Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _____ 
Introduced by CIBAC Party-List Representative 
Eduardo “Bro. Eddie” C. Villanueva 
AN ACT 
STIMULATING THE RECOVERY, GROWTH, AND DEVELOPMENT 
OF THE MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) 
FOR JOB GENERATION AND PRESERVATION, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
Micro, small and medium enterprises (MSMEs) are the backbone of 
our economy. They play a vital role in developing the Philippine economy 
by creating jobs for the country’s labor force, providing healthy competition 
to large corporations by conveniently offering goods and services to 
customers, and promoting entrepreneurship by being starting points for 
what could potentially be larger corporations. According to the Department 
of Trade and Investment (DTI), MSMEs account for a staggering 99.5% 
of all business in the country and account for 62.66% of the country’s 
employment in 2020.1  
Despite their size as a sector, MSMEs have become extremely 
vulnerable and continue to face many growth challenges as they recover 
1 https://www.dti.gov.ph/resources/msme-statistics/ 
July 25, 2022
8:00 am
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from the effects of the COVID-19 pandemic. In a study conducted by the 
Asian Development Bank Institute on February 2021, it was found that 
61.7% of micro, 49.1% of small, and 35.8% of medium sized businesses 
had little to zero revenue and were forced to temporarily  close at the 
advent of the pandemic.2 In addition, 68% of micro, 59.5% of small, and 
78.6% of medium sized businesses were constrained to retrench their 
employees. 3 To make matters worse, MSME’s have recently had to 
endure further business losses as a result of natural calamities such as 
typhoons and global economic events such as the Russia-Ukraine 
conflict. 
 
  
Presently, any momentum to spur recovery for the sector as a result 
of the opening of the economy is stifled in the wake of increased prices in 
oil and basic commodities and consequently, increased operational cost. 
To assist them in their recovery, we need to throw these businesses a 
lifeline in order to give them breathing room to generate revenue, while 
retaining all those under their employ. 
 
  
Thus, this bill aims to support MSMEs by providing them with 
interest-free financial assistance, and subsidies to aid them in paying their 
employees’ wages. This bill also seeks to establish a contingent fund to 
cushion any adverse impact brought about by natural disasters, public 
health emergencies, and other related contingencies that may further 
cripple this already struggling industry. 
 
 
 
The immediate passage of this bill is earnestly sought. 
 
 
 
 
 
 
 
 
2 https://www.adb.org/sites/default/files/publication/677321/adbi-wp1216.pdf 
3 Id. 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _____ 
Introduced by CIBAC Party-List Representative 
Eduardo “Bro. Eddie” C. Villanueva 
AN ACT 
STIMULATING THE RECOVERY, GROWTH, AND DEVELOPMENT 
OF THE MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) 
FOR JOB GENERATION AND PRESERVATION, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
  Be it enacted by the Senate and House of Representatives of the 
1 
Philippines in Congress assembled:
2 
3 
SECTION 1. Short Title. – This Act shall be known as the “MSME 
4 
Stimulus Act.” 
5 
6 
SECTION 2. Declaration of Policy. – The State recognizes that 
7 
micro, small and medium enterprises (MSMEs) comprise the most 
8 
significant number of establishments in the Philippines and are one of the 
9 
biggest generators of employment in the country. Thus, it is hereby 
10 
declared the policy of the State to support, strengthen and facilitate the 
11 
growth of MSMEs for job generation and preservation as the sector 
12 
recovers from the crippling effects of the COVID-19 pandemic, rising 
13 
prices of oil, inflation, and global economic shocks. For this purpose, the 
14 
State shall support and establish programs for MSMEs' growth and 
15 
development to achieve these objectives. 
16 
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1 
  
SECTION 3.  Coverage. - This Act shall cover all MSMEs in the 
2 
country affected by disasters, public health emergencies, war, armed 
3 
conflict, economic crises, and other related contingencies, such as 
4 
technological or policy-related disruptions and analogous causes. 
5 
 
6 
  
SECTION 4. MSME Growth Stimulus Program. – An MSME 
7 
Growth Stimulus Program is hereby established to extend assistance, 
8 
strengthen and facilitate the growth and development of MSMEs for 
9 
regional job generation and preservation.     
10 
 
11 
  
SECTION 5. Modes of Assistance. – The MSME Growth Stimulus 
12 
Program shall have the following components, without prejudice to 
13 
expansion or creation of other modes of assistance: 
14 
 
15 
a) 
Interest Free Loans. The Land Bank of the Philippines (LBP) and 
16 
the Development Bank of the Philippines (DBP) shall provide an 
17 
interest-free loan program to qualified MSMEs to support growth 
18 
assistance, regional job creation and continued business operations 
19 
(MSME Growth Assistance Program).  
20 
 
21 
The MSME Growth Assistance Program shall be subject to the 
22 
following conditions and such other requirements as may be imposed 
23 
by the Department of Finance (DOF) and the Bangko Sentral ng 
24 
Pilipinas (BSP): 
25 
 
26 
1) 
The maximum loanable amount shall be equivalent to one 
27 
hundred fifty percent (150%) of the MSME’s labor and overhead 
28 
costs for six (6) months;  
29 
 
30 
2) 
The loan shall be payable within three (3) years; and 
31 
 
32 
3) 
No collateral shall be required as security for the loan, except if 
33 
the amount of the loan exceeds Three Million Pesos 
34 
(Php3,000,000.00). 
35 
  
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b) 
Wage Subsidy. The DOF, through the Social Security System 
1 
(SSS), shall provide a wage subsidy to cover all or a portion of the 
2 
wages of the employees of qualified MSMEs (MSME Wage 
3 
Assistance Program). The wage subsidy shall be subject to the 
4 
following conditions and such other requirements as may be imposed 
5 
by DOF and SSS, in coordination with the Department of Labor and 
6 
Employment (DOLE): 
7 
 
8 
1) 
The wage subsidy shall be based on the regional minimum wage 
9 
per month, but not to exceed Eight Thousand Pesos 
10 
(Php8,000.00) per employee;  
11 
 
12 
2) 
The Wage shall only cover rank-and-file employees of qualified 
13 
MSMEs; and  
14 
 
15 
3) 
The term of the subsidy shall be for a maximum period of three 
16 
(3) months.  
17 
 
18 
SECTION 6. Eligibility Requirements for MSME Growth 
19 
Stimulus Program. – To be eligible to avail of the benefits under the 
20 
MSME Growth Stimulus Program, MSMEs must be:  
21 
 
22 
a) 
Duly-registered with the Bureau of Internal Revenue, and no tax-
23 
related cases or proceedings are pending against it. For this 
24 
purpose, a Certificate of Good Standing or such other 
25 
appropriate proof shall be presented;  
26 
 
27 
b) 
Duly registered with, and compliant with all its obligations under 
28 
all government social security programs, including, but not 
29 
limited, 
to 
the 
Social 
Security 
System 
(SSS), 
Home 
30 
Development Mutual Fund (Pag-Ibig) and Philippine Health 
31 
Insurance Corporation (PhilHealth);  
32 
 
33 
c) 
Have no pending labor cases; and 
34 
 
35 
d) 
As a condition for the availment of the benefits of this Act, must 
36 
commit to maintain its personnel from the time of availment of 
37 


 
the benefits under this Act up to twelve (12) months thereafter. 
1 
During the same period, it shall further commit to refrain from 
2 
terminating its employees due to authorized causes as provided 
3 
under Article 283 of the Labor Code of the Philippines, unless in 
4 
exceptional and meritorious cases as determined by the 
5 
Secretary of Labor and Employment.  
6 
 
7 
Non-compliance with the foregoing conditions shall render any loan 
8 
obtained under the Program to be immediately payable with 
9 
corresponding legal interest. In the case of wage subsidy, the non-
10 
compliant MSME shall immediately refund all benefits received under the 
11 
Program, with the corresponding legal interest.  
12 
 
13 
  
SECTION 7. Contingency Fund for MSMEs’ Growth Stimulus 
14 
Program. – There is hereby established as a special account with the 
15 
National Treasury, a contingency fund called the MSME Stimulus 
16 
Contingency Fund for selective implementation in priority job-generating 
17 
industries' sectors such as agri-food and fishing or areas affected by 
18 
disasters, public health emergencies, armed conflict, and other related 
19 
contingencies, such as technological or policy-related disruptions and 
20 
analogous causes.  
21 
 
22 
  
SECTION 8. Appropriations. – An amount of One Hundred Billion 
23 
Pesos (Php100,000,000,000.00) shall be appropriated for the initial 
24 
implementation of this Act, to be divided as follows:  
25 
 
26 
a) 
Forty Billion Pesos (Php40,000,000,000.00) for the MSME Growth 
27 
Assistance, which shall be lodged under the budget of the 
28 
Department of Trade and Industry (DTI); 
29 
 
30 
b) 
Forty Billion Pesos (Php40,000,000,000.00) for the MSME Wage 
31 
Assistance, which shall be lodged under the budget of DOF; and 
32 
 
33 
c) 
Twenty Billion Pesos (Php20,000,000,000.00) for the MSME 
34 
Stimulus Contingency Fund, which shall be lodged under the budget 
35 
of DOF. 
36 
 
37 


 
Thereafter, an amount of not less than Twenty Billion Pesos 
1 
(Php20,000,000,000.00) shall be appropriated annually for the 
2 
implementation of this Act, and augmented by available funds from 
3 
unprogrammed funds and savings realized by any government agency or 
4 
instrumentality under the Executive Department. 
5 
 
6 
  
SECTION 9. Implementing Rules and Regulations. –  The DOF, 
7 
DTI and DOLE, upon consultation with appropriate government agencies 
8 
and other stakeholders, shall promulgate the necessary rules and 
9 
regulations to implement this Act within sixty (60) days from its effectivity. 
10 
 
11 
  
SECTION 10. Separability Clause. –  Any portion or provision of 
12 
this Act that is declared unconstitutional or invalid shall not have the effect 
13 
of nullifying other portions or provisions hereof as long as such remaining 
14 
portions can still subsist and be given effect in their entirety. 
15 
 
16 
  
SECTION 11. Repealing Clause. – All laws, ordinances, rules, 
17 
regulations, other issuances, or parts thereof, which are inconsistent with 
18 
this Act, are hereby repealed or modified accordingly.  
19 
 
20 
  
SECTION 12. Effectivity. –  This Act shall take effect fifteen (15) 
21 
days after its publication in the Official Gazette or in a newspaper of 
22 
general circulation. 
23 
 
24 
  
Approved, 
25