LE REP ESSN

RECEIVED ”
DATE _Q3 JUL 2005

iy
Republic of the Philippines (ey
HOUSE OF REPRESENTATIVES =
Quezon City

TWENTIETH CONGRESS,
First Regular Session

HOUSE BILL NO. 1250

INTRODUCED BY REP. MAXIMO JR. Y. DALOG

EXPLANATORY NOTE

With the increasing number of families below the poverty line’ worsened
by the effects of the global pandemic, there is a need to develop a concrete and
sustainable solution to alleviate poverty in the country.

One of the promising solutions which have been identified to address
development gaps, is the capitalization of the potential of social enterprises.?

Ina study published in 2017, it concluded that social enterprises are playing
a vital role in the socio-economic amelioration of the poor and marginalized
sectors in the country. In fact, in 2016, social enterprises created more than
17,000 jobs and generated US$ 21 million in value.*

However, despite the foregoing, there is no existing policy nor legislation
specifically targeted to benefit them® and recognize their social value.

This bill seeks to address the lack of enabling policy which specifically
focuses on creating an environment which encourages the development, growth

} Claire Dennis S. Mapa, Proportion of Poor Filipinos Recorded at 18.1 Percent in 2021, available at:
https://psa.gov.ph/poverty-press-releases/nid/167972 (last accessed: November 10, 2022).

? ADB Briefs, Road Map for Strengthening Social Entrepreneurship in the Philippines, p. 2, available at:
https://www.adb.org/sites/default/files/publication/514471/adb-brief-112-social-entrepreneurship-road-map-
philippines.paf (last accessed: November 10, 2022)

3 British Council, European Union and United Nations Economic and Social Commission in Asia and the Pacific (UN
ESCAP). Reaching the Farthest First: The State of Social Enterprises in the Philippines, p. 15, available at:
https://www. britishcouncil.ph/sites/default/files/social report bc fa 102517 web-compressed.pdf (lost
accessed: November 10, 2022)

“1d, p. 14,

5 Supra note 2



and sustainability of social enterprises by providing programs, financial support,
resources and incentives.

In view of the foregoing, approval of the bill is earnestly sought.

MAXIMO JI


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 1250

INTRODUCED BY REP. MAXIMO JR. Y. DALOG

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled.

AN ACT PROMOTING THE GROWTH AND DEVELOPMENT OF SOCIAL
ENTERPRISES AS A MEANS TO ALLEVIATE POVERTY, ESTABLISHING
FOR THE PURPOSE THE POVERTY REDUCTION THROUGH SOCIAL
ENTREPRENEURSHIP (PRESENT) PROGRAM, CREATING THE SOCIAL
ENTERPRISE DEVELOPMENT COUNCIL, PROVIDING SUPPORT,
BENEFITS AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES

CHAPTER |
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “Poverty
Reduction through Social Entrepreneurship Act.”

SECTION 2. Statement of Policy. — As provided in the Constitution of the
Republic of the Philippines, it is the declared policy that:

a) The State shall 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;

b) The State shall provide social justice in all phases of national development
and to value the dignity of every human person and guarantees full respect
for human rights.

c) The State shall ensure that the national economy provides for a more
equitable distribution of opportunities, income, and wealth; a sustained

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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.

d) The State affirms the role of women in nation building and ensures the
fundamental equality of men and women before the law.

e) 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.

f) The State shall protect Filipino enterprises against unfair foreign
competition and trade practices.

g) The State recognizes the important role of enterprises in the economy as
the major agent of development, creating off-farm employment
opportunities and providing transitional means for improving people’s
livelihoods.

Towards this end, the State shall pursue a poverty reduction program that
promotes an environment conducive to the development and growth of a vibrant
social enterprise sector engaged in poverty reduction, and economic and social
development. The State shall likewise ensure the provision of free technical and
financial assistance, incentives and other services that will enable them to
develop into viable and vital anti-poverty agents, and a strong social
entrepreneurship movement which will be instrumental in reducing poverty in the
country.

Further, it shall empower the marginalized sectors as primary stakeholders
in social enterprises, establish mechanisms essential to realizing their potential
and achieving their full growth, and extend the assistance necessary for their
advancement.

SECTION. 3. Definition of Terms. — As used in this Act:

a) Social Enterprise (SE) shall primarily refer to a social mission-driven
organization that creates wealth while contributing to social wellbeing and
ecological sustainability. It can take the form of non-stock, non-profit
corporations including NGOs, POs, Foundations, Associations;
cooperatives; and sole proprietorships, partnerships, and stock
corporations.

A social enterprise explicitly declares and pursues poverty reduction or
improving the quality of life of specific segments of the marginalized and
vulnerable sectors as its principal objective. In addition, it engages and
invests in the poor in order for them to become effective workers, suppliers,
clients and/or owners, and ensures that a substantive part of the wealth
created by the enterprise is distributed to them. This includes efforts to
help workers in the informal sector transition to be stakeholders of the
formal economy. In addition to reinvesting its surplus or profits back toward

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the fulfillment of its social mission in a sustainable way, a social enterprise
also uses its surplus or profits and mobilizes other resources to assist the
poor to become partners in social entrepreneurship or value chain
management/ governance and to become partners in community, sectoral
and societal transformation.

b) Assets shall refer to all kinds of properties, real or personal, owned by the
social entrepreneur as defined in paragraph (ff) of this Section and used for
the conduct of its business: Provided, that for the purpose of exemption
from taxes and to benefit from other incentives under this Act, this term shall
mean all kinds of properties, real or personal, owned and/or used by the SE
for the conduct of its business;

c)

Capability building shall refer to the process of enhancing the viability and
sustainability of Social Enterprises. It pertains to 1) education, training,
coaching and other learning events such as, but not limited to, study tours;
2) technical, consultancy and advisory services; 3) assistance in
organizational systems development; 4) technology incubation,
development and dissemination; 5) value chain and subsector
development; 6) conduct of SE trade fairs and missions; 7) networking and
Policy advocacy initiatives, and other such activities that enable SEs to be
effective and efficient vehicles for poverty reduction. The term capability
building precludes the grant of any loan or equity funds to the SE and shall
in no way refer to the provision of equity investments, seed funding,
partnership's seed funds, equity participation, start-up funds or any such
activity that connotes the infusion of capital or funds from the government
or from the SE Development Fund created under Section 18 of this Act;

d) Civil society organizations shall refer to private, voluntary, and non-profit
organizations of citizens that are established to pursue a mission, usually
involving the interest of the public, marginalized groups or specific sectors
of society. They include non-government organizations, socio-civic groups,
foundations and people’s organizations;

e) Council shall refer to the SE Council;

f) Cooperative shall refer to an autonomous and duly registered association
of persons, with a common bond of interest, who have voluntarily joined
together to achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the capital required,
patronizing their products and services and accepting a fair share of the
risks and benefits of the undertaking in accordance with universally
accepted cooperative principles as defined in 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

5


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 shall 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;

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;

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;

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 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;

0) 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 shall 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;

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 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 of fish 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 non-profit
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,

8


s)

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 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;


t) Minimum basic needs shall refer to the needs of a Filipino family pertaining
to survival (food and nutrition; health; water and sanitation), security
(shelter; peace and order; public safety, income and livelihood); and
enabling services (basic education and literacy, participation in community
development, family and psycho-social care); and inclusion (assistive
device/technology, personal assistance, sign language _ interpreter,
accessibility);

u) Non-Government Organization or NGO shall refer to a duly registered non-
stock, non-profit organization focusing on the upliftment of the basic or
disadvantaged sectors of society by providing advocacy, training,
community organizing, research, access to resources, and other similar
activities and, as defined under Section 34 (H)(2)(c) of Republic Act No.
8424, as amended, otherwise known as the “National Internal Revenue
Code of 1997,” organized and operated exclusively for scientific, research,
educational, character-building and youth and sports development, health,
social welfare, cultural or charitable purposes, or a combination thereof, and
no part of the net income of which, inures to the benefit of any private
individual;

v)

People’s Organization or PO shall refer to a self-help group belonging to
the basic sectors and/or disadvantaged groups composed of members
having a common bond of interest who voluntarily join together to achieve
a lawful common social or economic end;

w) Persons with Disability or PWD shall refer to individuals with restriction or
different abilities, as a result of a mental, physical or sensory impairment,
to perform an activity in the manner or within the range considered normal
for a human being;

x) Poor shall refer to individuals and families whose income fall below the
poverty threshold as defined by the National Economic and Development
Authority and/or are deprived of the means to provide in a sustained manner
their minimum basic needs of food, health, education, housing and other
essential amenities of life, as defined under R.A. 8425; it may also be the
state of deprivation — such as poor health, lack of education, inadequate
living standard, lack of income (as one of several factors considered),
disempowerment, poor quality of work and threat from violence.

Poverty reduction/alleviation shall refer to overcoming the income,
resource, and capability deprivation among the poor as defined in the
preceding paragraph and the marginalized sectors as defined in paragraph
(r) hereof;

y)

z) Private Enterprise shall refer to an organization engaged in a business

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activity organized for the purpose of accumulating profit and whose primary
stakeholders and beneficiaries are its owners;

aa) Procuring Entity shall refer to any branch, department, office,
agency, or instrumentality of the government, including state universities
and colleges, government-owned and/or - controlled corporations,
government financial institutions, and local government units procuring
Goods, Consulting Services and Infrastructure Projects;

bb) Resource mobilization strategy shall refer to a development strategy
intended to generate income from the sale of products and services of a SE
in order to finance or subsidize the operations of its core development
program or development interventions among the marginalized sectors;

cc)SEGFP shall refer to the SE Guarantee Fund Pool created under this Act;

dd) Social development shall refer to the continuing process of
addressing the needs of society, beginning with the people's minimum basic
needs, through a systematic implementation of socioeconomic programs or
packages;

ee) Social Enterprise Resource Institution shall refer to an organization
that provides financial and/or other forms of assistance to social enterprises
for them to become viable and sustainable including but not limited to
trainings, education and other capacity-building measures, research and
development, advocacy and other support activities;

ff) Social entrepreneur shall refer to an innovative individual or institution that
promotes the creation and operationalization of enterprises or livelihood
endeavors for those in need or which address social problems and improve
societal wellbeing;

gg) Social entrepreneurship entails innovations designed to explicitly
improve societal wellbeing, housed within entrepreneurial organizations,
which initiate, guide or contribute to change in society;

hh) Social Inclusion strategy shall refer to the development strategy that
assists marginalized groups of people in society who, for reasons of
poverty, geographical inaccessibility, culture, language, age, sex, gender,
migrant status, disability or other disadvantage, have not benefited from
health, education, employment and other opportunities, and who are
relegated to the sidelines of political persuasion, social negotiation, and
economic bargaining in order to restore their dignity by not only removing
the barriers that limit their access to the delivery of basic social services and
employment, but more importantly, by nurturing work and other
environments that create avenues for their participation as productive


members of society;

Social Investors shall refer to individuals or institutions that choose to put in
money to a business endeavor or activity not principally for financial profit
but to fulfill a social mission which may include poverty reduction, concern
for environmental protection, strong organizational governance, and a
desire for a more economically just world;

Social reform shall refer to the continuing process of addressing the basic
inequities in society through a systematic, unified and coordinated delivery
of socioeconomic programs or packages;

kk) Social value shall refer to the additional benefit to society of procuring a
good or service, over and above the direct benefit and value of the good or
service 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 Il

12


POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE

SECTION 4. Establishment of the Poverty Reduction Through Social
Entrepreneurship (PRESENT) Program — To promote the development of a
SE sector, a comprehensive and fully-integrated Poverty Reduction through
Social Entrepreneurship (PRESENT) Program, is hereby established, and shall
be 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 in synchrony with the medium-term development plan of the national
government.

SECTION 5. Eligibility for Benefits and Incentives. — To be eligible for
the benefits and incentives provided for in this Act, the SE shall:

13


a) Provide or facilitate the provision of a combination of transactional and/or
transformational services to improve the position and benefits derived by
the poor from the SE and the value chain or economic subsector where the
SE is located, including becoming worker-owners, supplier-owners,
supervisors and managers, active members and leaders in governing
bodies of the SE or its allied organizations;

b) Invest a substantive part of its surplus, profits or mobilize other resources

to assist the poor to become partners in SE or value chain

management/governance and/or to become partners in community,
sectoral and societal transformation;

Pursue a pro-active contribution to resolving social and environmental

problems and generate profit or surplus with due regard to social and

environmental costs;

d) Be engaged in an economic activity within the sectors of agriculture and
fisheries, industry and services which, for purposes of this Act, shall refer to
an activity in any of the economic subsectors;

e) Distribute a substantive part of the wealth created by the enterprise to the
poor in the form of services, dividends and other forms of benefits, and
payments and incentives for products or services rendered consistent with
the principles of fair trade;

f) Be duly registered with the appropriate agencies as provided under

Republic Act No. 11232, or the “Revised Corporation Code of 2018;”

Republic Act No. 9520, or the “Revised the Cooperative Code of the

Philippines of 2009;” Republic Act No. 9501, or the “Magna Carta for Micro,

Small and Medium Enterprises of 2008;” Republic Act No. 9178, or the

Barangay Micro Business Enterprises Act of 2002;” Republic Act No. 10693,

or the “Microfinance NGOs’ Act of 2015;” and other relevant laws; and

Be financially sustainable; provided that, social enterprises that have not

achieved financial sustainability may be eligible to avail of the services,

assistance and incentives set forth in this Act by presenting a workable
strategy to achieve financial sustainability over a reasonable period.

¢)

g

SECTION 6. Additional Eligibility for Benefits and Incentives in case
of Stock Corporations, Partnerships or Sole Proprietorships. —In the case
of social enterprises organized as stock corporations, partnerships, or sole
proprietorships, the SE shall:

a) Invest at least 60% of its net revenues to sustain the fulfillment of their social
mission and provide transformational services for the wellbeing of the
marginalized sector they serve; and

b) 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.

4


CHAPTER Ill
SOCIAL ENTERPRISE DEVELOPMENT COUNCIL

SECTION 7. 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 (DT!). It shall be the primary
agency tasked to carry out the promotion, growth and development of SEs in the
country.

The Council shall be composed of the following:

a) Secretary of Trade and Industry, as chairperson

b) Secretary of Agriculture, as co-chairperson

c) Secretary of Social Welfare and Development, as vice chairperson

d) SE sector head representative, as co-vice chairperson

e) Lead Convener of the National Anti-Poverty Commission

f) Director-General of the National Economic Planning and Development
Agency

g) Vice Chair for Basic Sectors of the National Anti-Poverty Commission

h) Secretary of the Interior and Local Government

i) Secretary of Finance

j) Governor of the Bangko Sentral ng Pilipinas

k) Secretary of Environment and Natural Resources

1) Secretary of Agrarian Reform

m) Secretary of Science and Technology

n) Secretary of Labor and Employment

©) Secretary of Education

p) Secretary of Transportation

q) Secretary of Information and Communications Technology

t) Chairperson of the Commission on Higher Education

) Chairperson of the Cooperative Development Authority

t) Chairperson of the Securities and Exchange Commission

u) Chairperson of the Philippine Commission on Women

v) Director-General of the Technical Education and Skills Development
Authority

w) 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.

SECTION 8. 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

15


policies and programs for SEs as well as other anti-poverty reduction
initiatives consistent with national development objectives.

b) Formulate policies and plans to ensure the resilience and preparedness of
social enterprises for disaster risk reduction and management as well as
develop capacities of social enterprises to respond, recover and build back
better in the face disasters and pandemics.

c) Issue certificate of qualification upon determination that the criteria set for
this purpose have been fully satisfied: Provided, That the certificate of
qualification shall be valid only for such period as may be prescribed under
the implementing rules and regulations of this Act;

d) Oversee the successful implementation of the PRESENT Program and
other SE programs;

e) Identify and access sources of financing to expand the SE sector;

f) Monitor and evaluate the performance of programs and projects for
appropriate incentives;

g) Call upon any government agency to carry out and implement programs
and projects identified by the Council and to assist in clarifying issues and
finding resolution to problems that concern their respective offices with
respect to the implementation of the PRESENT Program enunciated under
this Act or any development program for SEs.

h) Call upon people’s organizations, non-government organizations, the
academe and other sectors to provide advice on matters pertaining to SEs
and conduct of transactional and transformational services to farmers,
producers, workers, consumers and other stakeholders;

i) Submit annual and other periodic reports to the President and the Congress
of the Philippines through the Congressional Oversight Committee;

Promulgate such rules and regulations and exercise such other powers and
functions as may be necessary to carry out the purposes of this Act,
including guidelines for the administration of grant windows provided for in
Section 24;

k) Propose the concomitant plantilla positions and structure for the personnel
under it;

Manage the funds provided for by this law, including ensuring the funds’
growth where possible;

m) Put in place mechanisms for accountability to marginalized stakeholders

16


being served

n) Align and synchronize the provision of support programs, benefits and
incentives for SEs provided for in this Act; and

0) Perform such other functions as may be necessary for its effective
operations and the continued enhancement, growth and development of the
SE sector.

SECTION 9. Designation of Representatives to the Council. Within 30
days from the effectivity of this Act, Cabinet-ranked ex-officio members of the
Council shall designate a representative to the council, to attend the meetings
of the council in cases that the Cabinet-ranked ex officio members cannot
personally attend such meetings. The designated representative of any of the
Cabinet-ranked members of the Council must hold a position not lower than a
bureau director.

SECTION 10. Term and Appointment of SE Sector Representatives.
Within 90 days, DTI as Chair shall convene members of the Council from the
Philippine Government, as identified in Section 9, 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.

SECTION 11. 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

7


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.

SECTION 12. 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.

SECTION 13. 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.

SECTION 14. 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.

SECTION 15. 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.

SECTION 16. Social Entrepreneurship Education in Schools. —
Toward strategically developing the nation’s human resource capability in social
entrepreneurship, the Department of Education (DepEd) and the Commission
on Higher Education (CHED) shall cause the integration of SE content and
inclusion of SE courses in the curricula at all levels, especially in the secondary
and tertiary levels. This shall be part of the SE Capability and Sustainability
Program stated in this Act.

A continuing social enterprise education program for out-of-school youth
and adults shall likewise be developed and undertaken. The social
entrepreneurship education program for primary and secondary education shall
include information regarding:

a) Social issues and civic ways of addressing them;

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b) The producer as a steward of natural resources;

c) The consumer as a responsible member of society and their responsibility
to develop critical awareness which is the responsibility to be alert and
questioning about environmental and social impacts of the goods and
services they use;

d) Social concern which is the responsibility to be aware of the impact of their
consumption to society, especially to the disadvantaged;

e) Environmental awareness which is the responsibility to understand the
consequences of their use of natural resources, consumption, recognizing
their individual and social responsibility to conserve natural resources for
future generations; and

f) Gender justice, or the full equality and equity between men and women in
all spheres of life, resulting in women jointly, and on an equal basis with
men, defining and shaping the policies, structures, and decisions that affect
their lives and society as a whole.

All higher learning institutions and vocational schools are mandated to
include a subject on social entrepreneurship in their social studies program or in
their business, commerce, or economics courses.

CHAPTER IV
DEVELOPMENT OF SOCIAL ENTERPRISES

SECTION 17. SE Capability Building and Sustainability Program. —
There is hereby established a SE Capability Building and Sustainability Program
whose primary objective is to guarantee the viability and sustainability of SEMPS
through activities that advance, in general, both transformational services and
transactional services. This program shall include training in social
entrepreneurship development institutional strengthening, human resource
competency and skills training, business planning and advisory services,
upgrading of accounting and auditing systems, technical assistance for the
installation or improvement of management information systems, technology
intervention, technology incubation/commercialization, market studies, and
product development competitiveness, business matching activities, trade fairs
and missions, policy advocacy, gender and development, resiliency, and other
related activities.

The SE Capability Building and Sustainability Program shall likewise
include the establishment of an insurance system for SEs affected by natural
calamities in line with the National Framework Strategy on Climate Change
2010-2022 as provided for under Republic Act No. 9729, otherwise known as.
the “Climate Change Act of 2009,” and Republic Act No. 10121, otherwise known
as the “Philippine Disaster Risk Reduction and Management Act of 2010.”

SECTION 18. Creation of SE Development Fund. — For this purpose,
there is hereby created and established an SE Development Fund (SEDF) in the

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initial amount of Three Billion Pesos (R3,000,000,000.00) to be administered by
the Council chargeable against the General Appropriations Act following the year
of the effectivity of this Act. The SEDF shall likewise be funded with one percent
(1%) of the following: 2) collected taxes pursuant to the implementation of
Republic Act No. 10351, otherwise known as the “SIN Tax Act of 2012;” 3)
earnings derived by the Tourism Infrastructure and Enterprise Zone Authority
(TIEZA) from its collections; and 4) equity contributions of participating
government financial institutions. Voluntary contributions, grants, gifts from both
local and foreign sources as may be accepted by the Council shall also form part
of the SEDF.

Additional funding and appropriation shall be provided by the Office of the
President as the needs arise during calamities, pandemics and other extra-
ordinary circumstances, subject to audit by the Commission on Audit.

In addition to the SEDF, the 5% allocation for Gender and Development
(GAD) programs of government agencies and local government units as
prescribed in Republic Act. No. 9710, otherwise known as the “Magna Carta of
Women Act of 2009,” may be accessed by social enterprises which are women-
led or contribute to women’s economic empowerment. The allocation can help
build the capacity of such enterprises, including further organizing women-led
cooperatives and groups to improve women’s economic participation.

The SEDF shall be used for the purposes provided herein. Any undisbursed
funds from the preceding year shall form part of the disbursable portion of the
SEDF in the following year.

SECTION 19. Creation of SE Guarantee Fund Pool. — There is hereby
created a Social Enterprise Guarantee Fund Pool (SEGFP) which shall be
comprised of the five percent (5%) of the preceding year budget surplus of the
government-owned and controlled corporations and government financial
institutions as contribution to the SEGFP in accordance with relevant laws,
charters and by-laws, in addition to voluntary contributions, grants and gifts from
both local and foreign sources as may be accepted by the Council.

The SEGFP shall be administered by the Council and shall be used to
mitigate the risks involved in SE sector lending, facilitating the provision of credit
therefor. The fund shall be placed in trust with the Land Bank of the Philippines
for the purpose of providing guarantee cover to participating financial institutions
and other parties in extending financing to SEs: Provided, that the fund may also
be used to cover the performance bond of SEs in government procurement.

The Council, in coordination with the Land Bank of the Philippines, shall

draw up the mechanics and administrative arrangements and issue the
implementing guidelines for the fund pool.

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SECTION 20. Cash Incentives for Persons with Disabilities (PWD). - To
level the playing field and recognize the circumstances of start-up SEs primarily
employing PWDs, the SEDF created in Section 18 of this Act shall provide a cash
incentive for every PWD, in accordance with Republic Act No. 7277, otherwise
known as the "Magna Carta for Disabled Persons Act of 1992," and other
marginalized sectors as may be provided by this law, representing at least twenty
five percent (25%) of the daily minimum wage, until such time that the said SE is
able to achieve financial sustainability.

SECTION 21. Social Enterprise Recovery and Rehabilitation Fund. -
To prepare for or respond to climate risks and impacts, disaster vulnerabilities
and hazards, humanitarian emergencies (including those arising from armed
conflict), epidemics, financial crises or economic shocks, and other such events,
a Social Enterprise Resilience Fund is hereby established to build the resilience
of social enterprises. This shall include stimulus grants, climate adaptation
initiatives, risk insurance, and other such facilities and products to improve the
ability of SEs to withstand shocks and stresses. The Fund shall be lodged with
the Department of Trade and Industry and shall be managed by the SEDC.

SECTION 22. Social Enterprise Research and Development System. -
The Council, in coordination with the Department of Science and Technology
(DOST), NEDA, DTI, and other appropriate agencies and research institutions,
shall develop and enhance a research and development system that:

a) Provides studies on opportunities for poverty reduction and SE
development in key economic subsectors and other inputs for the Council
to undertake strategic planning for its PRESENT Program;

b) Equip SEs and support institutions with technologies that are appropriate
for enhancing the participation and benefits of the poor in various economic
subsectors; and,

c) Equip SEs and support institutions with innovative and sustainable
approaches to improve access of the poor to quality basic social services.

This system must be based on gender analysis, or, as defined in this bill,
the systematic analytical process based on sex-disaggregated and gender
information.

SECTION 23. Social Enterprise Marketing Infrastructure
Development. - The Council shall promote the development and expansion of
local and foreign markets for the products and services of SEMPs, guided by the
principles of fair trade. Consistent with this, the Council shall:

a) Establish a SE Marketing Assistance Program (SMAP) that will assist SEs
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

22


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 SEs 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 V
FINANCING AND BENEFITS

SECTION 24. Special Credit Windows with non-collateralized
loans. — 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, 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

23


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.

SECTION 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 (ie., 50%), particularly those in the agricultural and
informal sectors. Women shall have no barriers to economic participation
as provided for in Republic Act No. 7192, otherwise known as the “Women
in Development and Nation Building Act of 1992.”

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SECTION 26. Grant facility. The SE Development Fund in Section 18 shall
provide grants to qualified social enterprises and resource institutions for the
performance and conduct of their mission toward poverty reduction, sustainable
development, promotion of gender and social justice, environmental conservation,
climate action, and improvement in economic welfare of the poor and marginalized
sectors.

There will be three windows under this fund facility, namely: capacity-
building grant; start up enterprise grant; and ecosystem-building grant. The SE
Council shall formulate the guidelines for the management and implementation of
grant assistance.

SECTION 27. Tax Credits. —- SEDC will develop a system of valuation of
social, economic and ecological contributions of social enterprises and the social
impact on the marginalized sectors they serve, as bases for tax credits from the
government.

SECTION 28. Preferential Rights. — Without prejudice to preferential
rights already available to specific enterprises or organizations under other laws,
qualified SEMPs shall be accorded a preferential right in the procurement
process and in the implementation of procurement contracts by the government
in all its branches, departments, agencies, subdivisions, and instrumentalities,
including in the government-owned and controlled corporations and local
government units.

Such a preferential right is anchored not just in economic efficiency but in

social values which provide long-term benefits to society. As defined in this bill,
social value refers to the additional benefit to society of procuring a good or
service, over and above the direct benefit and value of the good or service to the
procuring entity.
These social values include, inter alia, poverty reduction, sustainable
development, environmental conservation, climate action, community
development, and gender and social justice. As such, the determination of
government procurement shall factor in social values.

Such a preferential right, however, shall not be prejudicial to the interests
of the government and the public.

SEs shall be given priority and preference in the following procurement
processes:

a) Direct contracting as provided under Section 50 of Republic Act No. (RA)
9184, otherwise known as the “Government Procurement Reform Act of
2002,” may be resorted to if the contracting party selling the goods and
services required by the procuring entity is a social enterprise as qualified
by the Council.

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b) Shopping as provided under Section 52, paragraph (a) of RA 9184 may be
resorted to when there is an unforeseen contingency requiring immediate
purchase: Provided, That the procurement of the goods and services shall
be first obtained from the social enterprise within the area of operation of
the procuring entity which is duly qualified by the Council as having the
capacity to supply the required goods and services: Provided, further, That
the amount shall not exceed Five hundred thousand pesos (P500,000.00).

c)

Shopping as provided in Section 52, paragraph (b) of RA 9184 may be
resorted in the procurement of ordinary or regular office supplies and
equipment not available in the Procurement Service involving an amount
not exceeding Two hundred fifty thousand pesos (P250,000.00): Provided,
That the Procurement does not result in splitting of contracts: Provided,
further, That a price quotation shall be first obtained from a social enterprise
as qualified by the Council as having the capacity to furnish or provide the
required office supplies and equipment. Only in the event of failure of
submission or absence of SE price quotation that at least three (3) price
quotations from other bona fide suppliers shall be obtained.

d)

Negotiated procurement as provided under Section 53 of RA 9184 may
be allowed when the goods or services subject of the procurement may be
obtained from a SE within the area of operation of the procuring entity which
is duly qualified by the Council as having the capacity to supply the required
goods and services.

e

Social enterprises established by and for Persons with Disability (PWD)
shall be qualified under the Department of Education's Supply and Delivery
of Furniture for Elementary, Junior and Senior High Schools under the 10%
Allocation for Cooperatives of Persons with Disability.

f) A procuring entity, when applicable, shall have at least one member
representing SEMPS.

Qualified SEs under this Act shall be entitled to a share of at least twenty
percent (20%) of the total procurement value of goods and services supplied to
the government, its bureaus, offices and agencies annually. Provided, That, the
DBM shall direct line agencies of government to include at least 10% of its
annual budget for Maintenance and Other Operating Expenses and Capital
Outlay specifically for goods procured and services contracted from social
enterprises producing and offering such goods and services.

SECTION 29. Insurance for Social Enterprises. The Insurance
Commission shall issue the necessary rules and regulations and implement
measures to ensure that the insurance industry shall provide insurance products,
both life and non-life, for social enterprises and their stakeholders among the

26


poor. Furthermore, SEMPS shall be assisted to become eligible and effective
insurance providers to their clients and constituents.

SECTION 30. Support for Social Investors and SE Resource
Institutions. - The government shall develop a program that fosters a
community of social investors and resource institutions supportive of social
enterprises.

SECTION 31. Appropriations. — The amount necessary to implement
the provisions of this Act shall be charged against the current year's
appropriation of the Office of the President. Thereafter, such sums as may be
necessary for its continued implementation shall be included in the GAA. The
budget requirements for the implementation of this Act for cooperating agencies
shall be incorporated in their respective budgets.

SECTION 32. Penal Clause. — The penalty of imprisonment for not
less than six (6) months but not more than two (2) years or a fine of not less
than two hundred fifty-thousand (P250,000) or both imprisonment and fine, at
the discretion of the court, shall be imposed upon any person, who, intentionally
or by gross negligence, fails to provide the benefits, rights and incentives granted
to SEs in violation of this Act or perform any act in violation of its provisions.

If a corporation is found to have violated the provisions of this Act, the
officers, directors, members or trustees shall be held liable. If the violation was
committed by a government official or employee, such official or employee shall
be terminated from the service with forfeiture of all the benefits due him in
addition to the fine and/or imprisonment mentioned above.

Corporations and other juridical entities, financial or otherwise, found
representing themselves as a SE shall be caused to pay double the benefits it
reaped from this program through the taxes it was able to save when it
represented itself as a SE. In addition, the officers of the juridical entity who
represented itself as a SE shall be liable for a fine of P500,000.00 or
imprisonment for not less than two (2) years or both fine and imprisonment at
the discretion of the court.

SECTION 33. Non-Compliance with the Mandatory Allocation of
Credit Resources. — Administrative sanctions including a fine of not less
than Five hundred thousand pesos (P500,000.00) shall be imposed by the
Banko Sentral ng Pilipinas upon any banking or lending institution who fails
to provide the credit allocations granted to SE in violation of Section 19 of
this Act.

SECTION 34. Joint Congressional Oversight Committee. — Upon the

effectivity of this Act, a Congressional Oversight Committee, hereafter referred
to as the PRESENT Oversight Committee is hereby constituted. This Committee

27


shall set the overall framework to review the implementation of this Act. It shall
likewise determine inherent weaknesses in the law and recommend necessary
remedial legislation or executive measures.

The PRESENT Oversight Committee shall be composed of fourteen (14)
members with the chairpersons of the Committee on Trade and Industry of the
House of Representatives, and the Committee on Trade, Commerce and
Entrepreneurship of the Senate as Co-Chairpersons; and six (6) members from
each House, to be designated by the Speaker of the House of Representatives,
and the Senate President, respectively.

For purposes of determining remedial legislation, the PRESENT Oversight
Committee shall, within six (6) years after the effectivity of this Act, conduct a
sunset review which shall include a systematic evaluation of the impact of this
Act, accomplishments of the program, and the performance of its implementing
agencies.

SECTION 35. Separability. — If any provision or part of this Act is declared
invalid or unconstitutional, the remaining parts or provisions not affected shall
remain in full force and effect.

SECTION 36. Implementing Rules and Regulations. — Within ninety (90)
days from the effectivity of this Act, the Department of Trade and Industry shall,
in consultation and coordination with the concerned government agencies and
social enterprise sector, promulgate the necessary rules and regulations for the
effective implementation of this Act.

SECTION 37. Repealing Clause. — For purposes of this Act, Section 11 of
RA 8425 and Sections 50, 52 and 53 of RA 9184 which are inconsistent with this
Act are hereby deemed amended. All other laws, executive orders, presidential
decrees, rules and regulation or parts thereof inconsistent with any provisions of
this Act are hereby repealed, amended or modified accordingly.

SECTION 38. Effectivity. - This Act shall take effect fifteen (15) days from
its publication in the Official Gazette or in two (2) newspapers of general
circulation.

Approved,

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