THIRTEENTH CONGRESS OF THE REPUBLI 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
E N  
L _ .  
Introduced by Senator S. R. Osmeiia Ill 
EXPLANATORY NOTE 
Latest figures of the National Statistics Office estimate that about 3.9 million 
Filipinos are out of jobs. 
To reduce, if not minimize the unemployment situation 
which has reportedly reached unprecedented proportions, the outlook of Filipino 
workers need to undergo a paradigm shift - Le. they need to begin to see themselves 
as new entrepreneurs - creators rather than seekers of job opportunities. 
The drive towards industrial development of most advanced courltries were 
invariably motivated by the vigor of small and medium enterprises (SMEs) that 
generated massive employment, thereby harnessing the creativity and energy of the 
people. The emerging small and medium enterprises in the Philippines, especially in 
the countryside face slim chances of survival because of technology backwardness, 
lack of accessibility to credit resources and to market opportunities. If the Philippines 
is to become globally competitive, the SMEs will provide the backbone for such 
competitiveness. Therefore no effort should be spared in promoting the development 
of these key sectors. 
This bill seeks to establish the Entrepinoy Development Authority, mandated to 
generate and coordinate various livelihood activities of all government agencies in 
order to accelerate the development of the Filipino entrepreneurial class. The 
Authority shall be governed by an inter-agency council with cabinet ranking officials as 
members. Existing offices such as the Small and Medium Enterprise Development 
Council, the DTl's Bureau of Small and Medium Business Development, 
Entrepreneurial Development Services Department, and Cottage Industry Technology 
Center shall be dissolved, and their functions transferred to the Authority for a more 
cohesive, and unified approach to entrepreneurial development. The bill presents the 
new administration with the valuable opportunity to rationalize all the diverse programs 
for the development of Livelihood, Micro, Cottage, Small and Medium enterprises 
(LMCSMEs) at the national and local levels. 
In view of the foregoing, the immediate approval of this bill is earnestly 
requested. 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS F THE REPUBLl 
OF THE PHILIPPINE 
) 
First Regular Session 
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I ‘  
S. No. 
Introduced by Senator S. R. OsmeAa 111 
AN ACT 
CREATING 
THE 
ENTREPINOY 
DEVELOPMENT 
AUTHORITY 
THEREBY 
INSTITUTIONALIZING, THE LIVELIHOOD MOVEMENT IN THE PHILIPPINES, 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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SECTION 1. Short Tifle. - This Act shall be known as the “Entrepinoy 
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Development Act of 2004.” 
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SEC. 2. Declarafion of Policy - The state hereby recognizes that an 
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entrepreneurial culture, as manifested in the proliferation, growth and 
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development of Livelihood, Micro, Cottage, Small and Medium Enterprises 
(LMCSME) that generates employment through out the country at relatively 
modest amounts of capital outlay is an indispensable catalyst of economic 
growth. It is therefore hereby declared the policy of the State to promote, 
develop and assist Entrepreneurial Filipinos (Entrepinoys) in establishing and 
launching the above-mentioned enterprises as the backbone of the country’s 
economic development. 
For this purpose, the state hereby rationalizes, and refocuses all 
government assistance and support programs and concerned agencies relating 
to LMCSMEs in order to: 


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(a) promote an enabling business environment supported by appropriate 
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non-discriminatory policies and regulations, including the grant of 
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uniform and neutral incentives; 
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(b) strengthen, redefine and ensure the maximum participation of the 
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private sector in the economy, in line with the privatization of 
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government assets; and 
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(c) accelerate the evolution of effective consultative processes between 
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government agencies and their private sector constituencies, at 
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national and local levels to develop mechanisms for the evaluation, 
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review, and upgrading of policies, rules and regulations. 
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(a) To 
formulate 
a 
medium 
term 
inter-agency 
entrepreneurial 
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and projects; 
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and implementation; 
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(d) To encourage the participation of duly-accredited non-governmental 
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organizations’ in the formulation 
and 
implementation of the 
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(e) To conduct a performance review of all livelihood programs and 
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projects of all government agencies, departments, government 
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corporations and their subsidiaries, to determine whether livelihood 
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activities are rationalized within the defined framework, whether the 
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delivery of assistance is focused on the poor, the recommend to the 
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President the appropriate structural reforms; 
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SEC. 3. Enfrepinoy Developmenf Aufhorify. - The Authority shall have 
the following duties and responsibilities: 
development plan which will be updated every year; 
(b) To monitor and evaluate the implementation of all livelihood programs 
(c) To establish effective coordinating mechanisms for program planning 
comprehensive national livelihood development programs; 
(9 To provide aspiring entrepreneurs and other persons with reliable and 
up-to-date market information by the establishment of an integrated 


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mandates. 
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(b) To contract loans, indebtedness, credit and issue commercial papers 
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and bonds, in any local or convertible foreign currency from any 
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international financial institutions, foreign government entities, and 
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local or foreign private commercial banks or similar institutions under 
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terms and conditions prescribed by law, rules and regulations; 
and efficient information system on market opportunities, production 
technologies that will guide them in starting up new enterprises; and 
(9) To formulate basic policies, guidelines and implementing rules for the 
disposal or development of acquired or existing assets, of attached 
agencies which are not required for the accomplishment of their basic 
SEC. 5. Powers and Aufhorifies. - To carry out its objectives, the 
Authority is hereby vested with the following powers and authorities: 
(a) To enter into, make and perform and carry out contracts of every class 
and description which are necessary or incidental to the realization of 
its purposes with any person, firm or corporation, private or public, 
and with foreign government entities; 
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(c) To execute any deed of guarantee, mortgage, pledge, trust or 
assignment of any property for the purpose of financing the program 
and projects deemed vital for the early attainment of its goals and 
objectives ; 
(d) To acquire, own, hold, administer and lease real and personal 
properties, including agricultural land, property rights and interests 
and encumber, lease, mortgage, sell, alienate or otherwise dispose of 
the same at fair market value it may deem appropriate; 
(e) To receive any asset, grant or property, whether real or personal 
given by way of bequest, grant, donation, assistance, devise gift, 
purchase or lease either absolutely, or in trust from foreign and 
domestic sources, subject to such limitations as are provided for 


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under existing laws and regulations and to convey such assets, grants 
or property; 
(f) To invest and reinvest the same under this provision or deal with and 
expand its assets and income in such manner as will promote its 
objects. 
(9) To determine] fix and collect reasonable amounts to be charged as 
filing fees, inspection fees and other administrative or service fees 
necessary for the effective implementation of all the laws, rules and 
regulations and other legal issuances enforced by the Authority; 
(h) To sue and be sued; 
(i) To promulgate all rules and regulations necessary for the effective 
implementation of its mandate, duties, and responsibilities; and 
0) To exercise such powers and perform such acts as may be 
necessary, useful, incidental or auxiliary to carry out the provisions of 
this Act. 
SEC. The Enfrepinoy Promofion and Development Board. - The 
mandate, objectives, responsibilities and powers vested in the Authority under 
the preceding sections shall be exercised by the Entrepinoy Promotion and 
Development Board, herein after referred to as the Board. The Board shall have 
fifteen (I 
5) members with the Secretary of the Department of Trade and Industry 
as Chairman and the Administrator of the Authority as Vice-chairman. The other 
members of the board shall be as follows: 
(a) Secretary of the DECS; 
(b) Secretary of the Department of Science and Technology; 
(c) Secretary of the NEDA; 
(d) Chairman of the Board of the Development Bank of the Philippines; 
(e) Chairman of the Board of the Land Bank of the Philippines; 
(9 Secretary of the Department of Finance; 
(9) Secretary of the Department of Labor and Employment; 


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(h) Secretary of the Department of Agriculture; 
(i) Secretary of the Department of Environment and Natural Resources; 
(j) Secretary of the Department of Interior and Local Government; 
(k) Three (3) Representatives from the private sector, each one 
representing Luzon, Visayas and Mindanao, respectively, to be 
nominated from among accredited associations, and appointed by the 
President of the Philippines, upon the recommendation of the 
Secretary of the Department of Trade and Industry. 
SEC. 7. Dissolution of Exisfing Agencies. - The following agencies are 
hereby abolished or dissolved and its powers and functions are hereby 
transferred to the Authority, any provision of law or their respective charters to 
the contrary notwithstanding: 
(a) Small and medium Enterprise Development Council; 
(b) Bureau of Small and Medium Business Development of the DTI; 
(c) Entrepreneurial Development Services Department of the DTI; 
(d) Cottage Industry Technology Center of the DTI. 
The Authority shall, by virtue of this Act, succeed to all rights and assume 
all the liabilities of the attached agencies, and all funds, records, property, 
assets, equipment, and such personnel as necessary, including unexpended 
appropriations andlor allocations. All contracts and liabilities of the said officers 
are hereby transferred to an assumed by the Authority and shall be acted upon 
in accordance with the Auditing Code of the Philippines and other pertinent 
laws, rules and regulations. Provided, That the officers and employees of the 
said office shall continue on a hold-over capacity until such time as the new 
officers and employees of the Authority shall have been duly appointed pursuant 
to the provisions of this Act. 
SEC. 8. Supervision over Existing Agencies. - The Authority shall 
exercise control and supervision for the purpose of policy and program 


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coordination and integration over the following agencies, any provision of the 
law or their respective charters to the contrary notwithstanding: 
(a) Philippine Trade and Training Center of the DTI; 
(b) Product Development and Design Center of the Philippines of the DTI; 
(c) Small Business Guarantee Fund Corporation of the DTI; 
(d) Technology and Livelihood Resource Center; 
(e) Guarantee Fund for Small and Medium Enterprises; 
(9 The Livelihood Corporation; 
(9) Technology Application and Promotion Institute of the Department of 
Science and Technology (DOST). 
Any provision of law to the contrary notwithstanding, the Secretary of the 
Department of Trade and Industry is designated as Chairman and the 
Administrator as Vice-chairman of the governing board of the controlled and 
supervised agencies and corporations. 
SEC. 9. Confinuing Rafionalizafion. - The Secretary of Trade and 
Industry may recommend to the President and Congress other projects, 
agencies and bureaus belonging to other Departments to be integrated under 
the Authority should there be rational justification for purposes of economy and 
effectiveness in pursuit of common objectives of Entrepinoy and Livelihood 
promotion and development. 
SEC. I O .  Powers and Dufies offhe Adminisfrator. - The Administrator 
shall be the Chief Executive of the Authority who shall be appointed by the 
President of the Philippines upon the recommendation of the Secretary of the 
DTI with the rank of Undersecretary. The Administrator shall be a person 
experienced in the technical and administrative fields related to the objectives of 
this Act. 
The Administrator shall among others, execute and administer the 
policies and resolutions approved by the Board. The Administrator shall direct 
and supervise the administration of the Authority. The office of the Administrator 


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shall consist of the Administrator, Program or Project Directors and their 
immediate staff. 
SEC. I I. Senior Officers. - The senior officers of the Authority shall 
consist of five (5) Directors who shall oversee the operational activities of the 
Authority. The Directors shall be as follows: 
(a) Information, Publications, and Training Director 
(b) Technology Director 
(c) Finance Access Director 
(d) Community Livelihood Centers and Livelihood Estates Director 
(e) Market Access and Promotions Director 
The Administrator shall be assisted by two (2) Assistant Directors one of 
whom shall be responsible for policy, planning and monitoring and the other for 
the staff support services. The reporting procedures to be followed by them shall 
be determined by the Administrator. 
SEC. '12, Regional Offices. - There shall be established as many 
regional officers as are necessary and consistent with the requirements of 
economy and efficiency: Provided, That they are established in accordance with 
the regional pattern as prescribed by the existing laws. 
A regional office shall have, with its administrative region, the following 
functions: 
(a) To implement rules and regulations, policies, plans, programs and 
projects of the Authority; 
(b) To provide efficient and effective services to LMCSMEs; 
(c) To establish Community Livelihood Centers, Livelihood Estates for 
Small Enterprises; Common Service Facilities; and such other 
facilities as the Authority may prescribe; 
(d) To identify and promote Industrial Districts - viable agglomerations of 
related industries with forward and backward linkage and supported 
by productive specialization among related manufacturers as 


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determined by market, raw materials, costs, infrastructure skills and 
technology. 
(e) To coordinate with regional officers of other Departments, Offices and 
agencies in the region; 
(9 To advocate programs promoting LMCSMEs in the Regional 
Development 
Council and 
develop 
LGU 
capabilities 
in 
its 
development and finance; and 
(9) To perform such other functions as may be provided by resolutions, 
rules and regulations, policies, plans, programs and projects adopted 
by the Board. 
SEC. 13. Organizational Framework. - The organization framework and 
staffing pattern of the Authority shall be approved by the President of the 
Philippines upon the recommendation of the Secretary of Trade and Industry 
within sixty (60) days after the effectivity of this Act and the authorized positions 
created therein shall be filled by regular appointments by the President or the 
Administrator as the case may be: Provided, That in the filling of positions 
created, preferences shall be given to the personnel of the abolished or 
dissolved agencies: Provided, further, That such individuals are, by 
demonstrated ability, background, training or experience, especially qualified to 
assess fairly the needs and concerns of all interests affected by the policies and 
objectives enunciated under this Act. 
SEC. 14. Development Plan. - Within ninety (90) days after the 
institution of the Authority, it shall with the assistance of appropriate government 
agencies and private entities, formulate and implement a comprehensive 
Development Plan for Entrepinoys and LMCSMEs; Provided, That they conduct 
investigations, studies, and researches prior to the formulation of such plan; 
The Administrator shall submit such comprehensive Development Plan 
for the approval of the President and/or the Congress of the Republic of the 
Philippines after ninety (90) days from his appointment which shall detail the 


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overall manner by which the attached agencies shall be reorganized, the 
objectives they will pursue under the mandate of the Authority, the agencies that 
will be dissolved, merged, restructured; the programs, projects and agencies, 
government corporations that will be transferred from other National 
Government Departments and attached to the Authority along with assets, 
personnel and budget appropriations, which should properly be under the 
Authority for purposes of rationalization, and to achieve a greater efficiency and 
effectiveness 
in the pursuit of its mandate to promote an develop 
entrepreneurship and creation and expansion of LMCSMEs. 
SEC. 15. Compensation Package. - The Authority shall prescribe the 
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compensation and position classification policies for attached agencies, in 
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coordination with the Civil Service Commission and the Department of Budget 
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and Management, pursuant to the compensation standardization provision of 
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the Constitution and implementing laws. 
SEC. 16. Appropriafions. - In the implementation of this Act, the initial 
appropriation shall be that amount appropriated for the abolished shall be that 
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amount appropriated for the abolished, dissolved, controlled and supervised 
agencies and such other amounts as the President may allocate from other 
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sources. Thereafter, such sums as may be needed for the operations and 
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maintenance of the Authority shall be included in the Annual General 
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Appropriations Act. 
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SEC. 17. Disclosure of business hferests. - Before assumption to the 
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office, the Administrator, the Directors and the Assistant Directors shall submit 
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to the Civil Service Commission a list of all companies, partnerships or business 
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enterprises, including non-profit organizations, with which they have any form of 
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financial interest or employment relationship. Such interests and employment 
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held by the heads of the Authority shall be immediately terminated upon 
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assumption of office. 


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Within thirty (30) days thereafter, complete divestment of financial 
interests in any institution, firm or company which fall under the supervisory or 
regulatory jurisdiction of the Authority shall be made; Provided, however, That in 
cases where ‘confirmation of appointments by the Commission on Appointments 
is required, the divestment mandated herein shall be complied with within thirty 
(30) days after such confirmation. 
SEC. 18. Separabi/ify Clause. - The provision of this Act shall be held 
invalid or unconstitutional, the remainder of this Act not otherwise affected shall 
remain in full force and effect. 
SEC. 19. Repealing Clause. - All laws, executive orders, issuance, 
rules and regulations or parts thereof inconsistent herewith are hereby repealed 
or modified accordingly. 
SEC. 20. Effecfivify. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in at least two (2) national newspapers of 
general circulation 
Approved,