TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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^••1 i.Offirr of f*-
25 JUL14 P3 52
SENATE
INTRODUCED BY SENATOR RISA HONTIVEROS
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
Four million more Filipinos were pushed into poverty in the first half of 2021, 
increasing our country's poverty incidence to 26.16 million or 23.7%. In order to 
address poverty and its perennial challenges, new social investment models and 
capacity building programs must be developed to help Filipinos become self-reliant 
entrepreneurs and achieve significant positive impact for the community.
Numerous social enterprises have successfully demonstrated the possibility of 
generating wealth, while simultaneously advancing their social missions. As a poverty 
reduction strategy, it creates social and economic value that benefits the poor as its 
primary stakeholders. These stakeholders are engaged as partners in the value chain 
(either as workers, suppliers, clients, co-developer, co-producer) and in social 
enterprise governance.
This Bill provides the framework for planning and implementation of a National 
Poverty Reduction through Social Entrepreneurship (PRESENT) Program. It also seeks 
to provide incentives and benefits to promote the growth of social enterprises, and to 
integrate SE into the overail poverty reduction strategy of the government.
The support and passage of this bill is also a means for the country to further 
contribute in the achievement of the national targets in conformance of the 2030 
Sustainable Development Goals. In particular, zero hunger, zero poverty, reduced 
inequality, decent jobs, and inclusive, sustainable communities.


The immediate passage of this bill is earnestly sought.
RISA HONTIVEROS 
Senator


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TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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SENATE 
S.B. No.
"'l 
of ll; ,'■:■■■
25 JUL 14 P3 -52
\
ri:ceivlOd\. _____
INTRODUCED BY SENATOR RISA HONTIVEROS
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
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. - This Act shall be known as the "Poverty Reduction 
through Social Entrepreneurship Act."
Sec. 2. Statement of Policy. - As provided in the Constitution of the Republic 
of the Philippines, it is the declared policy of the State to promote a just and dynamic 
social order that will ensure the prosperity and independence of the nation and free 
the people from poverty through policies that provide adequate social services, 
promote full employment, a rising standard of living, and an improved quality of life 
for all. In Article II, Sections 10 and 11, it is further declared that the State shall 
provide social justice in all phases of national development and that the State values 
the dignity of every human person and guarantees full respect for human rights.
In Article XII, Section 1, it is further stated that the goals of the national economy are 
a more equitable distribution of opportunities, income, and wealth; a sustained 
increase in the amount of goods and services produced by the nation for the benefit 
of the people; and an expanding productivity as the key to raising the quality of life 
for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound 
agricultural development and agrarian reform, through industries that make full and 
efficient use of human and natural resources, and which are competitive in both 
domestic and foreign markets. However, the State shall protect Filipino enterprises


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against unfair foreign competition and trade practices. The State also recognizes the
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important role of enterprises in the economy as the major agent of development,
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creating off-farm employment opportunities and providing transitional means for
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improving people's livelihoods.
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Toward this end, the State shall pursue a poverty reduction program that promotes an
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environment conducive to the development and growth of a vibrant social enterprise
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sector engaged in poverty reduction, and economic and social development. It shall
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empower the marginalized sectors as primary stakeholders in social enterprises,
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establish mechanisms essential to realizing their potential and achieving their full
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growth, and extend the assistance necessary for their advancement. The State shall
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likewise ensure that the provision for technical and financial assistance, incentives and
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other services are free from any condition that might infringe upon the autonomy or
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organizational integrity of the social enterprises to enable them to develop into viable
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and vital anti-poverty agents, and a strong social entrepreneurship movement which
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will be instrumental in reducing poverty in the country.
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The State, through the creation of an enabling policy environment for social
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enterprises, affirms its commitment to the Sustainable Development Goals (SDGs).
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Social enterprises shall form part of national and local development plans toward
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accelerating the achievement of the SDGs, especially the targets of zero poverty; no
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hunger; gender equality; decent work and inclusive economic growth; reducing
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inequalities; and sustainable production and consumption.
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The State shall pursue a low carbon development pathway, to which social enterprises
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engaged in renewable energy, environmental protection, circular economy, and other
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such activities, can contribute. This is consistent with the commitment of the State to
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its Nationally Determined Contribution (NDC) under the global Paris Climate
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Agreement, which it ratified in 2017.
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The State affirms the role of women in nation building and ensures the fundamental
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equality of men and women before the law. It shall promote empowerment of women
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and pursue equal opportunities for women and men and ensure equal access to
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resources and to development results and outcome. Further, as set out in Republic Act
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No. 9719, otherwise known as the "Magna Carta of Women Act of 2009," the State
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shall ensure the full integration of women's concerns in the mainstream of
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development, shall provide ample opportunities to enhance and develop their skills,
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acquire productive employment, and contribute to their families and communities to
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the fullest of their capabilities.
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Sec. 3. Definition of Terms. - As used in this Act:
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a. Social Enterprise (SE) shall primarily refer to a social mission-driven
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organization that creates wealth while contributing to social wellbeing and
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ecological sustainability. It can take the form of non-stock, non-profit
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corporations including NGOs, POs, Foundations, Associations; cooperatives;
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and sole proprietorships, partnerships, and stock corporations.
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A social enterprise, for purposes of this Act, shall also refer to a Social Enterprise
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with the Marginalized as Primary Stakeholders (SEMPS). A SEMPS is a social


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enterprise that explicitly declares and pursues poverty reduction or improving
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the quality of life of specific segments of the marginalized and vulnerable
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sectors as its principal objective. A SEMPS engages and invests in the poor to
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become effective workers, suppliers, clients and/or owners, and ensures that a
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substantive part of the wealth created by the enterprise is distributed to them.
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This includes efforts to help workers in the informal sector transition to be
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stakeholders of the formal economy. In addition to reinvesting its surplus or
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profits back toward the fulfillment of its social mission in a sustainable way, a
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SEMPS also uses its surplus or profits and mobilizes other resources to assist
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the poor to become partners in SE or value chain management/ governance
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and to become partners in community, sectoral and societal transformation.
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b. /l55e&shall refer to all kinds of properties, real or personal, owned by the social
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entrepreneur as defined in paragraph (^ff) of this Section and used for the
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conduct of its business: Provided, that for the purpose of exemption from taxes
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and to benefit from other incentives under this Act, this term shall mean all
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kinds of properties, real or personal, owned and/or used by the SE for the
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conduct of its business;
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c. Capability building shall refer to the process of enhancing the viability and
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sustainability of SEMPS. It pertains to 1) education, training, coaching and other
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learning events such as, but not limited to, study tours; 2) technical,
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consultancy and advisory services; 3) assistance in organizational systems
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development; 4) technology incubation, development and dissemination; 5)
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value chain and subsector development; 6) conduct of SE trade fairs and
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missions; 7) networking and policy advocacy initiatives, and other such
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activities that enable SEs to be effective and efficient vehicles for poverty
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reduction. The term capability building precludes the grant of any loan or equity
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funds to the SE and shall in no way refer to the provision of equity investments,
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seed funding, partnership's seed funds, equity participation, start-up funds or
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any such activity that connotes the infusion of capital or funds from the
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government or from the SE Development Fund created under Section 18 of this
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Act;
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d. Civil society organizations shall refer to private, voluntary, and non-profit
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organizations of citizens that are established to pursue a mission, usually
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involving the interest of the public, marginalized groups or specific sectors of
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society. They include non-government organizations, socio-civic groups,
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foundations and people's organizations;
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e. Councilshd\\ refer to the SE Council;
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f. Cooperative shall refer to an autonomous and duly registered association of
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persons, with a common bond of interest, who have voluntarily joined together
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to achieve their social, economic, and cultural needs and aspirations by making
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equitable contributions to the capital required, patronizing their products and
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services and accepting a fair share of the risks and benefits of the undertaking
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in accordance with universally accepted cooperative principles as defined in


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R.A. 6938, as amended by R.A. 9520, otherwise known as the "Philippine 
Cooperative Code of 2008";
g. Economic subsectors shall refer to networks of related actors and enterprises 
performing various functions in value chains. These actors and enterprises 
transform raw materials into finished products, or develop services, and 
distribute or provide them through market channels to final consumers; they 
may be identified by key raw material source, by finished product or final service 
provided. An economic subsector may be comprised of several competing value 
chains. By understanding the dynamics of economic subsectors and using them 
as units of planning social entrepreneurship interventions, government 
agencies, support institutions and SEs shall more effectively reach and benefit 
a greater number of poor in poverty reduction programs;
h. Empowerment strategy s\\bW refer to a development strategy that enables the 
marginalized sectors to own, manage, and control SEs in order for them to reap 
maximum benefits from it and which acts as a channel for directly distributing 
income;
i. 
Fair trade shall refer to a trading partnership based on dialogue, transparency 
and respect and which seeks greater equity in international trade and the 
transformation and adaptation of trading structures and practices in favor of 
the poor and disadvantaged by offering better trading conditions to, and 
securing the rights of, marginalized producers and workers;
j. Fair trade organizations shall refer to enterprises certified by internationally- 
and nationally- recognized Fair Trade networks;
k. Fair trade principles shall refer to the values adopted by fair trade organizations 
in their day-to-day operation. These include creating opportunities for 
economically- disadvantaged producers; transparency and accountability; 
payment of a fair price; ensuring no child labor and forced labor; commitment 
to non-discrimination, gender equity and freedom of association; ensuring good 
working conditions; providing capacity building; and, respect for the 
environment;
L Foundation shall refer to the categorization of a non-profit organization duly 
registered that typically either donates funds and support to other organizations 
or provides the source of funding for its own charitable purposes. Unlike a 
company, foundations have no shareholders though they may have a board, an 
assembly and voting members. A foundation may hold assets in its own name 
for the purposes set out in its constitutive documents, and its administration 
and operation are carried out in accordance with its statutes or articles of 
association rather than fiduciary principles;
m. Gender Analysis shall refer to a systematic analytical process based on sex- 
disaggregated and gender information. This process is used to identify, 
understand, and describe gender differences and the relevance of gender roles


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and power dynamics in a particular context;
n. Gender and Development or GAD shall refer to the development perspective 
and process that are participatory and empowering, equitable, sustainable, free 
from violence, respectful of human rights, and supportive of self-determination 
and actualization of human potentials. It seeks to achieve gender equality as a 
fundamental value that should be reflected in development choices; seeks to 
transform society's social, economic and political structures and questions the 
validity of the gender roles they ascribed to women and men; contends that 
women are active agents of development and not just passive recipients of 
development assistance; and stresses the need of women to organize 
themselves and participate in political processes to strengthen their legal rights;
o. Gender Mainstreaming shall refer to the strategy for making women's as well 
as men's concerns and experiences an integral dimension of the design, 
implementation, monitoring, and evaluation of policies, programs and projects 
in all social, political, civil, and economic spheres so that women and men 
benefit equally. It is the process of assessing the implications for women and 
men of any planned action, including legislation, policies or programs in all 
areas and at all levels;
p. Hybrid financing shaW refer to the combination of grants with loans and other 
financial instruments to support the unique nature of SEs as wealth creating 
organizations that pursue social missions to improve societal wellbeing - in ways 
that are ecologically and financially sustainable;
q. Intermediation strategy shall refer to a development strategy that provides 
financial, agricultural, business development and institutional development 
services to the entrepreneurial poor and employers of the poor and provides 
product development and marketing support using the principles of fair trade 
to marginalized producers. A SE engaged in intermediation strategy need not 
be owned by the marginalized stakeholders but provide immediate access to 
services among a critical mass of these marginalized stakeholders;
r. Marginalized shall refer to basic sectors and disadvantaged or vulnerable 
persons or groups who are mostly living in poverty and have little to no access 
to: land and other resources; basic social and economic services, such as health 
care, education, water and sanitation, employment and livelihood 
opportunities, housing, social security, physical infrastructure; and the justice 
system.
As defined in Republic Act (RA) No. 9710, otherwise known as the "Magna Carta 
of Women of 2009," these include, but are not limited to, the following sectors, 
groups, and persons:
(1) "Small Farmers and Rural Workers" refers to those who are engaged 
directly or indirectly in small farms and forest areas, workers in commercial 
farms and plantations, whether paid or unpaid, regular or season-bound. These


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shall include, but are not limited to, (a) small farmers who own or are still 
amortizing for lands that is not more than three (3) hectares, tenants, 
leaseholders, and stewards; and (b) rural workers who are either wage earners, 
self-employed, unpaid family workers directly and personally engaged in 
agriculture, small-scale mining, handicrafts, and other related farm and off-farm 
activities;
(2) 
"Fisherfolk" refers to those directly or indirectly engaged in taking, 
culturing, or processing fishery or aquatic resources. These include, but are not 
to be limited to, women engaged in fishing in municipal waters, coastal and 
marine areas, women workers in commercial fishing and aquaculture, vendors 
and processors offish and coastal products, and subsistence producers such as 
shell-gatherers, managers, and producers of mangrove resources, and other 
related producers;
(3) 
"Urban Poor" refers to those residing in urban and urbanizable slum 
or blighted areas, with or without the benefit of security of abode, where the 
income of the head of the family cannot afford in a sustained manner to provide 
for the family's basic needs of food, health, education, housing, and other 
essentials in life;
(4) 
"Workers in the Formal Economy" refers to those who are employed 
by any person acting directly or indirectly in the interest of an employer in 
relation to an employee and shall include the government and all its branches, 
subdivisions, and instrumentalities, all government-owned and -controlled 
corporations and institutions, as well as nonprofit private institutions or 
organizations;
(5) 
"Workers in the Informal Economy" refers to self-employed, 
occasionally or personally hired, subcontracted, paid and unpaid family workers 
in household incorporated and unincorporated enterprises, including home 
workers, micro-entrepreneurs and producers, and operators of sari-sari stores 
and all other categories who suffer from violation of workers' rights;
(6) 
"Migrant Workers" refers to Filipinos who are to be engaged, are 
engaged, or have been engaged in a remunerated activity in a State of which 
they are not legal residents, whether documented or undocumented;
(7) 
"Indigenous Peoples" refers to a group of people or homogenous 
societies identified by self-ascription and ascription by other, who have 
continuously lived as organized community on communally bounded and 
defined territory, and who have, under claims of ownership since time 
immemorial, occupied, possessed customs, tradition, and other distinctive 
cultural traits, or who have, through resistance to political, social, and cultural 
inroads of colonization, non-indigenous religions and culture, became 
historically differentiated from the majority of Filipinos. They shall likewise 
include peoples who are regarded as indigenous on account of their descent 
from the populations which inhabited the country, at the time of conquest or


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colonization, or at the time of inroads of non-indigenous religions and cultures, 
or the establishment of present state boundaries, who retain some or all of 
their own social, economic, cultural, and political institutions, but who may have 
been displaced from their traditional domains or who may have resettled 
outside their ancestral domains as defined under Section 3 (h). Chapter II of 
Republic Act No. 8371, otherwise known as "The Indigenous Peoples Rights Act 
of 1997" (IPRA of 1997);
(8) 
"Children" refers to those who are below eighteen (18) years of age 
or over but are unable to fully take care of themselves or protect themselves 
from abuse, neglect, cruelty, exploitation, or discrimination because of a 
physical or mental disability or condition;
(9) 
"Senior Citizens" refers to those sixty (60) years of age and above;
(10) 
"Persons with Disabilities" refers to those who are suffering from 
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; and
(11) 
"Solo Parents" refers to those who fall under the category of a solo 
parent defined under Republic Act No. 8972, otherwise known as the "Solo 
Parents Welfare Act of 2000".
Further, as defined in Republic Act No. 11054, otherwise known as the 
"Bangsamoro Organic Act of 2018," marginalized groups shall include 
"Bangsamoro People," to wit:
(12) 
"Bangsamoro People" shall refer to those who, at the advent of the 
Spanish colonization, were considered natives or original inhabitants of 
Mindanao and the Sulu archipelago and its adjacent islands, whether of mixed 
or full blood, shall have the right identity themselves, their spouses and 
descendants, as Bangsamoro.
(13) Further, as articulated in Republic Act. No. 9710, or the Magna Carta of 
Women of 2009, marginalized groups shall include women in all aforementioned 
sectors or groups.
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;
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


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and psycho-social care); and inclusion (assistive device/technology, personal
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assistance, sign language interpreter, accessibility);
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u. Non-Government Organization or NGO shall refer to a duly registered non-
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stock, non-profit organization focusing on the upliftment of the basic or
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disadvantaged sectors of society by providing advocacy, training, community
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organizing, research, access to resources, and other similar activities and, as
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defined under Section 34 (H)(2)(c) of Republic Act No. 8424, as amended,
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otherwise known as the "National Internal Revenue Code of 1997," organized
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and operated exclusively for scientific, research, educational, character-building
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and youth and sports development, health, social welfare, cultural or charitable
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purposes, or a combination thereof, and no part of the net income of which
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inures to the benefit of any private individual;
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V. Peopie's Organization or PO shall refer to a self-help group belonging to the
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basic sectors and/or disadvantaged groups composed of members having a
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common bond of interest who voluntarily join together to achieve a lawful
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common social or economic end;
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w. Persons with Disabiiity or PWD shall refer to individuals with restriction or
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different abilities, as a result of a mental, physical or sensory impairment, to
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perform an activity in the manner or within the range considered normal for a
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human being;
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x Poorsh^W refer to individuals and families whose income fall below the poverty
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threshold as defined by the National Economic and Development Authority
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and/or are deprived of the means to provide in a sustained manner their
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minimum basic needs of food, health, education, housing and other essential
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amenities of life, as defined under R.A. 8425; it may also be the state of
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deprivation - such as poor health, lack of education, inadequate living standard,
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lack of income (as one of several factors considered), disempowerment, poor
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quality of work and threat from violence.
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/. Poverty reduction/alleviation shall refer to overcoming the income, resource,
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and capability deprivation among the poor as defined in the preceding
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paragraph and the marginalized sectors as defined in paragraph (r) hereof;
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z. Private Enterprise shall refer to an organization engaged in a business activity
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organized for the purpose of accumulating profit and whose primary
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stakeholders and beneficiaries are its owners;
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aa. Procuring Entity shall refer to any branch, department, office, agency, or
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instrumentality of the government, including state universities and colleges,
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government-owned and/or - controlled corporations, government financial
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institutions, and local government units procuring Goods, Consulting Services
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and Infrastructure Projects;
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bb. Resource mobiiization strategy shaW refer to a development strategy intended
8


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to generate income from the sale of products and services of a SE in order to
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finance or subsidize the operations of its core development program or
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development interventions among the marginalized sectors;
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cc. SEGFP shaW refer to the SE Guarantee Fund Pool created under this Act;
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dd. Social development shall refer to the continuing process of addressing the
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needs of society, beginning with the people's minimum basic needs, through a
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systematic implementation of socioeconomic programs or packages;
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ee. Social Enterprise Resource Institution shall refer to an organization that
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provides financial and/or other forms of assistance to social enterprises for
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them to become viable and sustainable including but not limited to trainings,
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education and other capacity-building measures, research and development,
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advocacy and other support activities;
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ff. Social entrepreneur shall refer to an innovative individual or institution that
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promotes the creation and operationalization of enterprises or livelihood
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endeavors for those in need or which address social problems and improve
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societal wellbeing;
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gg. Social entrepreneurship entails innovations designed to explicitly improve
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societal wellbeing, housed within entrepreneurial organizations, which initiate,
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guide or contribute to change in society;
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hh. Social Inclusion strategy shall refer to the development strategy that assists
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marginalized groups of people in society who, for reasons of poverty,
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geographical inaccessibility, culture, language, age, sex, gender, migrant status,
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disability or other disadvantage, have not benefited from health, education,
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employment and other opportunities, and who are relegated to the sidelines of
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political persuasion, social negotiation, and economic bargaining in order to
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restore their dignity by not only removing the barriers that limit their access to
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the delivery of basic social services and employment, but more Importantly, by
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nurturing work and other environments that create avenues for their
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participation as productive members of society;
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a. Social Investors shall refer to individuals or institutions that choose to put in
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money to a business endeavor or activity not principally for financial profit but
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to fulfill a social mission which may include poverty reduction, concern for
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environmental protection, strong organizational governance, and a desire for a
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more economically just world;
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jj. Social reform shall refer to the continuing process of addressing the basic
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inequities in society through a systematic, unified and coordinated delivery of
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socioeconomic programs or packages;
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kk. Social value shall refer to the additional benefit to society of procuring a good
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or service, over and above the direct benefit and value of the good or service


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II.
to the procuring entity. Additional benefits may include support for poor 
communities or marginalized groups, advancement of human rights and social 
justice, protection of the environment, and community development.
Transactional services shall refer to enterprise related assistance to the poor 
that involve an exchange of goods or services for money including being 
workers, suppliers, or clients;
mm. Transformational services shall refer to the assistance to the poor as 
conscious agents of change to lift their own selves from poverty and to 
participate in group efforts to improve the quality of life of their community, 
sector or society as a whole. This shall include building the leadership and 
management capacity and role of the poor in social enterprises;
nn. Value chain shall refer to value-adding economic activities that an enterprise is 
interlinked with in the process of producing goods and/or services to serve its 
chosen market. A value chain typically consists of: 1) inbound distribution or 
logistics, 2) manufacturing operations, 3) outbound distribution or logistics, 4) 
marketing and selling, and 5) after-sales service. These activities are supported 
by 6) purchasing or procurement, 7) research and development, 8) human 
resource development, and 9) organizational development. A SE that 
understands and manages its value chain improves its capability to create 
economic, environmental and social values toward improving the position and 
benefits of the poor in the value chain and toward ensuring the viability and 
sustainability of the enterprise.
00. Vulnerable sectors shall refer to groups who are at-risk of any potential event, 
loss or danger.
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 Soda! 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.
In the case of social enterprises organized as stock corporations, partnerships, or sole 
proprietorships, these social enterprises should invest at least 60% of their net 
revenues to sustain the fulfillment of their social mission and provide transformational 
services for the wellbeing of the marginalized sector they serve. They must not be a 
branch, subsidiary or division of a private business enterprise, regardless of the size 
of such private business enterprise, nor may its policies be determined by a private 
business enterprise. Provided, that this shall not preclude an SE from accepting 
subcontracts from large private business enterprises or firms or from joining in 
cooperative or joint-venture activities with other SEs or foundations.
10


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Sec. 5. Qualifications for Benefits and Incentives. - To qualify for the benefits
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and incentives provided for in this Act, the SE shall:
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a. Provide or facilitate the provision of a combination of transactional and/or
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transformational services to improve the position and benefits derived by the
5 
poor from the SE and the value chain or economic subsector where the SE is
6 
located, including becoming worker-owners, supplier-owners, supervisors and
7 
managers, active members and leaders in governing bodies of the SE or its
8 
allied organizations;
9 
b. Invest a substantive part of its surplus, profits or mobilize other resources to
10 
assist the poor to become partners in SE or value chain
11 
management/governance and/or to become partners in community, sectoral
12 
and societal transformation;
13 
c. Pursue a pro-active contribution to resolving social and environmental problems
14 
and generate profit or surplus with due regard to social and environmental
15 
costs;
16 
d. Be engaged in an economic activity within the sectors of agriculture and
17 
fisheries, industry and services which, for purposes of this Act, shall refer to an
18 
activity in any of the economic subsectors;
19 
e. Distribute a substantive part of the wealth created by the enterprise to the
20 
poor in the form of services, dividends and other forms of benefits, and
21 
payments and incentives for products or services rendered consistent with the
22 
principles of fair trade; and
23 
f. Be duly registered with the appropriate agencies as provided under Republic
24 
Act No. 11232, or the "Revised Corporation Code of 2018;" Republic Act No.
25 
9520, or the "Revised the Cooperative Code of the Philippines of 2009;"
26 
Repubiic Act No. 9501, or the "Magna Carta for Micro, Smali and Medium
27 
Enterprises of 2008;" Republic Act No. 9178, or the Barangay Micro Business
28 
Enterprises Act of 2002;" Republic Act No. 10693, or the "Microfinance NGOs'
29 
Act of 2015;" and other relevant laws.
30 
Social enterprise resource institutions may also avail of support from government as
31 
partners for building the capability and sustainability as weli as developing an enabling
32 
environment for social enterprises to flourish, provided they have:
33 
a. a registration as a legal entity in the Philippines
34 
b. a dedicated program supporting social enterprises
35 
c. a track record of at least three (3) years of implementation of a dedicated SE
36 
program
37 
d. at least three (3) qualified social enterprises vouching for their them.
38 
International social enterprise resource institutions and their subsidiaries operating in
39 
the Philippines must partner with a qualified iocai sociai enterprise resource institution
40 
to avaii of government support.
41 
Financial sustainability shall not be a prerequisite for the availment of incentives and
42 
benefits under this Act. Provided that, social enterprises that have 
not achieved
43 
financiai sustainability may be eiigible to avail of the services, assistance and incentives
44 
set forth in this Act by presenting a workable strategy to achieve financial sustainability
45 
over a reasonable period.
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Sec. 6. Formulation of a Poverty Reduction through Social Entrepreneurship 
(PRESENT) Program. — To promote the development of a SE sector with the 
marginalized sectors as primary stakeholders, a comprehensive and fully-integrated 
Poverty Reduction Through Social Entrepreneurship (PRESENT) Program shall be 
formulated, guided by the following principles:
a. Incorporating the PRESENT Program in the government's poverty reduction 
drive as a major sustainable and comprehensive strategy;
b. Rationalizing poverty reduction programs by streamlining and coordinating the 
various anti-poverty programs of the government to reduce inefficiency and 
duplication and to improve the effectiveness of each program;
c. Ensuring people's participation, access to information, and empowerment by 
mobilizing civil society organizations and social movement groups working with 
the poor;
d. Promoting sustainable programs that reduce inequality in incomes across 
economic sectors and increase self-reliance among the poor;
e. Enabling SEs to overcome constraints and to take advantage of opportunities 
for enhancing the position and benefits of the poor in economic subsectors and 
value chains;
f. Recognizing women and men as equal partners in development and nation 
building and ensuring women's and men's equal rights and access to SE's 
resources, gender shall be mainstreamed in the program formulation; and
g. Developing sustainable mechanisms for the provision of quality and accessible 
social services to the poor.
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 
vehicles to ensure that the marginalized sectors benefit the most from sustainable 
subsector development.
PRESENT medium-term and annual development plans shall be formulated 
synchrony with the medium-term development plan of the national government.
in
Sec. 7. Lead Agency. -The Department of Trade and Industry (DTI) shall serve 
as the central planning, coordinating, implementing and monitoring body of the 
program.
In the implementation of this Act, the DTI shall perform the following functions: 
a. Work in close coordination with the Department of Social Welfare and 
Development (DWSD) and the Department of Agriculture (DA) in targeting the 
different sectors intended to be benefitted by the program;
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b.
C.
e.
f.
Disseminate the information relating to the program;
Assist the Social Enterprise Development Council in calling upon the 
Departments and Agencies in fulfilling the objectives of this Act;
Recommend to the SEDC measures and policies for the responsive delivery of 
the commitments under this Act;
Provide seminar-workshops and training programs to educate the target sectors 
about the conditions and other actions pertinent to this Act;
Perform such other functions as may be necessary or incidental to the proper 
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 
of Trade and Industry (DTI). It shall be the primary agency tasked to carry out the 
promotion, growth and development of SEMPs in the country.
Given the complexities of a social enterprise and its constituents, the Council shall be 
composed of the following:
a. Secretary of Trade and Industry, as Chairperson 
Secretary of Agriculture, as Co-Chairperson 
Secretary of Social Welfare and Development, as Vice Chairperson 
SE sector head representative, as Co-Vice Chairperson 
Lead Convener of the National Anti-Poverty Commission 
Director-General of the National Economic Planning and Development Agency 
Vice Chair for Basic Sectors of the National Anti-Poverty Commission 
Secretary of the Interior and Local Government 
Secretary of Finance
Governor of the Bangko Sentral ng Piiipinas 
Secretary of Environment and Natural Resources
l. 
Secretary of Agrarian Reform
m. Secretary of Science and Technology 
Secretary of Labor and Employment 
Secretary of Education 
Secretary of Transportation
Secretary of Information and Communications Technology 
Chairperson of the Commission on Higher Education 
Chairperson of the Cooperative Development Authority 
Chairperson of the Securities and Exchange Commission 
Chairperson of the Philippine Commission on Women 
Director-General of the Technical Education and Skilis Development Authority 
Nine (9) representatives from SEMPS, with three (3) representatives each from 
the main island groupings of Luzon, Visayas, and Mindanao, where at least one 
of the three representatives from each island grouping shall be a woman.
b.
c.
d.
e.
f.
g-
h.
i.
j-
k.
n.
0.
P-
q-
r.
s.
t.
u.
V.
w.
Sec. 9. Powers and Functions. - The Council shall have the following powers 
and functions:
a. Formulate policies and plans to develop and promote, coordinate, synergize, 
integrate, and ensure compatibility and complementation of policies and 
programs for SEs as well as other anti-poverty reduction initiatives consistent
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with national development objectives.
2 
b. Formulate policies and plans to ensure the resilience and preparedness of social
3 
enterprises for disaster risk reduction and management as well as develop
4 
capacities of social enterprises to respond, recover and build back better in the
5 
face disasters and pandemics.
6 
c. Issue certificate of qualification upon determination that the criteria set for this
7 
purpose have been fully satisfied: Provided, That the certificate of qualification
8 
shall be valid only for such period as may be prescribed under the implementing
9 
rules and regulations of this Act;
10 
d. Oversee the successful implementation of the PRESENT Program and other SE
11 
programs;
12 
e. Identify and access sources of financing to expand the SE sector;
13 
f. Monitor and evaluate the performance of programs and projects for appropriate
14 
incentives;
15 
g. Call upon any government agency to carry out and implement programs and
16 
projects identified by the Council and to assist in clarifying issues and finding
17 
resolution to problems that concern their respective offices with respect to the
18 
implementation of the PRESENT Program enunciated under this Act or any
19 
development program for SEs.
20 
h. Call upon people's organizations, non-government organizations, the academe
21 
and other sectors to provide advice on matters pertaining to SEs and conduct
22 
of transactional and transformational services to farmers, producers, workers,
23 
consumers and other stakeholders;
24 
i. Submit annual and other periodic reports to the President and the Congress of
25 
the Philippines through the Congressional Oversight Committee;
26 
j. Promulgate such rules and regulations and exercise such other powers and
27 
functions as may be necessary to carry out the purposes of this Act, including
28 
guidelines for the administration of grant windows provided for in Section 24;
29 
k. Propose the concomitant plantilla positions and structure for the personnel
30 
under it;
31 
I. Manage the funds provided for by this law, including ensuring the funds' growth
32 
where possible;
33 
m. Put in place mechanisms for accountability to marginalized stakeholders being
34 
served
35 
n. Align and synchronize the provision of support programs, benefits and
36 
incentives for SEs provided for in this Act; and
37 
0. Perform such other functions as may be necessary for its effective operations
38 
and the continued enhancement, growth and development of the SE sector.
39 
Sec. 10. Designation of Permanent Representatives to the Council. - Within
40 
30 days from the effectivity of this Act, Cabinet-ranked ex-officio members of the
41 
Council shall designate a permanent representative to the council, to attend the
42 
meetings of the council in cases that the Cabinet-ranked ex officio members cannot
43 
personally attend such meetings. The designated permanent representative of any of
44 
the Cabinet-ranked members of the Council must hold a position not lower than a
45 
bureau director.
46
47 
Sec. 11. Term and Appointment of SE Sector Representatives. - Within 90
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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.
Sec. 12. Secretariat - There is hereby created a Secretariat headed by an 
Executive Director and two (2) Deputy Directors, and supported by staff, whose 
composition shall be determined by the SEDC, to serve as the national, technical and 
administrative secretariat of the Council with the member agencies providing 
additional support staff when the need arises. The Secretariat shall perform the 
following functions:
a. Provide administrative support to the Council, with the assistance of the 
National Economic and Development Authority secretariat in the formulation of 
the PRESENT development programs and plans;
b. Assist the Council in the implementation of the PRESENT development program 
and the annual and medium-term development plan;
c. Assist the council in the performance of its accreditation and screening function;
d. Assist the Council in monitoring the PRESENT development programs and the 
activities of the various concerned government agencies with respect to SEs;
e. Prepare, collate, and integrate all necessary inputs to the Council's yearly report 
on the status of SEs in the country;
f. Submit periodic reports to the Council on the progress and accomplishment of 
its work programs; and
g. Perform other functions that may be assigned and authorized by the Council.
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.
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Sec. 14. National Center for Social Enterprise Development - There shall be 
established a National Center for Social Enterprise Development (NCSED) under the 
Council which shall perform the following functions:
a. Provide SEMPs with capability-training and education through the Social 
Enterprise Capability Building and Sustainability Program created under Section 
17 of this Act.
b. Develop and enhance a research and development system which shall equip 
every SE with innovative and sustainable approaches that ensures improvement 
in the access to basic social services by the poor pursuant to Section 18 of this 
Act;
c. Manage a Social Enterprise Marketing Assistance Program (SMAP) that will 
ensure the generation of the highest possible income for the SEs pursuant to 
Section 19 of this Act.
d. Implement capability building projects approved by the Council;
e. Supervise capability- building projects approved by the Council implemented 
through reputable Social Enterprise Resource Institutions contracted for the 
purpose; and
f. Research on existing policies and programs of other countries for benchmarking 
purposes (e.g. support system, ecosystem, programs, regulations).
The NCSED shall be headed by the Executive Director of the Council Secretariat. It 
shall maintain a multi-sectoral, multi-disciplinary pool of experts including those from 
the academe, practicing professionals, business and industry, youth, women and other 
concerned sectors, who shall be screened according to the qualifications set by the 
Council.
The NCSED shall coordinate with the University of the Philippines Institute for Small 
Scale Industries (UP ISSI), the Technical Education and Skills Development Authority 
(TESDA), the Department of Transportation (DOTr), Department of Information and 
Communications Technology (DICT), the Philippine Commission on Women (PCW), 
civil society organizations, including women's organizations, and other relevant 
agencies, state universities and colleges in implementing its programs.
Sec. 15. Personnel. - Subject to the civil service laws, rules and regulations, 
the Council is authorized to select, appoint, employ, and fix the compensation of the 
officers and employees of the Secretariat and the NCSED as shall be necessary to carry 
out its functions.
Sec. 16. Role of LGUs in SE Development - LGUs shall be enjoined to 
incorporate viable SE Development Plans in their local development planning and to 
collaborate with SEMPs. The Gender and Development (GAD) Fund of LGUs may be 
used toward the design and implementation of SE development plans at the local level.
Grants from government agencies, such as the Department of Interior and Local 
Government (DILG), for civil society toward local development may also be used to 
support social enterprises.
Sec. 17. Social Entrepreneurship Education in Schools. - Toward strategically
16


1 
developing the nation's human resource capability in social entrepreneurship, the
2 
Department of Education (DepEd) and the Commission on Higher Education (CHED)
3 
shall cause the integration of SE content and inclusion of SE courses in the curricula
4 
at all levels, especially in the secondary and tertiary levels. This shali be part of the SE
5 
Capability and Sustainability Program stated in this Act.
6 
A continuing sociai enterprise education program for out-of-schooi youth and aduits
7 
shall likewise be developed and undertaken. The social entrepreneurship education
8 
program for primary and secondary education shall include information regarding:
9 
a. Social issues and civic ways of addressing them;
10 
b. The producer as a steward of natural resources;
11 
c. The consumer as a responsible member of society and their responsibility to
12 
develop critical awareness which is the responsibility to be alert and questioning
13 
about environmental and social impacts of the goods and services they use;
14 
d. Sociai concern which is the responsibility to be aware of the impact of their
15 
consumption to society, especially to the disadvantaged;
16 
e. Environmental awareness which is the responsibiiity to understand the
17 
consequences of their use of natural resources, consumption, recognizing their
18 
individual and social responsibility to conserve natural resources for future
19 
generations; and
20 
f. Gender justice, or the full equality and equity between men and women in all
21 
spheres of life, resulting in women jointly, and on an equal basis with men,
22 
defining and shaping the policies, structures, and decisions that affect their
23 
iives and society as a whole.
24 
All higher learning institutions and vocational schools are mandated to include a
25 
subject on social entrepreneurship in their social studies program or in their business,
26 
commerce, or economics courses.
27 
CHAPTER III
28 
DEVELOPMENT OF SOCIAL ENTERPRISES
29 
Sec. 18. SE Capability Building and Sustainability Program; Creation of SE
30 
Development Fund. - There is hereby established a SE Capability Building and
31 
Sustainabiiity Program whose primary objective is to guarantee the viability and
32 
sustainability of SEMPS through activities that advance, in general, both
33 
transformational services and transactional services. 
This program shall include
34 
training in social entrepreneurship development institutional strengthening, human
35 
resource competency and skills training, business pianning and advisory services,
36 
upgrading of accounting and auditing systems, technicai assistance for the installation
37 
or improvement of management information systems, technoiogy intervention,
38 
technology incubation/commercialization, market studies, and product development
39 
competitiveness, business matching activities, trade fairs and missions, policy
40 
advocacy, gender and deveiopment, resiliency, and other related activities.
41 
The SE Capability Building and Sustainability Program shall likewise include the
42 
establishment of an insurance system for SEs affected by natural calamities in line
17


1 
with the National Framework Strategy on Climate Change 2010-2022 as provided for
2 
under Republic Act No. 9729, otherwise known as the "Climate Change Act of 2009,"
3 
and Republic Act No. 10121, otherwise known as the "Philippine Disaster Risk
4 
Reduction and Management Act of 2009."
5 
For this purpose, there is hereby created and established an SE Development Fund
6 
(SEDF) in the initial amount of Three Billion Pesos (P3,000,000,000.00) to be
7 
administered by the Council chargeable against the General Appropriations Act
8 
following the year of the effectivity of this Act. The SEDF shall likewise be funded with
9 
one percent (1%) of the following: 2) collected taxes pursuant to the implementation
10 
of Republic Act No. 10351, otherwise known as the "SIN Tax Act of 2012;" 3) earnings
11 
derived by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) from its
12 
collections; and 4) equity contributions of participating government financial
13 
institutions. Voluntary contributions, grants, gifts from both local and foreign sources
14 
as may be accepted by the Council shall also form part of the SEDF.
15 
The Social Enterprise Development Fund may also come from programs or projects
16 
implemented by national government agencies funded by development assistance
17 
from bilateral or multilateral development partners.
18 
Additional funding and appropriation shall be provided by the Office of the President
19 
as the needs arise during calamities, pandemics and other extra-ordinary
20 
circumstances, subject to audit by the Commission on Audit. Social enterprise resource
21 
institutions may receive funds for social enterprise programs.
22 
In addition to the SEDF, the 5% allocation for Gender and Development (GAD)
23 
programs of government agencies and local government units as prescribed in
24 
Republic Act. No. 9710, otherwise known as the "Magna Carta of Women Act of 2009,"
25 
may be accessed by social enterprises which are women-led or contribute to women's
26 
economic empowerment. The allocation can help build the capacity of such
27 
enterprises, including further organizing women-led cooperatives and groups to
28 
improve women's economic participation.
29 
The SEDF shall be used for the purposes provided herein. Any undisbursed funds from
30 
the preceding year shall form part of the disbursable portion of the SEDF in the
31 
following year.
32 
Also to this end, there is hereby created a Social Enterprise Guarantee Fund Pool
33 
(SEGFP) which shall be comprised of the five percent (5%) of the preceding year
34 
budget surplus of the government-owned and controlled corporations and government
35 
financial institutions as contribution to the SEGFP in accordance with relevant laws,
36 
charters and by-laws, in addition to voluntary contributions, grants and gifts from both
37 
local and foreign sources as may be accepted by the Council.
38 
The SEGFP shall be administered by the Council and shall be used to mitigate the risks
39 
involved in SE sector lending, facilitating the provision of credit therefor. The fund
40 
shall be placed in trust with the Land Bank of the Philippines for the purpose of
41 
providing guarantee cover to participating financial institutions and other parties in
18


1 
extending financing to SEs: Provided, that the fund may also be used to cover the
2 
performance bond of SEs in government procurement.
3 
The Council, in coordination with the Land Bank of the Philippines, shall draw up the
4 
mechanics and administrative arrangements and issue the implementing guidelines for
5 
the fund pool.
6 
Sec. 19. Cash Incentives for Persons with Disabiiities (PWD). - To level the
7 
playing field and recognize the circumstances of start-up SEs primarily employing
8 
PWDs, the SEDF created in Section 18 of this Act shall provide a cash incentive for
9 
every PWD, in accordance with Republic Act No. 7277, otherwise known as the "Magna
10 
Carta for Disabled Persons Act of 1992," and other marginalized sectors as may be
11 
provided by this law, representing at least twenty five percent (25%) of the daily
12 
minimum wage, until such time that the said 
SE is able to achieve financial
13 
sustainability.
14 
Sec. 20. Sociai Enterprise Recovery and Rehabiiitation Fund. - To prepare for
15 
or respond to climate risks and impacts, disaster vulnerabilities and hazards,
16 
humanitarian emergencies (including those arising from armed conflict), epidemics,
17 
financial crises or economic shocks, and other such events, a Social Enterprise
18 
Resilience Fund is hereby established to build the resilience of social enterprises. This
19 
shall include stimulus grants, climate adaptation initiatives, risk insurance, and other
20 
such facilities and products to improve the ability of SEs to withstand shocks and
21 
stresses. The Fund shall be lodged with the Department of Trade and Industry and
22 
shall be managed by the SEDC.
23 
Sec. 21. Social Enterprise Research and Development System. -The Council, in
24 
coordination with the Department of Science and Technology (DOST), NEDA, DTI, and
25 
other appropriate agencies and research institutions, shall develop and enhance a
26 
research and development system that:
27 
a) Provides studies on opportunities for poverty reduction and SE development in
28 
key economic subsectors and other inputs for the Council to undertake strategic
29 
planning for its PRESENT Program;
30 
b) Equip SEs and support institutions with technologies that are appropriate for
31 
enhancing the participation and benefits of the poor in various economic
32 
subsectors; and,
33 
c) Equip SEs and support institutions with innovative and sustainable approaches
34 
to improve access of the poor to quality basic social services.
35 
This system must be based on gender analysis, or, as defined in this bill, the systematic
36 
analytical process based on sex-disaggregated and gender information.
37 
Sec. 22. Social Enterprise Marketing Infrastructure Development - The
38 
Council shall promote the development and expansion of local and foreign markets for
39 
the products and services of SEMPs, guided by the principles of fair trade. Consistent
40 
with this, the Council shall:
41 
a) Establish a SE Marketing Assistance Program (SMAP) that will assist SEMPs
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match supply with demand in both domestic and foreign markets, as well as 
promote SE products and services through tri-media, trade fairs and trade 
missions;
b) Develop, install and sustain a SE market information system (SMIN) with the 
assistance of the DTI and DICT which shall be called the SE Marketing 
Information Network (SMIN).
The SMIN shall be set up from the level of the municipal and provincial LGUs, the 
regional and up to the Council level within one (1) year from the approval of this Act, 
taking into account existing information networks such as the internet and using a 
dedicated website for the purpose, to ensure linkage of the SEs with the government 
and its various departments, agencies, bureaus and instrumentalities, the local and 
domestic markets, as well as research institutions. The Council shall provide technical 
assistance in setting up the SMIN at the local and regional levels.
All government departments, agencies, bureaus, research institutions, as well as the 
LGUs shall consolidate and continuously update all relevant information and data that 
would be of use to SEs on a periodic basis and make such data available on a dedicated 
website on the internet. Data shall be gender-disaggregated as far as possible. 
Compliance with the relevant laws, rules, and regulations concerning data privacy shall 
be ensured.
The SMIN shall provide information and marketing services related to products of 
SEMPS which shall include the following:
a. Supply data;
b. Demand data;
c. Price and Price trends;
d. Product standards;
e. Directory of, but not limited to SEs, traders, key market centers, 
processors and business institutions both at the national and local levels;
f. Information and technology generated from research institutions;
g. International, regional and local market forecasts; and
h. Resource accounting data.
CHAPTER IV
FINANCING AND BENEFITS
Sec. 23. Hybrid Financing. - Social Enterprises shall be supported through 
hybrid financing to enable them to provide a combination of transactional and 
transformational services to the marginalized sectors, groups or persons they serve. 
Given the unique nature of SEs as wealth-creating organizations that pursue their 
social mission to improve societal wellbeing in ways that are ecologically and financially 
sustainable, they need to be supported through hybrid financing that entails a 
combination of grants with loans and other financial instruments.
Sec. 24. Speciai Credit Windows with non-coiiateraiized bans. - In addition to 
the special credit windows provided for the promotion of microfinance as provided 
under Section 16 of Republic Act No. 8425, the Land Bank of the Philippines,
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Development Bank of the Philippines, Philippine Postal Bank, and Al Amanah Bank, 
and other public or government-owned banks are hereby mandated to set aside at 
least ten percent (10%) of their total loan portfolio based on their balance sheet in 
the end of the preceding quarter over a period of five (5) years and open a special 
credit window for qualified SEs.
For a period of eight (8) years from the date of the effectivity of this Act, all other 
lending institutions as defined under the Central Bank Act or the General Banking Act, 
as amended, shall likewise set aside at least ten percent (10%) of their total loan 
portfolio that will not require a collateral based on their balance sheet as of the end 
of the previous quarter and make the same available for SEs through a special credit 
window. The BSP, in consultation with the Council, shall formulate the rules for the 
effective implementation of this provision: Provided, That the purchase of government 
notes, securities and other negotiable instruments shall not be deemed compliance 
with the foregoing provision.
The Council shall establish a system to monitor all loan applications of SEs in order to 
account for the absorptive capacity of the SE sector.
The BSP shall require lending institutions covered by this Act to furnish the Council on 
a quarterly basis a regular report on their respective compliance with the above 
provisions on the mandatory credit allocations for SEs and shall act immediately on 
the Council's reports of non-compliance therewith.
The special credit window for SEMPS shall bear interest lower than the market rate 
and shall have longer terms of payment and waiver of applicable fees.
Sec. 25. Special Credit Window Purposes. - The special credit window provided 
under Section 24 of this Act shall be intended for the following purposes:
a. Credit line for business development loan or working capital loan to cover the 
operational and management expenses of a start-up or existing business or 
income generating project, including receivable financing or purchase of 
additional inventory, soft or intangible investments such as trade fair 
participation or acquisition of software or franchise development packages;
b. Fixed assets financing to cover acquisition of fixed assets like machineries and 
equipment, motor vehicle, or acquisition of lot for project site or construction 
of a plant and building and the improvement thereof;
c. Value chain financing to cover any of the value chain activities such as 
production, processing, and marketing;
d. Domestic letter of credit or trust receipt to provide a stand-by credit facility for 
the SE borrower for the purchase of product inputs, equipment, machinery, 
implements, and spare parts, whereby payment of which is guaranteed and to 
be made to the seller by the lending institution, provided all documents conform 
with the terms and conditions of the credit; and
e. Revolving Credit Line for re-lending to finance the livelihood project 
requirements of end-borrowers.
f. A special credit line (X% of total loan portfolio) for women-led SEs or SEs that 
support women (i.e., 50%), particularly those in the agricultural and informal
21


1 
sectors. Women shall have no barriers to economic participation as provided
2 
for in Republic Act No. 7192, otherwise known as the "Women in Development
3 
and Nation Buiiding Act of 1992."
4 
Sec. 26. Grant facility. The SE Development Fund in Section 18 shall provide
5 
grants to qualified social enterprises and resource institutions for the performance and
6 
conduct of their mission toward poverty reduction, sustainable development,
7 
promotion of gender and social justice, environmental conservation, climate action,
8 
and improvement in economic welfare of the poor and marginalized sectors.
9 
There will be three windows under this fund facility, namely: capacity-building grant;
10 
start up enterprise grant; and ecosystem-building grant. The SE Council shall
11 
formulate the guidelines for the management and implementation of grant assistance.
12 
Sec. 27. Tax Credits. - SEDC will develop a system of valuation of social,
13 
economic and ecological contributions of social enterprises and the social impact on
14 
the marginalized sectors they serve, as bases for tax credits from the government.
15 
Sec. 28. Preferential Rights. - Without prejudice to preferential rights already
16 
available to specific enterprises or organizations under other laws, qualified SEMPs
17 
shall be accorded a preferential right in the procurement process and in the
18 
implementation of procurement contracts by the government in all its branches,
19 
departments, agencies, subdivisions, and instrumentalities, including in the
20 
government-owned and controlled corporations and local government units.
21 
Such a preferential right is anchored not just in economic efficiency but in social values
22 
which provide long-term benefits to society. As defined in this bill, social value refers
23 
to the additional benefit to society of procuring a good or service, over and above the
24 
direct benefit and value of the good or service to the procuring entity.
25 
These social values include, inter alia, poverty reduction, sustainable development,
26 
environmental conservation, climate action, community development, and gender and
27 
social justice. As such, the determination of government procurement shall factor in
28 
social values.
29 
Such a preferential right, however, shall not be prejudicial to the interests of the
30 
government and the public.
31 
SEMPs shall be given priority and preference in the following procurement processes:
32 
a. Direct contracting as provided under Section 50 of Republic Act No. (RA) 9184,
33 
otherwise known as the "Government Procurement Reform Act of 2002," may
34 
be resorted to if the contracting party selling the goods and services required
35 
by the procuring entity is a social enterprise as qualified by the Council.
36 
b. Shopping as provided under Section 52, paragraph (a) of RA 9184 may be
37 
resorted to when there is an unforeseen contingency requiring immediate
38 
purchase: Provided, That the procurement of the goods and services shall be
39 
first obtained from the social enterprise within the area of operation of the
40 
procuring entity which is duly qualified by the Council as having the capacity
41 
to supply the required goods and services: Provided, further. That the amount
22


1 
shall not exceed Five hundred thousand pesos (P500,000.00).
2 
c. Shopping as provided in Section 52, paragraph (b) of RA 9184 may be resorted
3 
in the procurement of ordinary or regular office supplies and equipment not
4 
available in the Procurement Service involving an amount not exceeding Two
5 
hundred fifty thousand pesos (P250,000.00): Provided, That the Procurement
6 
does not result in splitting of contracts: Provided, further, That a price quotation
7 
shall be first obtained from a social enterprise as qualified by the Council as
8 
having the capacity to furnish or provide the required office supplies and
9 
equipment. Only in the event of failure of submission or absence of SE price
10 
quotation that at least three (3) price quotations from other bona fide suppliers
11 
shall be obtained.
12 
d. Negotiated procurement as provided under Section 53 of RA 9184 may be
13 
allowed when the goods or services subject of the procurement may be
14 
obtained from a SE within the area of operation of the procuring entity which
15 
is duly qualified by the Council as having the capacity to supply the required
16 
goods and services.
17 
e. Social enterprises established by and for Persons with Disability (PWD)shall be
18 
qualified under the Department of Education's Supply and Delivery of Furniture
19 
for Elementary, Junior and Senior Fligh Schools under the 10% Allocation for
20 
Cooperatives of Persons with Disability.
21 
f. A procuring entity, when applicable, shall have at least one member
22 
representing SEMPS.
23 
Qualified SEMPs under this Act shall be entitled to a share of at least twenty percent
24 
(20%) of the total procurement value of goods and services supplied to the
25 
government, its bureaus, offices and agencies annually. Provided, That, the DBM shall
26 
direct line agencies of government to include at least 10% of its annual budget for
27 
Maintenance and Other Operating Expenses and Capital Outlay specifically for goods
28 
procured and services contracted from social enterprises producing and offering such
29 
goods and services.
30 
Sec. 29. Insurance for Sociai Enterprises. The Insurance Commission shall
31 
issue the necessary rules and regulations and implement measures to ensure that the
32 
insurance industry shall provide insurance products, both life and non-life, for social
33 
enterprises and their stakeholders among the poor. Furthermore, SEMPS shall be
34 
assisted to become eligible and effective insurance providers to their clients and
35 
constituents.
36 
Sec. 30. Support for Social Investors and SE Resource Institutions. - The
37 
government shall develop a program that fosters a community of social investors and
38 
resource institutions supportive of social enterprises.
39 
Sec. 31. Appropriations. - The amount necessary to implement the provisions
40 
of this Act shall be charged against the current year's appropriation of the Office of
41 
the President. Thereafter, such sums as may be necessary for its continued
42 
implementation shall be included in the GAA. The budget requirements for the
43 
implementation of this Act for cooperating agencies shall be incorporated in their
44 
respective budgets.
23


1 
Sec. 32. Pena! Clause. - The penalty of imprisonment for not less than six (6)
2 
months but not more than two (2) years or a fine of not less than two hundred fifty-
3 
thousand (P250,000) or both imprisonment and fine, at the discretion of the court,
4 
shall be imposed upon any person, who, intentionally or by gross negligence, fails to
5 
provide the benefits, rights and incentives granted to SEs in violation of this Act or
6 
perform any act in violation of its provisions.
7 
If a corporation is found to have violated the provisions of this Act, the officers,
8 
directors, members or trustees shall be held liable. If the violation was committed by
9 
a government official or employee, such official or employee shall be terminated from
10 
the service with forfeiture of all the benefits due him in addition to the fine and/or
11 
imprisonment mentioned above.
12 
Corporations and other juridical entities, financial or otherwise, found representing
13 
themselves as a SE shall be caused to pay double the benefits it reaped from this
14 
program through the taxes it was able to save when it represented itself as a SE. In
15 
addition, the officers of the juridical entity who represented itself as a SE shall be liable
16 
for a fine of P500,000.00 or imprisonment for not less than two (2) years or both fine
17 
and imprisonment at the discretion of the court.
18 
Sec. 33. Non-Compliance with the Mandatory Allocation of Credit Resources. -
19 
Administrative sanctions including a fine of not less than Five hundred thousand pesos
20 
(P500,000.00) shall be imposed by the Banko Sentral ng Pilipinas upon any banking
21 
or lending institution who fails to provide the credit allocations granted to SE in
22 
violation of Section 19 of this Act.
23 
Sec. 34. Joint Congressional Oversight Committee. - Upon the effectivity of
24 
this Act, a Congressional Oversight Committee, hereafter referred to as the PRESENT
25 
Oversight Committee is hereby constituted. This Committee shall set the overall
26 
framework to review the implementation of this Act. It shall likewise determine
27 
inherent weaknesses in the law and recommend necessary remedial legislation or
28 
executive measures.
29 
The PRESENT Oversight Committee shall be composed of fourteen (14) members with
30 
the chairpersons of the Committee on Trade and Industry of the House of
31 
Representatives, and the Committee on Trade, Commerce and Entrepreneurship of
32 
the Senate as Co-Chairpersons; and six (6) members from each House, to be
33 
designated by the Speaker of the House of Representatives, and the Senate President,
34 
respectively.
35 
For purposes of determining remedial legislation, the PRESENT Oversight Committee
36 
shall, within six (6) years after the effectivity of this Act, conduct a sunset review which
37 
shall include a systematic evaluation of the impact of this Act, accomplishments of the
38 
program, and the performance of its implementing agencies.
39 
Sec. 35. Separability. -If any provision or part of this Act is declared invalid or
40 
unconstitutional, the remaining parts or provisions not affected shall remain in full
24


1 
force and effect.
2 
Sec. 36. Implementing Rules and Regulations. - Within ninety (90) days from
3 
the effectivity of this Act, the Department of Trade and Industry shall, in consultation
4 
and coordination with the concerned government agencies and social enterprise
5 
sector, promulgate the necessary rules and regulations for the effective
6 
implementation of this Act.
7 
Sec. 37. Repealing Clause. - For purposes of this Act, Section 11 of RA 8425
8 
and Sections 50, 52 and 53 of RA 9184 which are inconsistent with this Act are hereby
9 
deemed amended. All other laws, executive orders, presidential decrees, rules and
10 
regulation or parts thereof inconsistent with any provisions of this Act are hereby
11 
repealed, amended or modified accordingly.
12 
Sec. 38. Effectivity. - This Act shall take effect fifteen (15) days from its
13 
publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
25