1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO.  
_________________________________________________________ 
INTRODUCED BY REP. MAXIMO, JR. Y. DALOG 
_________________________________________________________ 
EXPLANATORY NOTE 
With the increasing number of families below the poverty line1 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.2 
In a 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.3  In fact, in 2016, social enterprises created more than 
17,000 jobs and generated US$ 21 million in value.4 
However, despite the foregoing, there is no existing policy nor legislation 
specifically targeted to benefit them5 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 and 
1 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). 
2 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.pdf (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 (last 
accessed: November 10, 2022) 
4 Id, p. 14. 
5 Supra note 2. 
November 14, 2022
11:01am
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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, JR. Y. DALOG 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO.  
_________________________________________________________ 
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 I 
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
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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. 
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 


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help workers in the informal sector transition to be stakeholders of the 
formal economy. In addition to reinvesting its surplus or profits back toward 
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”; 
 


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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 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; 
 
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 


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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;  
 
 
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 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; 
 
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. 


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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 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 


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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.  
s) 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, 


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


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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; 
 
ii) 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; 
 
jj) 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; 
 


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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.  
 
ll) 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. 
 
oo) 
 Vulnerable sectors shall refer to groups who are at-risk of any 
potential event, loss or danger.  
 
CHAPTER II 
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 


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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: 
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;  
c) Pursue a pro-active contribution to resolving social and environmental 
problems and generate profit or surplus with due regard to social and 
environmental costs;  


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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 
g) 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. 
 
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.  
 
CHAPTER III 
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 (DTI). 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 


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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 
l) Secretary of Agrarian Reform 
m) Secretary of Science and Technology 
n) Secretary of Labor and Employment 
o) Secretary of Education 
p) Secretary of Transportation  
q) Secretary of Information and Communications Technology  
r) Chairperson of the Commission on Higher Education 
s) 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 
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 


16 
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; 
j) 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;  
l) 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 
being served  
n) Align and synchronize the provision of support programs, benefits and 
incentives for SEs provided for in this Act; and  
o) 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 


17 
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 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:  


18 
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.  
 


19 
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; 
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 


20 
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 initial 
amount of Three Billion Pesos (P3,000,000,000.00) 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 


21 
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. 
 
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 


22 
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 
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; 


23 
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 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; 


24 
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.”   
 
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, 


25 
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. 
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.  
 


26 
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 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 


27 
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 
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.  
 


28 
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,