Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
 TWENTIETH CONGRESS 
First Regular Session 
House Bill No.  1829 
________________________________________________________________ 
 Introduced by: REPRESENTATIVE ERIC L. OLIVAREZ 
EXPLANATORY NOTE 
Although the informal “5-6” lending practice come at high interest rate, 
many still available this provides a more expeditious way of borrowing money. 
Additionaly, the high collateral requirements of formal lenders have come a 
hindrance for micro, small, and medium enterprises (MSMEs) which lead to 
utilization of the services of informal lenders. However, the usurious interest 
rates tend to become burdensome to enterpreneurs which affect their growth 
and development especially microenterpreses. 
Considering the circumtances, this Bill seeks to institutionalize the “Pondo 
sa Pagbabago at Pag-asenso (P3) Fund” in order to provide  an affordable, 
accessiible, and simple micro-financing program, encourage microenterprises, 
and avoid, if not totally halt, borrowing from informal lenders. Through the 
passage of this Bill, microenterprises wil be able to effectively sustain their 
businesses and become more self-suffient. 
In order to address the financing difficulties of micro enterprises, the 
passage of this Bill is earnestly sought. 
ERIC L. OLIVAREZ 
July 14, 2025
11:34 am


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Constitution Hills, Quezon City 
 TWENTIETH CONGRESS 
First Regular Session 
House Bill No. 1829 
________________________________________________________________ 
 Introduced by: REPRESENTATIVE ERIC L. OLIVAREZ 
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”. 
SEC. 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. 
SEC. 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. 
SEC. 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 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). 
SEC. 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. 
SEC. 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. 
SEC. 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. 
SEC. 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. 


SEC. 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. 
SEC. 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. 
SEC. 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. 
SEC. 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,