Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
EXPLANATORY NOTE 
Micro, Small, and Medium Enterprises (MSMEs) are widely recognized as a cornerstone 
of the Philippine economy. According to 2023 data from the Philippine Statistics Authority 
(PSA), MSMEs account for over 99% of all business establishments nationwide, with 
microenterprises alone comprising more than 90%.1They are key drivers of local employment 
and inclusive growth—generating jobs, expanding market participation, and supporting large 
enterprises across supply chains. Despite their economic importance, MSMEs remain 
vulnerable to external shocks such as financial disruptions, market volatility, and disasters. 
To address these challenges, the government established the Pondo sa Pagbabago at 
Pag-asenso (P3) program to provide accessible and affordable credit to small entrepreneurs. 
Since its launch, the program has disbursed more than P8.65 billion in loans, directly 
benefiting over 220,000 entrepreneurs nationwide.2 These include market vendors, small store 
owners, agribusiness operators, and members of cooperatives who otherwise lack access to 
formal financing systems. 
To further institutionalize the program and expand its reach, this proposed measure 
seeks to strengthen the implementation of the P3 Fund, making it a core instrument for MSME 
development. The measure underscores the importance of financial inclusion as a critical 
component of sustainable economic recovery and equitable growth. 
Aligned with President Ferdinand R. Marcos Jr.'s 2025 State of the Nation Address, this 
bill responds to his administration’s call to support Filipino entrepreneurs by improving access 
to credit and livelihood assistance, especially for those in the countryside and informal 
sectors.3 
The same measure was approved during the 19th Congress, reflecting continued 
legislative momentum to scale up assistance and ensure MSMEs receive the institutional 
support necessary to thrive. 
In view of the foregoing, the immediate passage of this bill is earnestly sought. 
1 Philippine Statistics Authority. (2023). List of Establishments, Department of Trade and Industry. 
https://www.dti.gov.ph/resources/msme-statistics 
2 Assistance.PH. Pondo sa Pagbabago at Pag-Asenso (P3) Program. https://assistance.ph/pondo-sa-pagbabago-at-pag-
asenso-p3-program 
3 Presidential Communications Office. (2025). PBBM vows to empower entrepreneurs, boost livelihood programs for Filipinos. 
https://stateofthenation.gov.ph/sona/2025 
August 14, 2025
6:30 pm
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HON. MIGUEL LUIS R. VILLAFUERTE 
HON. VINCENZO RENATO LUIGI R. VILLAFUERTE 
HON. TSUYOSHI ANTHONY G. HORIBATA 
HON. TERRY L. RIDON 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
AN ACT PROMOTING ENTREPRENEURSHIP BY ESTABLISHING A SUSTAINABLE 
FINANCING PROGRAM FOR MICRO AND SMALL ENTERPRISES THROUGH THE 
PONDO SA PAGBABAGO AT PAG-ASENSO PROGRAM, AND APPROPRIATING 
FUNDS THEREFOR  
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. – This Act shall be known as the "Pondo sa Pagbabago at Pag-asenso 
Act" or the “P3 Act.” 
SECTION 2. Declaration of Policy. – It is the declared policy of the State to foster national 
development, promote inclusive growth, and reduce poverty by promoting the growth of micro 
and small enterprises (MSEs) that facilitate local job creation, production and trade in the 
country. Towards this end, the State shall develop policies, plans and programs, and initiate 
means to encourage entrepreneurial activities, and to ease the constraints and challenges to 
MSEs, particularly on access to financing. 
SECTION 3. Objectives. – The objectives of this Act are: 
(a) To provide an affordable, accessible, and simple financing program for the country's
MSEs, especially those in the poorest populations and underserved areas;
(b) To provide a better alternative to informal lenders or the so-called "5-6" money
lending system availed of by micro enterprises;
(c) To bring down the interest rate at which financial services is made available to
MSES;
(d) To boost the development of entrepreneurship and the micro, small and medium
enterprise (MSME) sector, particularly the MSEs; and
(e) To support the recovery of MSEs from the effects of the covid-19 pandemic lockdown
and ensure their viability.
SECTION 4. Creation of the Pondo sa Pagbabago at Pag-asenso (P3) Fund. – There is 
hereby created the Pondo sa Pagbabago at Pag-asenso Fund, hereinafter referred to as the 
"P3 Fund,” which shall be lent out to qualified MSEs under such terms and conditions that will 
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meet the purposes of this Act. 
 
The beneficiaries of the P3 Fund shall be the micro and small enterprises, as defined 
under Republic Act No. 6977, as amended, otherwise known as the "Magna Carta for Micro, 
Small and Medium Enterprises (MSMEs).” 
 
The fund shall be accessible through the Small Business Corporation (SB Corp.) and 
through accredited partner financial institutions (PFIs) such as rural banks, thrift banks, 
development banks, cooperative banks, cooperatives, non-stock savings and loan 
associations, microfinance non-government organizations, or lending companies. 
 
For efficient implementation and operation, cooperatives except cooperative banks 
and insurance cooperatives shall be under the sole supervision and examination of the 
Cooperative Development Authority (CDA); all other financial entities, corporations and 
financial intermediaries, such as non-government organizations, financing companies, non- 
stock savings and loan associations, microfinance non-government organizations, and lending 
investors shall be under the Securities and Exchange Commission (SEC); banks shall be 
under the Bangko Sentral ng Pilipinas (BSP); and insurance companies shall be under the 
Insurance Commission (IC). 
 
Cooperative banks shall be under the supervision and examination of the CDA and 
BSP; while insurance cooperatives shall be under the supervision and examination of the CDA 
and Insurance Commission (IC). 
 
SECTION 5. Lead Implementing Agency. – The SB Corp., the financing arm of the 
Department of Trade and Industry (DTI), shall be the lead implementing agency for the P3 
Fund. The SB Corp. shall handle the fund delivery to MSEs through the following modes: 
 
(a) Direct lending for forty percent (40%) of the P3 Fund; and 
 
(b) Lending through accredited PFIs for sixty percent (60%) of the P3 Fund. 
 
The SB Corp. shall prioritize lending to underserved and unserved areas and MSE 
segments of the country, subject to the review and approval of the Micro, Small and Medium 
Enterprise Development (MSMED) Council. 
 
With the goal to achieve greater outreach to all provinces and barangays of the 
country, financial technology-enabled systems and processes can be utilized in the 
implementation of the P3 program. 
 
An amount sourced from the accumulated P3 Fund of not more than five percent (5%) 
of the total loans disbursed for the period can be used by the SB Corp. to support its annual 
administrative and operating expenses for the P3 Fund, inclusive of the cost of regular plantilla 
personnel, up to the extent of their involvement in developing and managing the P3 loan 
portfolios. 
 
SECTION 6. Features of the P3 Fund. – The P3 Fund shall have the following features: 
 
(a) The loanable amount for individual loans shall be set and regularly reviewed by the 
MSMED Council; 
 
(b) The effective interest rate to be imposed on the loan availed of by the P3 Fund 
beneficiaries shall not exceed one percent (1%) per month for direct lending, and shall 
not exceed two and a half percent (2.5%) per month for lending through accredited 
PFIs;  


 
 
(c) The interest earnings shall accrue to the P3 Fund; 
 
(d) There shall be no collateral requirement from the P3 Fund loan beneficiaries; and 
 
(e) The lenders shall have a collection mechanism, whereby payments are made on a 
daily, weekly, or monthly basis, or depending on the livelihood project income cycle. It 
shall be the duty of the lender to collect the loan principal and the interest payments 
from the borrower. 
 
SECTION 7. Policy Oversight Function. – The MSMED Council shall monitor the utilization 
and disbursements of the P3 Fund. It shall submit to the President of the Philippines and to 
Congress, through the Congressional Oversight Committee on Micro, Small and Medium 
Enterprise Development (COC-MSMED), a quarterly report on the status of the P3 Fund. 
 
SECTION 8. Appropriations. – The initial amount for the implementation of this Act shall be 
charged against the current year's appropriations of the SB Corp. Thereafter, such amount 
necessary shall be included in the annual General Appropriations Act. 
 
SECTION 9. Implementing Rules and Regulations. – Within sixty (60) days from the 
approval of this Act, the DTI, in consultation with the stakeholders concerned, shall formulate 
and promulgate the necessary rules and regulations to implement the provisions of this Act. 
 
SECTION 10. Separability Clause. – If any part or section of this Act is declared 
unconstitutional, such declaration shall not affect in any manner other parts or sections 
hereof. 
 
SECTION 11. Repealing Clause. – Section 22 of Republic Act No. 8367, otherwise known 
as the "Revised Non-Stock Savings and Loan Association Act of 1997" is hereby repealed. All 
laws, decrees, proclamations, issuances, or ordinances that are contrary to or inconsistent 
with the provisions of this Act are hereby amended, repealed or modified accordingly. 
 
SECTION 12. Effectivity. – This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
 
 
Approved,