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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill  No._____ 
Introduced by: Congressman BIENVENIDO M. ABANTE, JR. 
AN ACT 
PROVIDING ENHANCED INCENTIVES AND SUBSIDIES FOR MICRO, 
SMALL, AND MEDIUM ENTERPRISES (MSMEs) WITH LESS THAN ONE 
HUNDRED EMPLOYEES, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the 
Philippine economy, accounting for over 99% of all registered businesses and 
generating millions of jobs nationwide. Despite their vital role in economic growth, 
job creation, and innovation, MSMEs continue to face significant barriers to entry and 
sustainability, including high regulatory costs, limited access to government 
procurement, and insufficient support for capacity building and market access.1 
The proposed Enhanced MSME Incentives and Subsidies Act seeks to address 
these persistent challenges by providing a comprehensive package of incentives and 
support mechanisms for MSMEs with less than one hundred (100) employees. This 
measure is consistent with the State policy to promote, support, and strengthen 
MSMEs as articulated in the Magna Carta for MSMEs and related laws, such as the 
"Go Negosyo Act" (RA 10644 (2014)), the "Philippine Innovation Act" (RA 11293 
(2019)), and the "Barangay Micro Business Enterprises (BMBEs) Act" (RA 9178 (2002)). 
Key features of this bill include: (1) capping business permit and license fees to 
a reasonable amount for eligible MSMEs; (2) mandating expedited permit processing 
through provisional authorities; (3) reserving a share of government procurement for 
MSMEs; (4) requiring discounts on shipping and delivery services; (5) providing free 
or discounted selling space in public and private venues; (6) ensuring access to credit 
and financial support; and (7) prioritizing MSMEs in government-led training and 
capability-building programs. 
The need to rationalize and limit business permit fees is underscored by the 
Supreme Court’s recent pronouncement in Bases Conversion and Development Authority, 
et al. v. City Government of Baguio City (G.R. No. 192694, 2023), where the Court clarified 
1 Filipino Society of Composers, Authors and Publishers, Inc. v. Anrey, Inc. G.R. No. 233918 August 9, 2022. 
September 8, 2025
6:07 pm
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that business permit fees imposed by local government units (LGUs) are regulatory in 
nature and not intended for revenue generation. The decision affirms the authority of 
LGUs to set permit fees, provided these are reasonable and serve a regulatory 
purpose, and highlights the importance of ensuring that such fees do not unduly 
burden MSMEs. 
By institutionalizing enhanced incentives and support for MSMEs, this bill 
aims to foster a more enabling environment for entrepreneurship, promote inclusive 
economic growth, and empower Filipino enterprises to compete and thrive in both 
domestic and global markets. 
Hence, in the light of the foregoing, the immediate passage of this Bill is 
earnestly pleaded. 
BIENVENIDO M. ABANTE, JR. 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill  No._____ 
Introduced by: Congressman BIENVENIDO M. ABANTE, JR. 
AN ACT 
PROVIDING ENHANCED INCENTIVES AND SUBSIDIES FOR MICRO, 
SMALL, AND MEDIUM ENTERPRISES (MSMEs) WITH LESS THAN ONE 
HUNDRED (100) EMPLOYEES, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. — This Act shall be known as the "Enhanced MSME 
Incentives and Subsidies Act." 
SEC. 2. Declaration of Policy. — It is the policy of the State to promote, support, 
and strengthen the development of micro, small, and medium enterprises (MSMEs) 
as vital engines of economic growth, job creation, and innovation, consistent with the 
Magna Carta for MSMEs and related laws. 
SEC. 3. Coverage. — This Act shall apply to all MSMEs: 
(a) with less than one hundred (100) employees, duly registered with the
Department of Trade and Industry (DTI), Securities and Exchange
Commission (SEC), or Cooperative Development Authority (CDA), as the
case may be;
(b) one hundred percent (100%) Filipino-owned if a sole proprietorship or
partnership, or at least sixty percent (60%) Filipino-owned if a corporation,
and
(c) not be a branch, subsidiary, or division of a large-scale enterprise, nor have
its policies determined by a large-scale enterprise or by persons who are not
owners or employees of the enterprise.
SEC. 4. Reduced Business Permit Costs to all eligible MSMEs. — 
(a) The total fees for all business permits, licenses, and similar documents
required by any government agency or local government unit shall not
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exceed Five Hundred Pesos (₱500) per agency per year, for a period of five 
(5) years from initial registration. 
 
(b) After the initial five (5) year period, the total fees for all business permits, 
licenses, and similar documents required by any government agency or 
local government unit shall not exceed One Thousand Pesos (₱1,000) per 
agency per year. 
 
SEC. 5. Expedited Permit Processing. — Upon receipt of a complete application 
for a business permit or license, the local government unit or concerned agency shall 
immediately issue a provisional authority valid for one (1) year, allowing the MSME 
to commence operations pending final approval. The provisional authority shall 
remain effective unless the issuing office formally denies or revokes it within thirty 
(30) calendar days from the issuance thereof upon determination that the MSME has 
not met the requirements and qualifications imposed by such office.  
 
Failure of the office to act within this period shall be deemed an approval of the 
provisional authority. 
 
SEC. 6. Procurement Opportunities. — Eligible MSMEs with less than one 
hundred (100) employees shall be allocated at least twenty percent (20%) of the total 
annual procurement value of goods and services supplied to the Government, its 
bureaus, offices, agencies, government-owned and controlled corporations, and local 
government units, in accordance with existing procurement laws and regulations. 
 
The Department of Budget and Management shall have the authority to 
monitor and ensure compliance of all government entities with the mandated 
procurement allocation for MSMEs. The DBM shall submit a detailed report on 
compliance and procurement performance to the Micro, Small, and Medium 
Enterprises Development (MSMED) Council created under R.A. No. 6977 on a semi-
annual basis, and to the Congress of the Philippines, through its appropriate 
committees, on a yearly basis. 
 
SEC. 7. Discounts on Shipping and Delivery. — All public and private shipping, 
delivery, and courier service providers shall grant at least a ten percent (10%) discount 
on shipping, delivery, and courier fees for products and raw materials of eligible 
MSMEs under Section 3 of this Act. 
 
SEC. 8. Free Selling Space. —  
 
(a) At least one percent (1%) of the total available space in public markets, 
ports, parks, and other public venues shall be designated as free selling 
areas for the qualified MSMEs under this Act. 
 
(b) Private malls and shopping centers are encouraged to provide free space or 
discounted rental rates of at least ten percent (10%) discount to MSMEs. 
 


 
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SEC. 9. Financial Support and Credit Access. —  
 
(a) MSMEs under this Act shall have access to a free basic credit report 
annually from the Credit Information Corporation or its accredited 
agencies.  
 
(b) The Small Business Corporation and other government financial 
institutions shall provide financing and credit guarantee programs for such 
MSMEs, subject to guidelines to be issued by the Department of Finance 
and the DTI. 
 
SEC. 10. Additional Subsidies and Support Programs. —  
 
(a) MSMEs shall be given priority access to government-led capability-building 
trainings, technology transfer, and entrepreneurship education programs.  
 
(b)  Subsidies shall be provided for participation in trade fairs, exhibitions, and 
product development activities, subject to the availability of funds and 
guidelines to be issued by the DTI. 
 
SEC. 11. Reportorial Compliance Requirements. — Notwithstanding any 
exemption from the payment of taxes that may be granted under this Act, all Micro, 
Small, and Medium Enterprises (MSMEs) covered by this Act shall continue to comply 
with all reportorial and documentation requirements mandated by the Bureau of 
Internal Revenue and other relevant government agencies. Nothing in this Act shall 
be construed as an exemption from the obligation to file tax returns, submit reports, 
or comply with any other documentary requirements as may be prescribed by existing 
laws, rules, and regulations. 
 
SEC. 12. Implementing Rules and Regulations. — Within ninety (90) days from the 
effectivity of this Act, the DTI, in coordination with concerned agencies, shall 
promulgate the necessary rules and regulations for the effective implementation of 
this Act. 
 
SEC. 13. Separability Clause. — If any provision of this Act is declared 
unconstitutional or invalid, the other provisions not affected thereby shall remain in 
full force and effect. 
 
SEC. 14. Repealing Clause. — All laws, decrees, executive orders, rules and 
regulations, or parts thereof inconsistent with this Act are hereby repealed or modified 
accordingly. 
 
SEC. 15. Effectivity. — This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
 
Approved.