time, call upon the participation of any
government 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.
powers and functions:

a) Formulate policies, plans, programs and projects to develop and pramote
SEs as a tool for poverty reduction consistent with national development objectives;

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

©) Identify and access sources of financing to expand the SE sector,

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

) Call upon any government agency to carry out and implement programs
and projects identified by the Council;

The Council shall have the following



) Call upon people's organizations, non-government organizations, the
academe and other sectors to provide advice on matters pertaining to SEs and conduct
of transactional and transformational services to farmers, producers, workers,
consumers and other stakeholders; : .

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

h) — Promulgate such rules and regulations and exercise such other powers
and functions as may be necessary to carry out the purposes of this Act; and
i) Perform such other functions as may be necessary for its effective

operations and the continued enhancement, growth and development of the SE sector.

SECTION, 11, Secretariat. ~ There is hereby created a Secretariat headed by an
Executive Director to serve as the national technical and administrative secretariat of the
Council with the member agencies providing additional support staff when the need
arises. The Secretariat shall perform the following functions:

a) 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 plans;

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;

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

e) Prepare, collate and integrate all necessary inputs to 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

9) Perform other functions that may be assigned and authorized by the

Council

SECTION. 12. Office. - 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 camry out the powers and
functions of the Council

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

a) Provide SEs with capability-training 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 SE with innovative and.sustainable approaches that ensures improvement
in the access to basic social services by the poor pursuant to Section 18 of this Act; and

c) Manage a Social Enterprise Marketing Assistance Program (SMAP) 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 ISSI), the Technical Education and Skills Development
Authority (TESDA), the Technology and Livelihood Resource Center (TLRC), the
Department of Transportation and Communications (DOTC), civil society organizations
and other relevant agencies, state universities and colleges in implementing its
programs.

SECTION. 14.Personnel. — Subject to the civil service laws, rules and
regulations, the Council is authorized to select, appoint, employ and fix the
compensation of the officers and employees of the Secretariat and the NCSED as shall
be necessary to carry out its functions.

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 and the implementation and
enforcement of the relevant 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 jurisdiction

LGUs with viable SE development plan as incorporated in their 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
shail establish and operate its own SE.

CHAPTER II
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 training 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.

The SE Capability 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 (SEDF) inthe amount of Three Billion Pesgs (P3,000,000,000.00) to be
administered by the Council with an endowment from the earnings of the Philippine
Amusement and Gaming Corporation (PAGCOR), in addition to appropriations by



Congress, voluntary contributions, grants, gifts from both local and foreign sources as
may be accepted by the Council. Capability building projects approved by the 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
SEDF in the following year.

SECTION 17. Social Enterprise Research and Development System -The
Council, in coordination with the NEDA, DOST, and DTI, and other appropriate agencies
and research institutions, shall develop and enhance a research and development
system tha .

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;

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 institutions with innovative and sustainable approaches to
improve access of the poor to quality basic social services.

SECTION 18. Social Enterprise Marketing infrastructure Development - The
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 shalt

a) establish a SE Marketing Assistance 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 provincial 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 internet 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 at the local and regional levels,

All government departments, agencies, bureaus, research institutions, as well as
the LGUs shall consolidate and continuously update all relevant information and data
that would be of use to SEs on a 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

4 Supply data;

2. Demand data;
3 Price and Price trends;



Product standards;

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

Information and technology generated from research institutions

International, regional and local market forecasts;.and

Resource accounting data

ONOTOR

CHAPTER IV
INCENTIVES AND BENEFITS

SECTION 19. Special Credit Windows. - |n 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 SEs.

For 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 portfolio 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: Provided, 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 mandatory credit allocation such as possible reduction in bank's reserve
requirement

The Council shall establish a system to monitor all loan applications of SEs in
order to account for the absorptive capacity of the SE sector. The BSP shall require
lending institutions covered by this Act to 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.

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

a) Organizational, developmental loan or capacity-building loan for the
conduct of social preparation activities or the conduct of capability-building and training
of professional development of the board, 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;



d) Value chain financing to cover any of the value chain activities such as
production, processing 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

) Revolving Credit Line for re-lending to finance the livelihood project
requirements of end-borrowers.

SECTION 21. Eligibility for Agriculture and Fisheries Credit. - At least ten
percent (10%) of the funds created under Section 6 of RA 10000, otherwise known as
“The Agri-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 agriculture and fisheries activities.

SECTION 22, Social Enterprise Guarantee Fund Pool with Non-Collateral
Loans. ~ There 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 government-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 (PNOC), as
contribution to the SGFP 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 SEGFP 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 mechanics and administrative arrangements and issue the implementing guidelines
for the fund pool.

SECTION 23, Utilization of People's Development Trust Fund.- The
earnings of the People's Development Trust Fund (PDTF) declared under Section 11 of
RA 8425 may be utilized and accessed by the NSCED or accredited SE for the following
purposes:

a) Consultancy and training services for SEs and their beneficiaries on the
establishment of the necéssary 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,

b) Scholarships or training grants for SE staff and officers, and selected
beneficiaries;
©) Community organizing for SEs;

d) SE development and capability building programs, feasibility studies and
researches;



®) Legal 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

g) Other activities to support SEs as approved by the designated agency
administering the PDTF.

SECTION 24. Tax 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: Provided, That such.net income shall be
allocated for transformational services and other activities of the SE as provided under
Section 5.9 of this Act;

b) Documentary stamp tax;

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

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

the Council, in consultation with the Department of Finance (DOF) and the Board of
investment (BO!),of the DTI, shall be exempted from the payment of tariff and duties for
the importation of all lypes 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 SEs and can be shown to be directly
related to further improve the value chain operations of the SEs.

The Council shall, in consultation with the DOF and the BOI, within ninety (20)
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 the SEs. :

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, Preferential 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,

SEs 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 unforeseen contingency 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 procuring entity which is duly
certified by the Council as having the capacity to supply the required goods and
services; Provided, further, That the amount shall not exceed One hundred thousand
pesos (P100,000.00).

Shopping as provided in Section 52, paragraph (b) of RA 9184 may be resorted
in the procurement of ordinary or regular office supplies and equipment not available in



the Procurement Service involving an amount not exceeding Two hundred fifty thousand
pesos (P250,000.00): Provided, That the Procurement does not result in splitting of
contracts; Provided, further, That a price quotations shall be first obtained from a social
enterprise as certified by the Council as having the capacity to 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 Section 53 of RA 9184 may
be allowed when the goods or services subject of the procurement may be obtained
from a SE within the area of operation of the procuring entity which is duly certified by
the Council as having the capacity to supply the required goods and services

Only in the event that no procurement is perfected by way of direct contracting,
shopping, or negotiated procurement due to the absence of SEs within the area of
operation of the procuring entity or the lack 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

‘A procuring entity, when applicable, shall have at least one member representing
SEs.

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 services 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 (DILG),
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 from the gross income of the investor or donor subject to the conditions of
Section 34 paragraph (c) of RA 8424 otherwise known as the "National Internal Revenue
Code of 1997,” as amended.

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

For the purpose of availing of the tax incentives under this Section, the
accreditation of the recipient SE by the Council shall be a sufficient evidence for
qualification as a social investor under 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 follows:

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 DT! 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 eamings 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

SECTION 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 not 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 SEs in violation
of this Act, or perform any act in violation of its provisions.

If the violation is committed by the SE or a government agency, the members,
officers, 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 shall, upon conviction,
suffer the accessory penalty of absolute disqualification.

SECTION 29, Non-Compliance with the Mandatory Allocation of Credit
Resources. ~ Administrative 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 1$ of this Act . .

SECTION 30. Non-Impairment.Ciause. ~ 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.

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.

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 five (5) 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 alleviation programs, prepare the appropriate beneficiaries thereof and organize
them into full-fledged SEs 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 Entrepreneurship 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 be part of the SE Capability Building and Sustainability
Program stated in Sec.'6 of this Act.

A continuing social entrepreneurship education program for out-of-school youth
and adults. shall_—slikewise. = be_~— developed =aand-—_uundertaken.

The social entrepreneurship education program for primary and secondary education
shall include information regarding

a) _ social issues and civic ways of addressing them
bh) the producer as a steward of natural resources
c) __ 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;

¢.1) social concern which is the responsibility to be aware of the impact
of his consumption to society, especially the disadvantaged; 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 responsibility to
conserve natural resources for 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.

SECTION 34. Applicability of Other 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

| OO mG



this Act shall be entitled to the same benefits given to any regular employee such as
social security and healthcare benefits.

SECTION 35. Interpretation and Construction. - In case of doubt in the
meaning of any provision of this Act or 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 Committee. - 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 Committee
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 functus officio: and thereafter cease to exist
Provided, however, 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. Social Enterprise Week. ~ In order to institute ‘continuing
awareness on the importance of SEs as a viable government strategy in pursuing
poverty alleviation, the week of the month when this Act shall have been signed into law
shall be declared as the "Social Enterprise Week" and shall be celebrated annually, The
Council shall, through the NCSED, be responsible in organizing activities for the event

CHAPTER V
FINAL PROVISIONS

SECTION 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

SECTION 39. Separability Clause. - If any provision or part of this Act is
declared invalid or unconstitutional, the remaining parts or 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, Effectivity. ~ 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,