TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL 29 P2.10
SENATE
762
S. No
RHCEi'
Introduced by Senator Bam Aquino
AN ACT
ESTABLISHING A PROGRAM TO FORMALIZE MICRO AND SMALL 
ENTERPRISES THROUGH SIMPLIFIED REGISTRATION, TRANSITIONAL 
SUPPORT, AND ACCESS TO GOVERNMENT ASSISTANCE
EXPLANATORY NOTE
A large portion of the Philippine economy continues to operate in the informal 
sector. Many enterprises are unregistered, unregulated, and often excluded from the 
full benefits of government support and protection. These informal businesses, while 
vibrant and entrepreneurial, face barriers to growth and resilience due to their lack of 
legal recognition, limited access to finance, and vulnerability to economic shocks.
The proposed measure aims to make formalization an attractive, accessible, 
and beneficial pathway for our country's micro and small enterprises. By streamlining 
registration through a Simplified and Unified Registration System, reducing upfront 
costs, and offering a package of transitional support, the bill encourages informal 
businesses to take the leap into the formal economy.
Under this proposed measure, businesses that register under the Micro and 
Small Enterprise Formalization Program will benefit from:
• 
A one-time tax amnesty and a presumptive tax rate of one percent on gross sales 
for five years;
• 
Subsidized contributions to social protection programs like SSS, PhilHealth, and 
Pag-IBIG;
• 
A limited exemption from the minimum wage law to ease early employment costs.
In turn, formalization will be required for access to government sen/ices, 
ensuring that public support goes to businesses that are part of the formal economy 
and committed to long-term growth and compliance.
This bill builds on the principle that economic inclusion must be matched by 
ease of doing business and a supportive policy environment. It also advances the goals


of poverty reduction, job creation, and resilient enterprise development, all while 
strengthening the tax base and expanding the reach of government safety nets.
When we make it easier and more worthwhile for informal businesses to 
formalize, we create a win-win scenario: for entrepreneurs, for workers, and for our 
country's economy as a whole.
In view of the foregoing, the passage of this bill is earnestly sought.


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JlJL 29 P2:10
SENATE
s. NO. 762
RFCEi . r: J 6'
Introduced by Senator Bam Aquino
AN ACT
ESTABLISHING A PROGRAM TO FORMALIZE MICRO AND SMALL 
ENTERPRISES THROUGH SIMPLIFIED REGISTRATION, TRANSITIONAL 
SUPPORT, AND ACCESS TO GOVERNMENT ASSISTANCE
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. -This Act shall be known as the "Business Formalization,
2 
Integration and Transition Act of 2025."
3 
Sec. 2. Declaration of Policy. - It is the declared policy of the State to foster a
4 
vibrant and inclusive economy by encouraging the integration of informal enterprises
5 
into the formal sector. The State shall simplify registration processes, reduce the costs
6 
of formalization, and provide a package of transitional support to make formalization
7 
an attractive and beneficial pathway for micro and small enterprises.
8 
Sec. 3. The Micro and Small Enterprise Formalization Program. - There is
9 
hereby established a Micro and Small Enterprise Formalization Program, hereinafter
10 
referred to as the "Program," to be led by the Department of Trade and Industry
11 
(DTI). The Program shall be open to all existing unregistered micro and small
12 
enterprises.
13 
Sec. 4. Simplified and Unified Registration. - The DTI, in coordination with the
14 
Anti-Red Tape Authority (ARTA), shall establish a Simplified and Unified Registration
15 
System for enterprises applying under the Program. This system shall:


1 
(a) Be accessible online through the Philippine Business Hub and physically
2 
through all Negosyo Centers nationwide.
3 
(b) Utilize a single, simplified application form that simultaneously registers the
4 
enterprise with the DTI or Securities and Exchange Commission (SEC), the Bureau of
5 
Internal Revenue (BIR), the concerned Local Government Unit (LGU) for the business
6 
permit, the Social Security System (SSS), the Philippine Health Insurance Corporation
7 
(PhilHealth), and the Home Development Mutual Fund (Pag-IBIG Fund).
8 
(c) Impose a single, consolidated registration fee not to exceed One Thousand
9 
Pesos (PhP 1,000.00).
10 
Sec. 5. Transitional Support Regime. - An enterprise that formalizes under this
11 
Program shall be entitled to the following benefits for a period of five (5) years from
12 
its date of registration:
13 
(a) Tax Amnesty and Presumptive Taxation. - The enterprise shall be granted
14 
a one-time amnesty from all tax liabilities for prior periods of informal operation. For
15 
the three-year transitional period, it shall be subject to a simplified and presumptive
16 
tax rate of one percent (1%) of its gross annual sales in lieu of all other national and
17 
local taxes.
18 
(b) Subsidized Social Security Contributions. - The National Government shall
19 
subsidize fifty percent (50%) of the employer's share of the contributions to SSS,
20 
PhilHealth, and Pag-IBIG Fund for the owner and up to five (5) employees.
21 
(c) Exemption from Minimum Wage Law. - Enterprises registered under this
22 
Program shall be exempt from the coverage of the minimum wage law, provided that
23 
this exemption shall only apply to the first five (5) employees hired.
24 
Sec. 6. Linking Formality to Government Support. - Upon the effectivity of this
25 
Act, formal registration shall be a mandatory requirement for any MSME to access any
26 
form of government assistance, including but not limited to:


1 
(a) Financing programs from the Small Business Corporation and other
2 
Government Financial Institutions.
3 
(b) Participation in government-sponsored trade fairs, marketing events, and
4 
training programs.
5 
(c) Eligibility to participate in government procurement under Republic Act No.
6 
9184 and its amendments.
7 
Sec. 7. Appropriations. -The amount necessary to implement the provisions of
8 
this Act shall be charged against the current year's appropriations of the Department
9 
of Trade and Industry (DTI). Thereafter, such amounts as may be necessary for the
10 
continued implementation of this Act shall be included in the annual General
11 
Appropriations Act (GAA).
12 
Sec. 8. Implementing Rules and Regulations. - Within ninety (90) days from
13 
the effectivity of this Act, the Department of Trade and Industry (DTI), in coordination
14 
with the Anti-Red Tape Authority (ARTA), Bureau of Internal Revenue (BIR),
15 
Department of the Interior and Local Government (DILG), Securities and Exchange
16 
Commission (SEC), Social Security System (SSS), Philippine Flealth Insurance
17 
Corporation (PhilFlealth), Flome Development Mutual Fund (Pag-IBIG Fund),
18 
Department of Labor and Employment (DOLE), and other concerned agencies, shall
19 
promulgate the necessary rules and regulations for the effective implementation of
20 
this Act.
21 
Sec. 9. Separability Clause. - If any provision of this Act is declared
22 
unconstitutional or invalid, the other provisions not affected thereby shall remain in
23 
full force and effect.
24 
Sec. 10. Repeating Clause. - All laws, decrees, executive orders, rules and
25 
regulations, and other issuances inconsistent with this Act are hereby repealed or
26 
modified accordingly.


1 
Sec. 11. Effectivity. - This Act shall take effect fifteen (15) days after its
2 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,