TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
s. NO. 765
25 JIJL 29 P2;13
RKEIVLD
Introduced by Senator Bam Aquino
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 SUPPORT, BENEFITS AND APPROPRIATIONS THEREFOR
EXPLANATORY NOTE
Social enterprises play a critical role in addressing poverty and inequality in the 
Philippines. These mission-driven businesses combine the power of markets with the 
principles of social justice, investing in the poor not just as beneficiaries, but as 
partners, workers, suppliers, and entrepreneurs.
During my first term in the Senate, we filed the Poverty Reduction through 
Social Entrepreneurship (PRESENT) bill to create an enabling environment for these 
enterprises to grow and scale their impact. We worked hand-in-hand with the 
PRESENT Coalition and a broad community of social innovators and inclusive 
businesses who believe that economic development should leave no one behind.
Today, we refile this measure to continue that advocacy, to lift up enterprises 
that uplift others.
The bill recognizes social enterprises as key partners in poverty reduction and 
national development. It seeks to provide these enterprises with clear legal 
recognition, targeted incentives, access to government programs, and support for 
capacity-building, financing, and market access.
At the heart of this proposal is the belief that economic systems must work for 
the many, not just the few, and that social entrepreneurship can build inclusive and 
sustainable solutions to our most pressing challenges, especially in rural communities, 
conflict-affected areas, and marginalized sectors such as farmers, fisherfolk, informal 
workers, women, and persons with disabilities.
%


We propose this measure not just to support the enterprises that do good, but 
to create an economy that is, by design, inclusive, just, and people-centered.
In view of the foregoing, the passage of this bill is earnestly sought.
\M


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL 29 P2:13
SENATE
s. No. 765
RtCEl .
Introduced by Senator Bam Aquino
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 SUPPORT, BENEFITS AND APPROPRIATIONS THEREFOR
CHAPTER I
GENERAL PROVISIONS
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
Section 1. Short Title. -TTiis Act shall be known as the "Poverty Reduction
2 
through Social Entrepreneurship (PRESENT) Act"
3 
Sec. 2. Statement of Policy. - As provided in the Constitution of the Republic
4 
of the Philippines, it is the declared policy of the State to promote a just and dynamic
5 
social order that will ensure the prosperity and independence of the nation and free
6 
the people from poverty through policies that provide adequate social services,
7 
promote full employment, a rising standard of living, and an improved quality of life
8 
for all. In Article II, Sections 10 and 11, it is further declared that the State shall
9 
provide social justice in all phases of national development and that the State values
10 
the dignity of every human person and guarantees full respect for human rights.
11 
In Article XII, Section 1, it is further stated that the goals of the national economy are
12 
a more equitable distribution of opportunities, income, and wealth; a sustained
13 
increase in the amount of goods and services produced by the nation for the benefit


1 
of the people; and an expanding productivity as the key to raising the quality of life
2 
for all, especially the underprivileged.
3 
The State shall promote industrialization and full employment based on sound
4 
agricultural development and agrarian reform, through industries that make full and
5 
efficient use of human and natural resources, and which are competitive in both
6 
domestic and foreign markets. However, the State shall protect Rlipino enterprises
7 
against unfair foreign competition and trade practices.
8
9 The State also recognizes the important role of enterprises in the economy as the
10 
major agent of development, creating off-farm employment opportunities and
11 
providing transitional means for Improving people's livelihoods.
12 
Toward this end, the State shall pursue a poverty reduction program that promotes
13 
an environment conducive to the development and growth of a vibrant social
14 
enterprise sector engaged in poverty reduction, and economic and social development.
15 
It shall empower the marginalized sectors as primary stakeholders in social
16 
enterprises, establish mechanisms essential to realizing their potential and achieving
17 
their full growth, and extend the assistance necessary for their advancement. The
18 
State shall likewise ensure that the provision for technical and financial assistance,
19 
incentives and other services are free from any condition that might infringe upon the
20 
autonomy or organizational integrity of the social enterprises to enable them to
21 
develop Into viable and vital anti-poverty agents, and a strong social entrepreneurship
22 
movement which will be instrumental in reducing poverty in the country.
23 
The State, through the creation of an enabling policy environment for social
24 
enterprises, affirms its commitment to the Sustainable Development Goals (SDGs).
25 
Social enterprises shall form part of national and local development plans toward
26 
accelerating the achievement of the SDGs, especially the targets of zero poverty; no
27 
hunger; gender equality; decent work and inclusive economic growth; reducing
28 
inequalities; and sustainable production and consumption.


1 
The State shall pursue a low carbon development pathway, to which social enterprises
2 
engaged in renewable energy, environmental protection, circular economy, and other
3 
such activities, can contribute. This is consistent with the commitment of the State to
4 
its Nationally Determined Contribution (NDC) under the global Paris Climate
5 
Agreement, which it ratified in 2017.
6 
The State affirms the role of women in nation building and ensures the fundamental
7 
equality of men and women before the law. It shall promote empowerment of women
8 
and pursue equal opportunities for women and men and ensure equal access to
9 
resources and to development results and outcome. Further, as set out in Republic
10 
Act No. 9719, otherwise known as the "Magna Carta of Women Act of 2009," the State
11 
shall ensure the full integration of women's concerns in the mainstream of
12 
development, shall provide ample opportunities to enhance and develop their skills,
13 
acquire productive employment, and contribute to their families and communities to
14 
the fullest of their capabilities.
15 
Sec. 3. Definition of Terms. - As used in this Act:
16 
a. Sociai Enterprise (SE) shall primarily refer to a social mission-driven
17 
organization that creates wealth while contributing to social wellbeing and ecological
18 
sustainability. It can take the form of non-stock, non-profit corporations including
19 
NGOs, POs, Foundations, Associations; cooperatives; and sole proprietorships,
20 
partnerships, and stock corporations.
21 
A social enterprise, for purposes of this Act, shall also refer to a Social Enterprise
22 
with the Marginalized as Primary Stakeholders (SEMPS). A SEMPS is a social enterprise
23 
that explicitly declares and pursues poverty reduction or improving the quality of life
24 
of specific segments of the marginalized and vulnerable sectors as its principal
25 
objective. A SEMPS engages and invests in the poor to become effective workers,
26 
suppliers, clients and/or owners, and ensures that a substantive part of the wealth
27 
created by the enterprise is distributed to them. This includes efforts to help workers
28 
in the informal sector transition to be stakeholders of the formal economy. In addition
29 
to reinvesting its surplus or profits back toward the fulfillment of its social mission in


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a sustainable way, a SEMPS 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. Assets shall refer to all kinds of properties, real or personal, owned by the 
social entrepreneur as defined in paragraph {ff) 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;
c. Capability building shall refer to the process of enhancing the viability and 
sustainability of SEMPS. It pertains to 1) education, training, coaching and other 
learning events such as, but not limited to, study tours; 2) technical, consultancy and 
advisory services; 3) assistance in organizational systems development; 4) technology 
incubation, development and dissemination; 5) value chain and subsector 
development; 6) conduct of SE trade fairs and missions; 7) 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 18 of this 
Act;
d. Civil society organizations shall refer to private, voluntary, and non-profit 
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;
e. Council shall refer to the SE Council;


1 
f. (Operative shall refer to an autonomous and duly registered association of
2 
persons, with a common bond of interest, who have voluntarily joined together to
3 
achieve their social, economic, and cultural needs and aspirations by making equitable
4 
contributions to the capital required, patronizing their products and services and
5 
accepting a feir share of the risks and benefits of the undertaking In accordance with
6 
universally accepted cooperative principles as defined in R.A. 6938, as amended by
7 
R.A. 9520, otherwise known as the "Philippine Cooperative Code of 2008";
8 
g. Economic subsectors shall refer to networks of related actors and enterprises
9 
performing various functions in value chains. These actors and enterprises transform
10 
raw materials into finished products, or develop services, and distribute or provide
11 
them through market channels to final consumers; they may be identified by key raw
12 
material source, by finished product or final service provided. An economic subsector
13 
may be comprised of several competing value chains. By understanding the dynamics
14 
of economic subsectors and using them as units of planning social entrepreneurship
15 
Interventions, government agencies, support institutions and SEs shall more effectively
16 
reach and benefit a greater number of poor in poverty reduction programs;
17 
h. Empowerment strategy shall refer to a development strategy that enables
18 
the marginalized sectors to own, manage, and control SEs in order for them to reap
19 
maximum benefits from it and which acts as a channel for directly distributing income;
20 
i. Fair trade shaW refer to a trading partnership based on dialogue, transparency
21 
and respect and which seeks greater equity in international trade and the
22 
transformation and adaptation of trading structures and practices in favor of the poor
23 
and disadvantaged by offering better trading conditions to, and securing the rights of,
24 
marginalized producers and workers;
25 
j. Fair trade organizations shall refer to enterprises certified by internationally-
26 
and nationally- recognized Fair Trade networks;
27 
k. Fair trade principles shall refer to the values adopted by fair trade
28 
organizations In their day-to-day operation. These include creating opportunities for
29 
economically- disadvantaged producers; transparency and accountability; payment of


1 
a fair price; ensuring no child labor and forced labor; commitment to non-
2 
discrimination, gender equity and freedom of association; ensuring good working
3 
conditions; providing capacity building; and, respect for the environment;
4 
/. Foundation shall refer to the categorization of a non-profit organization duly
5 
registered that typically either donates funds and support to other organizations or
6 
provides the source of funding for its own charitable purposes. Unlike a company,
7 
foundations have no shareholders though they may have a board, an assembly and
8 
voting members. A foundation may hold assets in its own name for the purposes set
9 
out in its constitutive documents, and its administration and operation are carried out
10 
in accordance with its statutes or articles of association rather than fiduciary principles;
11 
m. Gender Analysis shall refer to a systematic analytical process based on sex-
12 
disaggregated and gender information. This process is used to identify, understand,
13 
and describe gender differences and the relevance of gender roles and power
14 
dynamics in a particular context;
15 
n. Gender and Development or GAD shall refer to the development perspective
16 
and process that are participatory and empowering, equitable, sustainable, free from
17 
violence, respectful of human rights, and supportive of self-determination and
18 
actualization of human potentials. It seeks to achieve gender equality as a
19 
fundamental value that should be reflected in development choices; seeks to transform
20 
society's social, economic and political structures and questions the validity of the
21 
gender roles they ascribed to women and men; contends that women are active
22 
agents of development and not just passive recipients of development assistance; and
23 
stresses the need of women to organize themselves and participate in political
24 
processes to strengthen their legal rights;
25 
o. Gender Mainstreaming shall refer to the strategy for making women's as well
26 
as men's concerns and experiences an integral dimension of the design,
27 
implementation, monitoring, and evaluation of policies, programs and projects in all
28 
social, political, civil, and economic spheres so that women and men benefit equally.
29 
It is the process of assessing the implications for women and men of any planned
30 
action, including legislation, policies or programs in all areas and at all levels;


1 
p. Hybrid financing shall refer to the combination of grants with loans and other
2 
financial instruments to support the unique nature of SEs as wealth creating
3 
organizations that pursue social missions to improve societal wellbeing - in ways that
4 
are ecologically and financially sustainable;
5 
q. Intermediation strategy shaW refer to a development strategy that provides
6 
financial, agricultural, business development and institutional development services to
7 
the entrepreneurial poor and employers of the poor and provides product development
8 
and marketing support using the principles of fair trade to marginalized producers. A
9 
SE engaged in intermediation strategy need not be owned by the marginalized
10 
stakeholders but provide immediate access to services among a critical mass of these
11 
marginalized stakeholders;
12 
r. Marginalized shall refer to basic sectors and disadvantaged or vulnerable
13 
persons or groups who are mostly living in poverty and have little to no access to:
14 
land and other resources; basic social and economic services, such as health care,
15 
education, water and sanitation, employment and livelihood opportunities, housing,
16 
social security, physical infrastructure; and the justice system.
17 
As defined in Republic Act (RA) No. 9710, otherwise known as the "Magna Carta
18 
of Women of 2009," these include, but are not limited to, the following sectors, groups,
19 
and persons:
20 
(1) "Small Farmers and Rural Workers" refers to those who are engaged directly
21 
or indirectly in small farms and forest areas, workers in commercial farms and
22 
plantations, whether paid or unpaid, regular or season-bound. These shall include, but
23 
are not limited to, (a) small farmers who own or are still amortizing for lands that is
24 
not more than three (3) hectares, tenants, leaseholders, and stewards; and (b) rural
25 
workers who are either wage earners, self-employed, unpaid family workers directly
26 
and personally engaged in agriculture, small-scale mining, handicrafts, and other
27 
related farm and off-farm activities;
28 
(2) "Fisherfolk" refers to those directly or indirectly engaged in taking, culturing,
29 
or processing fishery or aquatic resources. These include, but are not to be limited to.


1 
women engaged In fishing in municipal waters, coastal and marine areas, women
2 
workers in commercial fishing and aquaculture, vendors and processors of fish and
3 
coastal products, and subsistence producers such as shell-gatherers, managers, and
4 
producers of mangrove resources, and other related producers;
5 
(3) "Urban Poor" refers to those residing in urban and urbanizable slum or
6 
blighted areas, with or without the benefit of security of abode, where the income of
7 
the head of the family cannot afford in a sustained manner to provide for the family's
8 
basic needs of food, health, education, housing, and other essentials in life;
9 
(4) "Workers in the Formal Economy" refers to those who are employed by any
10 
person acting directly or indirectly in the interest of an employer in relation to an
11 
employee and shall include the government and all its branches, subdivisions, and
12 
instrumentalities, all government-owned and -controlled corporations and institutions,
13 
as well as nonprofit private institutions or organizations;
14 
(5) "Workers in the Informal Economy" refers to self-employed, occasionally or
15 
personally hired, subcontracted, paid and unpaid family workers in household
16 
incorporated and unincorporated enterprises, including home workers, micro-
17 
entrepreneurs and producers, and operators of sari-sari stores and all other categories
18 
who suffer from violation of workers' rights;
19 
(6) "Migrant Workers" refers to Rlipinos who are to be engaged, are engaged,
20 
or have been engaged in a remunerated activity in a State of which they are not legal
21 
residents, whether documented or undocumented;
22 
(7) "Indigenous Peoples" refers to a group of people or homogenous societies
23 
identified by self-ascription and ascription by other, who have continuously lived as
24 
organized community on communally bounded and defined territory, and who have,
25 
under claims of ownership since time immemorial, occupied, possessed customs,
26 
tradition, and other distinctive cultural traits, or who have, through resistance to
27 
political, social, and cultural inroads of colonization, non-indigenous religions and
28 
culture, became historically differentiated from the majority of Filipinos. They shall
29 
likewise include peoples who are regarded as indigenous on account of their descent


1 
from the populations which inhabited the country, at the time of conquest or
2 
colonization, or at the time of inroads of non-indigenous religions and cultures, or the
3 
establishment of present state boundaries, who retain some or all of their own social,
4 
economic, cultural, and political institutions, but who may have been displaced from
5 
their traditional domains or who may have resettled outside their ancestral domains
6 
as defined under Section 3 (h). Chapter II of Republic Act No. 8371, otherwise known
7 
as "The Indigenous Peoples Rights Act of 1997" (IPRA of 1997);
8 
(8) "Children" refers to those who are below eighteen (18) years of age or over
9 
but are unable to fully take care of themselves or protect themselves from abuse,
10 
neglect, cruelty, exploitation, or discrimination because of a physical or mental
11 
disability or condition;
12 
(9) "Senior Citizens" refers to those sixty (60) years of age and above;
13 
(10) "Persons with Disabilities" refers to those who are suffering from restriction
14 
or different abilities, as a result of a mental, physical, or sensory impairment to perform
15 
an activity in the manner or within the range considered normal for a human being;
16 
and
17 
(11) "Solo Parents" refers to those who fall under the category of a solo parent
18 
defined under Republic Act No. 8972, otherwise known as the "Solo Parents Welfare
19 
Act of 2000".
20 
(12) Further, as defined in Republic Act No. 11054, otherwise known as the
21 
"Bangsamoro Organic Act of 2018," marginalized groups shall include "Bangsamoro
22 
People," to wit:
23 
(13) "Bangsamoro People" shall refer to those who, at the advent of the Spanish
24 
colonization, were considered natives or original inhabitants of Mindanao and the Sulu
25 
archipelago and its adjacent islands, whether of mixed or full blood, shall have the
26 
right identity themselves, their spouses and descendants, as Bangsamoro.
27 
(14) Further, as articulated in Republic Act. No. 9710, or the Magna Carta of
28 
Women of 2009, marginalized groups shall include women in all aforementioned


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sectors or groups.
5. 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;
t 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); and inclusion (assistive device/technology, personal assistance, sign 
language interpreter, accessibility);
u. Non-Government Organization or NGO shall refer 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, and other similar activities and, as defined under Section 34 
(H)(2)(c) 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;
V. People's Organization or A7 shall refer 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;
w. Persons with Disability or PWD 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;
28 
X. Poor shall refer to individuals and families whose income fall below the
29 
poverty threshold as defined by the National Economic and Development Authority
10


1 
and/or are deprived of the means to provide in a sustained manner their minimum
2 
basic needs of food, health, education, housing and other essential amenities of life,
3 
as defined under R.A. 8425; it may also be the state of deprivation - such as poor
4 
health, lack of education, inadequate living standard, lack of income (as one of several
5 
factors considered), disempowerment, poor quality of work and threat from violence.
6 
/. Poverty reduction/alleviation shall refer to overcoming the income, resource,
7 
and capability deprivation among the poor as defined in the preceding paragraph and
8 
the marginalized sectors as defined in paragraph (r) hereof;
9 
z. Private Enterprise shall refer to an organization engaged in a business activity
10 
organized for the purpose of accumulating profit and whose primary stakeholders and
11 
beneficiaries are its owners;
12 
aa. Procuring Entity shall refer to any branch, department, office, agency, or
13 
instrumentality of the government, including state universities and colleges,
14 
government-owned and/or - controlled corporations, government financial institutions,
15 
and local government units procuring Goods, Consulting Services and Infrastructure
16 
Projects;
17 
bb. Resource mobiiization strategy shall refer to a development strategy
18 
intended to generate income from the sale of products and services of a SE in order
19 
to finance or subsidize the operations of its core development program or development
20 
interventions among the marginalized sectors;
21 
cc. SEGFP shaW refer to the SE Guarantee Fund Pool created under this Act;
22 
dd. Sociai deveiopment shall refer to the continuing process of addressing the
23 
needs of society, beginning with the people's minimum basic needs, through a
24 
systematic implementation of socioeconomic programs or packages;
25 
ee. Sociai Enterprise Resource Institution shall refer to an organization that
26 
provides financial and/or other forms of assistance to social enterprises for them to
27 
become viable and sustainable including but not limited to trainings, education and
28 
other capacity-building measures, research and development, advocacy and other
11


1 
support activities;
2 
ff. Social entrepreneur shall refer to an innovative individual or institution that
3 
promotes the creation and operationalization of enterprises or livelihood endeavors for
4 
those in need or which address social problems and improve societal wellbeing;
5 
gg. Social entrepreneurship entails innovations designed to explicitly improve
6 
societal wellbeing, housed within entrepreneurial organizations, which initiate, guide
7 
or contribute to change in society;
8 
hh. Social Inclusion strategy shaW refer to the development strategy that assists
9 
marginalized groups of people in society who, for reasons of poverty, geographical
10 
inaccessibility, culture, language, age, sex, gender, migrant status, disability or other
11 
disadvantage, have not benefited from health, education, employment and other
12 
opportunities, and who are relegated to the sidelines of political persuasion, social
13 
negotiation, and economic bargaining in order to restore their dignity by not only
14 
removing the barriers that limit their access to the delivery of basic social services and
15 
employment, but more importantly, by nurturing work and other environments that
16 
create avenues for their participation as productive members of society;
17 
a. Social Investors shall refer to individuals or institutions that choose to put in
18 
money to a business endeavor or activity not principally for financial profit but to fulfill
19 
a social mission which may Include poverty reduction, concern for environmental
20 
protection, strong organizational governance, and a desire for a more economically
21 
just world;
22 
jj. Social reform shall refer to the continuing process of addressing the basic
23 
inequities in society through a systematic, unified and coordinated delivery of
24 
socioeconomic programs or packages;
25 
kk. Social value shall refer to the additional benefit to society of procuring a
26 
good or service, over and above the direct benefit and value of the good or service to
27 
the procuring entity. Additional benefits may include support for poor communities or
28 
marginalized groups, advancement of human rights and social justice, protection of
29 
the environment, and community development.
12


1 
//, Transactional services shall refer to enterprise related assistance to the poor
2 
that involve an exchange of goods or services for money including being workers,
3 
suppliers, or clients;
4 
mm. Transformational sen/ices shall refer to the assistance to the poor as
5 
conscious agents of change to lift their own selves from poverty and to participate in
6 
group efforts to improve the quality of life of their community, sector or society as a
7 
whole. This shall include building the leadership and management capacity and role
8 
of the poor in social enterprises;
9 
nn. Value chain shall refer to value-adding economic activities that an enterprise
10 
is interlinked with in the process of producing goods and/or services to serve its chosen
11 
market. A value chain typically consists of: 1) inbound distribution or logistics, 2)
12 
manufacturing operations, 3) outbound distribution or logistics, 4) marketing and
13 
selling, and 5) after-sales service. These activities are supported by 6) purchasing or
14 
procurement, 7) research and development, 8) human resource development, and 9)
15 
organizational development. A SE that understands and manages its value chain
16 
improves its capability to create economic, environmental and social values toward
17 
improving the position and benefits of the poor in the value chain and toward ensuring
18 
the viability and sustainability of the enterprise.
19 
00. Vulnerable sectors shall refer to groups who are at-risk of any potential
20 
event, loss or danger.
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CHAPTER II
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE
Sec. 4. Social Enterprise (SE) General Concept and Coverage - A Social 
Enterprise (SE), for purposes of this Act, refers to a Social Enterprise with the 
Marginalized as Primary Stakeholders (SEMPS) as defined in Sec. 3 (a) of this Act.
An SE employs any of the following development strategies in the pursuit of its social 
mission: 1) empowerment strategy; 2) social inclusion strategy; 3) intermediation 
strategy; and 4) resource mobilization strategy.
13


1 
In the case of social enterprises organized as stock corporations, partnerships, or sole
2 
proprietorships, these social enterprises should invest at least 60% of their net
3 
revenues to sustain the fulfillment of their social mission and provide transformational
4 
services for the wellbeing of the marginalized sector they serve. They must not be a
5 
branch, subsidiary or division of a private business enterprise, regardless of the size
6 
of such private business enterprise, nor may its policies be determined by a private
7 
business enterprise. Provided, that this shall not preclude an SE from accepting
8 
subcontracts from large private business enterprises or firms or from joining in
9 
cooperative or joint-venture activities with other SEs or foundations.
10 
Sec. 5. Qualifications for Benefits and Incentives. - To qualify for the benefits
11 
and incentives provided for in this Act, the SE shall:
12 
(a) Provide or facilitate the provision of a combination of transactional and/or
13 
transformational services to improve the position and benefits derived by the poor
14 
from the SE and the value chain or economic subsector where the SE is located,
15 
including becoming worker-owners, supplier-owners, supervisors and managers,
16 
active members and leaders in governing bodies of the SE or its allied organizations;
17 
(b) Invest a substantive part of its surplus, profits or mobilize other resources
18 
to assist the poor to become partners in SE or value chain management/governance
19 
and/or to become partners in community, sectoral and societal transformation;
20 
(c) Pursue a pro-active contribution to resolving social and environmental
21 
problems and generate profit or surplus with due regard to social and environmental
22 
costs;
23 
(d) Be engaged in an economic activity within the sectors of agriculture and
24 
fisheries, industry and services which, for purposes of this Act, shall refer to an activity
25 
in any of the economic subsectors;
26 
(e) Distribute a substantive part of the wealth created by the enterprise to the
27 
poor in the form of services, dividends and other forms of benefits, and payments and
28 
incentives for products or services rendered consistent with the principles of fair trade;
29 
and
14


1
2
3
4
5
6
7
8 
9
10
11
12
(f) Be duly registered with the appropriate agencies as provided under Republic 
Act No. 11232, or the "Revised Corporation Code of 2018;" Republic Act No. 9520, or 
the "Revised the Cooperative Code of the Philippines of 2009;" Republic Act No. 9501, 
or the "Magna Carta for Micro, Small and Medium Enterprises of 2008;" Republic Act 
No. 9178, or the Barangay Micro Business Enterprises Act of 2002;" Republic Act No. 
10693, or the "Microfinance NGOs' Act of 2015;" and other relevant laws.
Social enterprise resource institutions may also avail of support from 
government as partners for building the capability and sustainability as well as 
developing an enabling environment for social enterprises to flourish, provided they 
have:
(a) a registration as a legal entity in the Philippines
(b) a dedicated program supporting social enterprises
13 
(c) a track record of at least three (3) years of implementation of a dedicated
14 
SE program
15 
(d) at least three (3) qualified social enterprises vouching for their them.
16 
International social enterprise resource institutions and their subsidiaries operating in
17 
the Philippines must partner with a qualified local social enterprise resource institution
18 
to avail of government support.
19 
Financial sustainability shall not be a prerequisite for the availment of incentives and
20 
benefits under this Act. Provided that, social enterprises that have not achieved
21 
financial sustainability may be eligible to avail of the services, assistance and incentives
22 
set forth in this Act by presenting a workable strategy to achieve financial sustainability
23 
over a reasonable period.
24 
Sec. 6. Formulation of a Poverty Reduction through Social Entrepreneurship
25 
(PRESENT) Program. - To promote the development of a SE sector with the
26 
marginalized sectors as primary stakeholders, a comprehensive and fully-integrated
27 
Poverty Reduction Through Social Entrepreneurship (PRESENT) Program shall be
28 
formulated, guided by the following principles:
15


1 
(a) Incorporating the PRESENT Program in the government's poverty reduction
2 
drive as a major sustainable and comprehensive strategy;
3 
(b) Rationalizing poverty reduction programs by streamlining and coordinating
4 
the various anti-poverty programs of the government to reduce inefficiency and
5 
duplication and to improve the effectiveness of each program;
6 
(c) Ensuring people's participation, access to information, and empowerment
7 
by mobilizing civil society organizations and social movement groups working with the
8 
poor;
9 
(d) Promoting sustainable programs that reduce inequality in incomes across
10 
economic sectors and increase self-reliance among the poor;
11 
(e) Enabling SEs to overcome constraints and to take advantage of
12 
opportunities for enhancing the position and benefits of the poor in economic
13 
subsectors and value chains;
14 
(f) Recognizing women and men as equal partners in development and nation
15 
building and ensuring women's and men's equal rights and access to SE's resources,
16 
gender shall be mainstreamed In the program formulation; and
17 
(g) Developing sustainable mechanisms for the provision of quality and
18 
accessible social services to the poor.
19
20 
21 
22
23
24
25
26 
27
The planning framework of the PRESENT Program and its planning process shall 
ensure that the marginalized sectors are engaged as primary stakeholders. It shall add 
value and complement ecosystem-based, area-based, community-based, etc. 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 SEMPS and resource institutions 
as partners in strategic economic subsectors that have the potential for growth and 
where large numbers of the poor are concentrated. SEMPs shall be developed as
16


1 
vehicles to ensure that the marginalized sectors benefit the most from sustainable
2 
subsector development.
3 
PRESENT medium-term and annual development plans shall be formulated in
4 
synchrony with the medium-term development plan of the national government.
5 
Sec. 7. Lead Agency. -The Department of Trade and Industry (DTI) shall serve
6 
as the central planning, coordinating, implementing and monitoring body of the
7 
program.
8
12
21
22
23
24
In the implementation of this Act, the DTI shall perform the following functions:
9 
(a) Work in close coordination with the Department of Social Welfare and
10 
Development (DWSD) and the Department of Agriculture (DA) in targeting the
11 
different sectors intended to be benefitted by the program;
(b) Disseminate the information relating to the program;
13 
(c) Assist the Social Enterprise Development Council in calling upon the
14 
Departments and Agencies in fulfilling the objectives of this Act;
15 
(d) Recommend to the SEDC measures and policies for the responsive delivery
16 
of the commitments under this Act;
17 
(e) Provide seminar-workshops and training programs to educate the target
18 
sectors about the conditions and other actions pertinent to this Act;
19 
(f) Perform such other functions as may be necessary or incidental to the proper
20 
implementation of this Act.
Sec. 8. 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
17


1 
of Trade and Industry (DTI). It shall be the primary agency tasked to carry out the
2 
promotion, growth and development of SEMPs in the country,
3 
Given the complexities of a social enterprise and its constituents, the Council
4 
shall be composed of the following:
5 
(a) Secretary of Trade and Industry, as chairperson
6 
(b) Secretary of Agriculture, as co-chairperson
7 
(c) Secretary of Social Welfare and Development, as vice chairperson
8 
(d) SE sector head representative, as co-vice chairperson
9 
(e) Lead Convener of the National Anti-Poverty Commission
10 
(f) Director-General of the National Economic Planning and Development
11 
Agency
12
13
14
15
16
17
18
19
20
21
22
(g) Vice Chair for Basic Sectors of the National Anti-Poverty Commission
(h) Secretary of the Interior and Local Government
(i) Secretary of Finance
(]■) Governor of the Bangko Sentral ng Pilipinas
(k) Secretary of Environment and Natural Resources
(l) Secretary of Agrarian Reform
(m) Secretary of Science and Technology
(n) Secretary of Labor and Employment
(o) Secretary of Education
(p) Secretary of Transportation
(q) Secretary of Information and Communications Technology
18


1 
(r) Chairperson of the Commission on Higher Education
2 
(s) Chairperson of the Cooperative Development Authority
3 
(t) Chairperson of the Securities and Exchange Commission
4 
(u) Chairperson of the Philippine Commission on Women
5 
(v) Director-General of the Technical Education and Skills Development
6 
Authority
7 
(w) Nine (9) representatives from SEMPS, with three (3) representatives each
8 
from the main island groupings of Luzon, Visayas, and Mindanao, where at least one
9 
of the three representatives from each island grouping shall be a woman.
10 
Sec. 9. Powers and Functions. - The Council shall have the following powers
11 
and functions:
12 
(a) Formulate policies and plans to develop and promote, coordinate, synergize,
13 
integrate, and ensure compatibility and complementation of policies and programs for
14 
SEs as well as other anti-poverty reduction initiatives consistent with national
15 
development objectives.
16 
(b) Formulate policies and plans to ensure the resilience and preparedness of
17 
social enterprises for disaster risk reduction and management as well as develop
18 
capacities of social enterprises to respond, recover and build back better in the face
19 
disasters and pandemics.
20 
(c) Issue certificate of qualification upon determination that the criteria set for
21 
this purpose have been fully satisfied: Provided, IhdX. the certificate of qualification
22 
shall be valid only for such period as may be prescribed under the implementing rules
23 
and regulations of this Act;
24 
(d) Oversee the successful implementation of the PRESENT Program and other
25 
SE programs;
26
(e) Identify and access sources of financing to expand the SE sector;
19


1 
(f) Monitor and evaluate the performance of programs and projects for
2 
appropriate incentives;
3 
(g) Call upon any government agency to carry out and implement programs
4 
and projects identified by the Council and to assist in clarifying issues and finding
5 
resolution to problems that concern their respective offices with respect to the
6 
implementation of the PRESENT Program enunciated under this Act or any
7 
development program for SEs.
8 
(h)Call upon people's organizations, non-government organizations, the
9 
academe and other sectors to provide advice on matters pertaining to SEs and conduct
10 
of transactional and transformational services to farmers, producers, workers,
11 
consumers and other stakeholders;
12 
(i) Submit annual and other periodic reports to the President and the Congress
13 
of the Philippines through the Congressional Oversight Committee;
14 
(j) Promulgate such rules and regulations and exercise such other powers and
15 
functions as may be necessary to carry out the purposes of this Act, including
16 
guidelines for the administration of grant windows provided for in Section 24;
17 
(k) Propose the concomitant plantilla positions and structure for the personnel
18 
under it;
19 
(I) Manage the funds provided for by this law, including ensuring the funds'
20 
growth where possible;
21 
(m) Put in place mechanisms for accountability to marginalized stakeholders
22 
being served
23 
(n) Align and synchronize the provision of support programs, benefits and
24 
incentives for SEs provided for in this Act; and
25 
(o) Perform such other functions as may be necessary for its effective
26 
operations and the continued enhancement, growth and development of the SE sector.
20


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28 
29
Sec. 10. Designation of Permanent Representatives to the Councii. - Within 30 
days from the effectivity of this Act, Cabinet-ranked ex-officio members of the Council 
shall designate a permanent representative to the council, to attend the meetings of 
the council in cases that the Cabinet-ranked ex officio members cannot personally 
attend such 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.
Sec. 11. Term and Appointment ofSE Sector Representatives. - Within 90 days, 
DTI as Chair shall convene members of the Council from the Philippine Government, 
as identified in Section 10, who shall in turn, confirm representatives of social 
enterprises and social enterprise resource institutions. Said SE and SE Resource 
Institution representatives must have been screened and pre-selected by the SE sector 
convened by DTI, DA, and DSWD, in consultation with established social enterprises 
and networks of SEs.
The islands of Luzon, Visayas, and Mindanao shall each have two (2) representatives 
who will be appointed for a term of three (3) years. While another three (3) 
representatives each representing Luzon, Visayas, and Mindanao shall be appointed 
for a term of two (2) years to ensure continuity. Upon the expiration of all the terms 
of these first set of officers, all terms of SE Sector Representatives shall be for three 
(3) years. No person shall be appointed to serve as an SE representative in the SEDC 
for more than a period of two (2) terms or more than six (6) years.
Any vacancy in the SEDC arising from the death, incapacity, resignation, or termination 
of the term of an appointed SE representative shall be filled up within 90 days from 
the occurrence of the said vacancy. All nominations to the vacancy shall be submitted 
within 60 days from the occurrence of such. This process should be consistent with 
the previous appointment process. In the case of a vacancy arising from death, 
incapacity or resignation, the representative appointed to the vacancy shall serve only 
for the remaining period of the term for the vacated office.
21


1 
Sec. 12. Secretariat. - There is hereby created a Secretariat headed by an
2 
Executive Director and two (2) Deputy Directors, and supported by staff, whose
3 
composition shall be determined by the SEDC, to serve as the national, technical and
4 
administrative secretariat of the Council with the member agencies providing
5 
additional support staff when the need arises. The Secretariat shall perform the
6 
following functions:
7 
(a) Provide administrative support to the Council, with the assistance of the
8 
National Economic and Development Authority secretariat in the formulation of the
9 
PRESENT development programs and plans;
10 
(b) Assist the Council in the implementation of the PRESENT development
11 
program and the annual and medium-term development plan;
12 
(c) Assist the council in the performance of its accreditation and screening
13 
function;
14 
(d) Assist the Council in monitoring the PRESENT development programs and
15 
the activities of the various concerned government agencies with respect to SEs;
16 
(e) Prepare, collate and integrate all necessary inputs to the Council's yearly
17 
report on the status of SEs in the country;
18 
(f) Submit periodic reports to the Council on the progress and accomplishment
19 
of its work programs; and
20 
(g) Perform other functions that may be assigned and authorized by the
21 
Council.
22
23
24
25
Sec. 13. Office. - The Council shall have its principal place of business within 
the DTI's premises or it may establish an office in Metro Manila. It may also establish 
such branches within the Philippines as may be deemed necessary by the President of 
the Philippines to carry out the powers and functions of the Council.
22


1 
Sec. 14. National Center for Social Enterprise Development - There shall be
2 
established a National Center for Social Enterprise Development (NCSED) under the
3 
Council which shall perform the following functions:
4 
(a) Provide SEMPs with capability-training and education through the Social
5 
Enterprise Capability Building and Sustainability Program created under Section 17 of
6 
this Act.
7 
(b) Develop and enhance a research and development system which shall equip
8 
every SE with innovative and sustainable approaches that ensures improvement in the
9 
access to basic social services by the poor pursuant to Section 18 of this Act;
10 
(c) Manage a Social Enterprise Marketing Assistance Program (SMAP) that will
11 
ensure the generation of the highest possible income for the SEs pursuant to Section
12 
19 of this Act.
13 
(d) Implement capability building projects approved by the Council;
14 
(e) Supervise capability- building projects approved by the Council implemented
15 
through reputable Social Enterprise Resource Institutions contracted for the purpose;
16 
and
17 
(f) Research on existing policies and programs of other countries for
18 
benchmarking purposes (e.g. support system, ecosystem, programs, regulations).
19 
The NCSED shall be headed by the Executive Director of the Council Secretariat. It
20 
shall maintain a multi-sectoral, multi-disciplinary pool of experts including those from
21 
the academe, practicing professionals, business and industry, youth, women and other
22 
concerned sectors, who shall be screened according to the qualifications set by the
23 
Council.
24 
The NCSED shall coordinate with the University of the Philippines Institute for Small
25 
Scale Industries (UP ISSI), the Technical Education and Skills Development Authority
26 
(TESDA), the Department of Transportation (DOTr), Department of Information and
27 
Communications Technology (DICT), the Philippine Commission on Women (PCW),
23


1 
civil society organizations, including women's organizations, and other relevant
2 
agencies, state universities and colleges in implementing its programs.
3 
Sec. 15. Personnel. - Subject to the civil service laws, rules and regulations,
4 
the Council is authorized to select, appoint, employ and fix the compensation of the
5 
officers and employees of the Secretariat and the NCSED as shall be necessary to carry
6 
out its functions.
7 
Sec. 16. Role of LGUs In SE Development - LGUs shall be enjoined to
8 
incorporate viable SE Development Plans in their local development planning and to
9 
collaborate with SEMPs. The Gender and Development (GAD) Fund of LGUs may be
10 
used toward the design and implementation of SE development plans at the local level.
11 
Grants from government agencies, such as the Department of Interior and Local
12 
Government (DILG), for civil society toward local development may also be used to
13 
support social enterprises.
14 
Sec. 17. Social Entrepreneurship Education in Schools. - Toward strategically
15 
developing the nation's human resource capability in social entrepreneurship, the
16 
Department of Education (DepEd) and the Commission on Higher Education (CHED)
17 
shall cause the integration of SE content and inclusion of SE courses in the curricula
18 
at all levels, especially in the secondary and tertiary levels. This shall be part of the
19 
SE Capability and Sustainability Program stated in this Act.
20 
A continuing social enterprise education program for out-of-school youth and adults
21 
shall likewise be developed and undertaken. The social entrepreneurship education
22 
program for primary and secondary education shall include information regarding:
23
24
25
(a) Social issues and civic ways of addressing them;
(b) The producer as a steward of natural resources;
(c) The consumer as a responsible member of society and their responsibility
24


1 
to develop critical awareness which is the responsibility to be alert and questioning
2 
about environmental and social impacts of the goods and services they use;
3 
(d) Social concern which is the responsibility to be aware of the impact of their
4 
consumption to society, especially to the disadvantaged;
5 
(e) Environmental awareness which is the responsibility to understand the
6 
consequences of their use of natural resources, consumption, recognizing their
7 
individual and social responsibility to conserve natural resources for future
8 
generations; and
9 
(f) Gender justice, or the full equality and equity between men and women in
10 
all spheres of life, resulting in women jointly, and on an equal basis with men, defining
11 
and shaping the policies, structures, and decisions that affect their lives and society
12 
as a whole.
13 
All higher learning institutions and vocational schools are mandated to include a
14 
subject on social entrepreneurship in their social studies program or in their business,
15 
commerce, or economics courses.
16 
CHAPTER III
17 
DEVELOPMENT OF SOCIAL ENTERPRISES
18 
Sec. 18. SE Capability Building and Sustainability Program; Creation of SE
19 
Development Fund. - There is hereby established a SE Capability Building and
20 
Sustainability Program whose primary objective is to guarantee the viability and
21 
sustainability of SEMPS through activities that advance, in general, both
22 
transformational services and transactional services. 
This program shall include
23 
training in social entrepreneurship development institutional strengthening, human
24 
resource competency and skills training, business planning and advisory services,
25 
upgrading of accounting and auditing systems, technical assistance for the installation
26 
or improvement of management information systems, technology intervention,
27 
technology incubation/commercialization, market studies, and product development
25


1 
competitiveness, business matching activities, trade fairs and missions, policy
2 
advocacy, gender and development, resiliency, and other related activities.
3 
The SE Capability Building and Sustainability Program shall likewise include the
4 
establishment of an insurance system for SEs affected by natural calamities in line
5 
with the National Framework Strategy on Climate Change 2010-2022 as provided for
6 
under Republic Act No. 9729, otherwise known as the "Climate Change Act of 2009,"
7 
and Republic Act No. 10121, otherwise known as the "Philippine Disaster Risk
8 
Reduction and Management Act of 2009."
9 
For this purpose, there is hereby created and established an SE Development Fund
10 
(SEDF) in the initial amount of Three Billion Pesos (P3,000,000,000.00) to be
11 
administered by the Council chargeable against the General Appropriations Act
12 
following the year of the effectivity of this Act. The SEDF shall likewise be funded with
13 
one percent (1%) of the following: 2) collected taxes pursuant to the implementation
14 
of Republic Act No. 10351, otherwise known as the "SIN Tax Act of 2012;" 3) earnings
15 
derived by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) from its
16 
collections; and 4) equity contributions of participating government financial
17 
institutions. Voluntary contributions, grants, gifts from both local and foreign sources
18 
as may be accepted by the Council shall also form part of the SEDF.
19 
The Social Enterprise Development Fund may also come from programs or projects
20 
implemented by national government agencies funded by development assistance
21 
from bilateral or multilateral development partners.
22 
Additional funding and appropriation shall be provided by the Office of the President
23 
as the needs arise during calamities, pandemics and other extra-ordinary
24 
circumstances, subject to audit by the Commission on Audit. Social enterprise resource
25 
institutions may receive funds for social enterprise programs.
26 
In addition to the SEDF, the 5% allocation for Gender and Development (GAD)
27 
programs of government agencies and local government units as prescribed in
26


1 
Republic Act. No. 9710, otherwise known as the "Magna Carta of Women Act of 2009,"
2 
may be accessed by social enterprises which are women-led or contribute to women's
3 
economic empowerment. The allocation can help build the capacity of such
4 
enterprises, including further organizing women-led cooperatives and groups to
5 
improve women's economic participation.
6 
The SEDF shall be used for the purposes provided herein. Any undisbursed funds from
7 
the preceding year shall form part of the disbursable portion of the SEDF in the
8 
following year.
9 
Also to this end, there is hereby created a Social Enterprise Guarantee Fund Pool
10 
(SEGFP) which shall be comprised of the five percent (5%) of the preceding year
11 
budget surplus of the government-owned and controlled corporations and government
12 
financial institutions as contribution to the SEGFP in accordance with relevant laws,
13 
charters and by-laws, in addition to voluntary contributions, grants and gifts from both
14 
local and foreign sources as may be accepted by the Council.
15 
The SEGFP shall be administered by the Council and shall be used to mitigate the risks
16 
involved in SE sector lending, facilitating the provision of credit therefor. The fund
17 
shall be placed in trust with the Land Bank of the Philippines for the purpose of
18 
providing guarantee cover to participating financial institutions and other parties in
19 
extending financing to SEs: Provided, that the fund may also be used to cover the
20 
performance bond of SEs in government procurement.
21 
The Council, in coordination with the Land Bank of the Philippines, shall draw up the
22 
mechanics and administrative arrangements and issue the implementing guidelines for
23 
the fund pool.
24 
Sec. 19. Cash Incentives for Persons with Disabilities (PWD). - To level the
25 
playing field and recognize the circumstances of start-up SEs primarily employing
26 
PWDs, the SEDF created in Section 18 of this Act shall provide a cash incentive for
27 
every PWD, in accordance with Republic Act No. 7277, otherwise known as the "Magna
27


1 
Carta for Disabled Persons Act of 1992," and other marginalized sectors as may be
2 
provided by this law, representing at least twenty five percent (25%) of the dally
3 
minimum wage, until such time that the said SE is able to achieve financial
4 
sustainability.
5 
Sec. 20. Social Enterprise Recovery and Rehabilitation Fund. - To prepare for
6 
or respond to climate risks and impacts, disaster vulnerabilities and hazards,
7 
humanitarian emergencies (including those arising from armed conflict), epidemics,
8 
financial crises or economic shocks, and other such events, a Social Enterprise
9 
Resilience Fund is hereby established to build the resilience of social enterprises. This
10 
shall include stimulus grants, climate adaptation initiatives, risk insurance, and other
11 
such facilities and products to improve the ability of SEs to withstand shocks and
12 
stresses. The Fund shall be lodged with the Department of Trade and Industry and
13 
shall be managed by the SEDC.
14 
Sec. 21. Social Enterprise Research and Development System. - The Council,
15 
in coordination with the Department of Science and Technology (DOST), NEDA, DTI,
16 
and other appropriate agencies and research institutions, shall develop and enhance
17 
a research and development system that:
18 
(a) Provides studies on opportunities for poverty reduction and SE development
19 
in key economic subsectors and other inputs for the Council to undertake strategic
20 
planning for its PRESENT Program;
21 
(b) Equip SEs and support institutions with technologies that are appropriate
22 
for enhancing the participation and benefits of the poor in various economic
23 
subsectors; and,
24 
(c) Equip SEs and support institutions with Innovative and sustainable
25 
approaches to improve access of the poor to quality basic social services.
26 
This system must be based on gender analysis, or, as defined in this bill, the systematic
27 
analytical process based on sex-disaggregated and gender information.
28


1 
Sec. 22. Social Enterprise Marketing Infrastructure Development - The Council
2 
shall promote the development and expansion of local and foreign markets for the
3 
products and services of SEMPs, guided by the principles of fair trade. Consistent with
4 
this, the Council shall:
5 
(a) Establish a SE Marketing Assistance Program (SMAP) that will assist SEMPs
6 
match supply with demand in both domestic and foreign markets, as well as promote
7 
SE products and services through tri-media, trade fairs and trade missions;
8 
(b) Develop, install and sustain a SE market information system (SMIN) with
9 
the assistance of the DTI and DICE which shall be called the SE Marketing Information
10 
Network (SMIN).
11 
The SMIN shall be set up from the level of the municipal and provincial LGUs, the
12 
regional and up to the Council level within one (1) year from the approval of this Act,
13 
taking into account existing information networks such as the internet and using a
14 
dedicated website for the purpose, to ensure linkage of the SEs with the government
15 
and its various departments, agencies, bureaus and instrumentalities, the local and
16 
domestic markets, as well as research institutions. The Council shall provide technical
17 
assistance in setting up the SMIN at the local and regional levels.
18 
All government departments, agencies, bureaus, research institutions, as well as the
19 
LGUs shall consolidate and continuously update all relevant information and data that
20 
would be of use to SEs on a periodic basis and make such data available on a dedicated
21 
website on the internet. Data shall be gender-disaggregated as far as possible.
22 
Compliance with the relevant laws, rules, and regulations concerning data privacy shall
23 
be ensured.
24 
The SMIN shall provide information and marketing services related to products of
25 
SEMPS which shall Include the following:
26
27
a. Supply data;
b. Demand data;
29


1 
c. Price and Price trends;
2 
d. Product standards;
3 
e. Directory of, but not limited to SEs, traders, key market centers, processors
4 
and business institutions both at the national and local levels;
5 
f. Information and technology generated from research institutions;
6 
g. International, regional and local market forecasts; and
7 
h. Resource accounting data.
CHAPTER IV
FINANCING AND BENEFITS
8 
Sec. 23. Hybrid Financing. - Social Enterprises shall be supported through
9 
hybrid financing to enable them to provide a combination of transactional and
10 
transformational services to the marginalized sectors, groups or persons they serve.
11 
Given the unique nature of SEs as wealth-creating organizations that pursue their
12 
social mission to improve societal wellbeing in ways that are ecologically and financially
13 
sustainable, they need to be supported through hybrid financing that entails a
14 
combination of grants with loans and other financial instruments.
15 
Sec. 24. Speciai Credit Windows with non-coiiateraiized bans. - In addition to
16 
the special credit windows provided for the promotion of microfinance as provided
17 
under Section 16 of Republic Act No. 8425, the Land Bank of the Philippines,
18 
Development Bank of the Philippines, Philippine Postal Bank, and Al Amanah Bank,
19 
and other public or government-owned banks are hereby mandated to set aside at
20 
least ten percent (10%) of their total loan portfolio based on their balance sheet in
21 
the end of the preceding quarter over a period of five (5) years and open a special
22 
credit window for qualified SEs.
23 
For a period of eight (8) years from the date of the effectivity of this Act, all other
24 
lending institutions as defined under the Central Bank Act or the General Banking Act,
30


1 
as amended, shall likewise set aside at least ten percent (10%) of their total loan
2 
portfolio that will not require a collateral based on their balance sheet as of the end
3 
of the previous quarter and make the same available for SEs through a special credit
4 
window. The BSP, in consultation with the Council, shall formulate the rules for the
5 
effective implementation of this provision: Provided, That the purchase of government
6 
notes, securities and other negotiable instruments shall not be deemed compliance
7 
with the foregoing provision,
8 
The Council shall establish a system to monitor all loan applications of SEs in order to
9 
account for the absorptive capacity of the SE sector.
10 
The BSP shall require lending institutions covered by this Act to furnish the Council on
11 
a quarterly basis a regular report on their respective compliance with the above
12 
provisions on the mandatory credit allocations for SEs and shall act immediately on
13 
the Council's reports of non-compliance therewith.
14 
The special credit window for SEMPS shall bear interest lower than the market rate
15 
and shall have longer terms of payment and waiver of applicable fees.
16 
Sec. 25. Special Credit Window Purposes. - The special credit window provided
17 
under Section 24 of this Act shall be intended for the following purposes:
18 
(a) Credit line for business development loan or working capital loan to cover
19 
the operational and management expenses of a start-up or existing business or income
20 
generating project, including receivable financing or purchase of additional inventory,
21 
soft or intangible investments such as trade fair participation or acquisition of software
22 
or franchise development packages;
23 
(b) Fixed assets financing to cover acquisition of fixed assets like machineries
24 
and equipment, motor vehicle, or acquisition of lot for project site or construction of
25 
a plant and building and the improvement thereof;
26 
(c) Value chain financing to cover any of the value chain activities such as
31


1 
production, processing and marketing;
2 
(d) Domestic letter of credit or trust receipt to provide a stand-by credit facility
3 
for the SE borrower for the purchase of product inputs, equipment, machinery,
4 
implements, and spare parts, whereby payment of which Is guaranteed and to be
5 
made to the seller by the lending institution, provided all documents conform with the
6 
terms and conditions of the credit; and
7 
(e) Revolving Credit Line for re-lending to finance the livelihood project
8 
requirements of end-borrowers.
9 
(f) A special credit line (X% of total loan portfolio) for women-led SEs or SEs
10 
that support women (ie., 50%), particularly those in the agricultural and informal
11 
sectors. Women shall have no barriers to economic participation as provided for in
12 
Republic Act No. 7192, othenwise known as the "Women in Development and Nation
13 
Building Act of 1992."
14 
Sec. 26. Grant facility. -The SE Development Fund in Section 18 shall provide
15 
grants to qualified social enterprises and resource institutions for the performance and
16 
conduct of their mission toward poverty reduction, sustainable development,
17 
promotion of gender and social justice, environmental conservation, climate action,
18 
and improvement in economic welfare of the poor and marginalized sectors.
19
20 
There will be three windows under this fund facility, namely: capacity-building grant;
21 
start up enterprise grant; and ecosystem-building grant. The SE Council shall
22 
formulate the guidelines for the management and implementation of grant assistance.
23 
Sec. 28. Tax Credits. - SEDC will develop a system of valuation of social,
24 
economic and ecological contributions of social enterprises and the social impact on
25 
the marginalized sectors they serve, as bases for tax credits from the government.
26 
Sec. 29. Preferential Rights. - Without prejudice to preferential rights already
27 
available to specific enterprises or organizations under other laws, qualified SEMPs
28 
shall be accorded a preferential right in the procurement process and in the
32


1 
Implementation of procurement contracts by the government in all Its branches,
2 
departments, agencies, subdivisions, and Instrumentalities, including In the
3 
government-owned and controlled corporations and local government units.
4 
Such a preferential right is anchored not just in economic efficiency but in social values
5 
which provide long-term benefits to society. As defined in this bill, social value refers
6 
to the additional benefit to society of procuring a good or service, over and above the
7 
direct benefit and value of the good or service to the procuring entity.
8 
These social values include, inter alia, poverty reduction, sustainable development,
9 
environmental conservation, climate action, community development, and gender and
10 
social justice. As such, the determination of government procurement shall factor in
11 
social values.
12 
Such a preferential right, however, shall not be prejudicial to the interests of the
13 
government and the public.
14 
SEMPs shall be given priority and preference in the following procurement processes:
15 
(a) Direct contracting as provided under Section 50 of Republic Act No. (RA)
16 
9184, otherwise known as the "Government Procurement Reform Act of 2002," may
17 
be resorted to if the contracting party selling the goods and services required by the
18 
procuring entity is a social enterprise as qualified by the Council.
19 
(b) Shopping as provided under Section 52, paragraph (a) of RA 9184 may be
20 
resorted to when there is an unforeseen contingency requiring immediate purchase:
21 
Provided, That the procurement of the goods and services shall be first obtained from
22 
the social enterprise within the area of operation of the procuring entity which is duly
23 
qualified by the Council as having the capacity to supply the required goods and
24 
services: Provided, further. That the amount shall not exceed Five hundred thousand
25 
pesos (P500,000.00).
26 
(c) Shopping as provided in Section 52, paragraph (b) of RA 9184 may be
27 
resorted in the procurement of ordinary or regular office supplies and equipment not
28 
available in the Procurement Service involving an amount not exceeding Two hundred
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1
2
3
4
5
6
7
8 
9
10
11
12
13
14
fifty thousand pesos (P250/000.00): Provided, That the Procurement does not result 
in splitting of contracts: Provided, further, That a price quotation shall be first obtained 
from a social enterprise as qualified 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.
(d) 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 qualified by the 
Council as having the capacity to supply the required goods and services.
(e) Social enterprises established by and for Persons with Disability (PWD)shall 
be qualified under the Department of Education's Supply and Delivery of Furniture for 
Elementary, Junior and Senior High Schools under the 10% Allocation for Cooperatives 
of Persons with Disability.
15 
(f) A procuring entity, when applicable, shall have at least one member
16 
representing SEMPS.
17 
Qualified SEMPs under this Act shall be entitled to a share of at least twenty percent
18 
(20%) of the total procurement value of goods and services supplied to the
19 
government, its bureaus, offices and agencies annually. Provided, That, the DBM shall
20 
direct line agencies of government to include at least 10% of its annual budget for
21 
Maintenance and Other Operating Expenses and Capital Outlay specifically for goods
22 
procured and services contracted from social enterprises producing and offering such
23 
goods and services.
24 
Sec. 30. Insurance for Sociai Enterprises - The Insurance Commission shall
25 
issue the necessary rules and regulations and implement measures to ensure that the
26 
insurance industry shall provide insurance products, both life and non-life, for social
27 
enterprises and their stakeholders among the poor. Furthermore, SEMPS shall be
28 
assisted to become eligible and effective insurance providers to their clients and
29 
constituents.
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1 
Sec. 31. Support for Social Investors and SE Resource Institutions. - The
2 
government shall develop a program that fosters a community of social investors and
3 
resource institutions supportive of social enterprises.
4 
Sec. 32. Appropriations. - The amount necessary to implement the provisions
5 
of this Act shall be charged against the current year's appropriation of the Office of
6 
the President. Thereafter, such sums as may be necessary for its continued
7 
implementation shall be included in the GAA. The budget requirements for the
8 
implementation of this Act for cooperating agencies shall be incorporated in their
9 
respective budgets.
10 
Sec. 33. Pena! Clause. - The penalty of imprisonment for not less than six (6)
11 
months but not more than two (2) years or a fine of not less than two hundred fifty-
12 
thousand (P250,000) or both imprisonment and fine, at the discretion of the court,
13 
shall be imposed upon any person, who, intentionally or by gross negligence, fails to
14 
provide the benefits, rights and incentives granted to SEs in violation of this Act or
15 
perform any act in violation of its provisions.
16 
If a corporation is found to have violated the provisions of this Act, the officers,
17 
directors, members or trustees shall be held liable. If the violation was committed by
18 
a government official or employee, such official or employee shall be terminated from
19 
the service with forfeiture of all the benefits due him in addition to the fine and/or
20 
imprisonment mentioned above.
21 
Corporations and other juridical entities, financial or otherwise, found representing
22 
themselves as a SE shall be caused to pay double the benefits it reaped from this
23 
program through the taxes it was able to save when it represented itself as a SE. In
24 
addition, the officers of the juridical entity who represented itself as a SE shall be liable
25 
for a fine of P500,000.00 or imprisonment for not less than two (2) years or both fine
26 
and imprisonment at the discretion of the court.
27 
Sec. 34. Non-Compliance with the Mandatory Allocation of Credit Resources. -
28 
Administrative sanctions including a fine of not less than Five hundred thousand pesos
35


1 
(P500,000.00) shall be imposed by the Banko Sentral ng Pilipinas upon any banking
2 
or lending institution who fails to provide the credit allocations granted to SE in
3 
violation of Section 19 of this Act.
4 
Sec. 35. Joint Congressional Oversight Committee. - Upon the effectivity of this
5 
Act, a Congressional Oversight Committee, hereafter referred to as the PRESENT
6 
Oversight Committee is hereby constituted. This Committee shall set the overall
7 
framework to review the implementation of this Act. It shall likewise determine
8 
inherent weaknesses in the law and recommend necessary remedial legislation or
9 
executive measures.
10 
The PRESENT Oversight Committee shall be composed of fourteen (14) members with
11 
the chairpersons of the Committee on Trade and Industry of the House of
12 
Representatives, and the Committee on Trade, Commerce and Entrepreneurship of
13 
the Senate as Co-Chairpersons; and six (6) members from each House, to be
14 
designated by the Speaker of the House of Representatives, and the Senate President,
15 
respectively.
16 
For purposes of determining remedial legislation, the PRESENT Oversight Committee
17 
shall, within six (6) years after the effectivity of this Act, conduct a sunset review
18 
which shall include a systematic evaluation of the impact of this Act, accomplishments
19 
of the program, and the performance of its implementing agencies.
20 
Sec. 36. Separability. -If any provision or part of this Act is declared invalid or
21 
unconstitutional, the remaining parts or provisions not affected shall remain in full
22 
force and effect.
23 
Sec. 37. Implementing Rules and Regulations. - Within ninety (90) days from
24 
the effectivity of this Act, the Department of Trade and Industry shall, in consultation
25 
and coordination with the concerned government agencies and social enterprise
26 
sector, promulgate the necessary rules and regulations for the effective
27 
implementation of this Act.
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1 
Sec. 38. Repealing Clause. - For purposes of this Act, Section 11 of RA 8425
2 
and Sections 50, 52 and 53 of RA 9184 which are inconsistent with this Act are hereby
3 
deemed amended. Aii other laws, executive orders, presidential decrees, rules and
4 
regulation or parts thereof inconsistent with any provisions of this Act are hereby
5 
repeaied, amended or modified accordingly.
6 
Sec. 39. Effectivity. - This Act shail take effect fifteen (15) days from its
7 
pubiication in the Officiai Gazette or in two (2) newspapers of general circulation.
Approved,
37