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Republic of the Philippines paTE LI AUG 205 oy

HOUSE OF REPRESENTATIVES Time 3:05pm,

BY RS)
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Quezon City, Metro Manila

First Regular Session

House Bill No.__3455

Invoduced by REPRESENTATIVE GERALD CLOYD ALEXIS V. GALANG.

EXPLANATORY NOTE

Republic Act No. 9178, known as the Barangay Micro Business Enterprises
{BMBE) Act of 2002, was established to stimulate the development of barangay micro
businesses through incentives and other benefits.

Barangay Micro Business Enterprises (BMBEs) constitute a critical component of
the Philippines’ economic development strategy, functioning as primary secdbeds for
entrepreneurial talent. The principal objective of the Act is therefore (o facilitate the
integration of micro enterprises currently operating within the informal scctor into the
formal, mainstream economy. Further strengthening of BMBEs is instrumental in
generating increased employment and livelihood opportunities, thereby contributing to an
enhanced quality of life for the citizenry.

In 2023!, the Philippines’ business ecosystem was overwhelmingly dominated by
MSMEs, which constituted 99.63% (1,241,733) of the country’s 1.24 milion establishments
(PSA LE). Large enterprises represented a marginal 0.37% (4,640).

ISMEs are the backbone of national employment, generating 6.33
9 of total). Micro and small enterprises drive this contribution
in while medium enterprises add 6.77%. In contrast, large

enterprises account for 33.03% (3.13 million jobs} of total employment.

A comprehensive review of Republic Act No. 9178 is urgently needed. This will
ensure its provisions remain relevant and responsive to the current challenges facing
Barangay Micro Business Enterprises (BMBEs). These entities continue recovering from
pandemic impacts while confronting new shocks—induding natural disasters like
typhoons, global events such as unprecedented inflation, and rising fuel costs.
Consequently, targeted amendments are essential (o provide BMBEs with critical support,
registration incentives, and strategic partnerships with online payment gateways.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

fin caane

Second District, Valenzuela Gi

apa: Pre i gon pf esac sane stasis!


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

‘TWENTIETH CONGRESS
First Regular Session

House Bill No._ 3455.

Introduced by REPRESENTATIVE GERALD CLOYD ALEXIS V. GALANG

AN ACT
FURTHER STRENGTHENING THE BARANGAY MICRO BUSINESS
ENTERPRISES (BMBEs) PROGRAM AND AMENDING REPUBLIC
ACT NO. 9178, OTHERWISE KNOWN AS THE BARANGAY MICRO
BUSINESS ENTERPRISES ACT OF 2002

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

SECTION 1. Sec. 2 of Republic Act No. 9178 otherwise known as
Barangay Micro Business Enterprises (BMBE's) Act of 2002, is hereby amended to
read as follows:

Section 2. Declaration of Policy. -IT Is HEREBY DECLARED THE
POLICY OF THE STATE TO SUPPORT, STRENGTHEN AND
FACILITATE THE GROWTH OF BARANGAY MICRO
BUSINESS ENTERPRISES (BMBE'S) TO HELP THIS
SECTOR CONTINUE TO FLOURISH AMIDST PUBLIC
HEATH EMERGENCIES, NATURAL CALAMITIES AND
GLOBAL ECONOMIC SHOCKS AS WELL AS AID THEM IN
INNOVATING AND DIGITIZATION THROUGH THE USE
OF ONLINE PAYMENT GATEWAY FACILITIES.

SEC. 2. Sec. 3 (a) of Republic Act No. 9178, is hercby amended to read as
follows:
fa) "Barangay Micro Business Enterprise,” hercinafier referred to as
MBE, refers to any business entity or enterprise engaged in the
production, processing or manufacturing of products or commodities,
induding agro-processing, trading and services, whose total assets
including those arising from loans but exclusive of the land on which the
particular business entity's office, plant and equipment are situated, shall
not be more than FIVE MILLION PESOS (Php3,000,000.00) The
Above definition shall be subjected to review and upward adjustment by
the SMED Council, as mandated under Republic Act No. 6977, as
amended by Republic Act No. 8289.

For the purpose of this Act, "service" shall exclude those rendered by any
‘one, who is duly licensed government after having passed a government
licensure examination, in connection with the exercise of one’s
profession.


(b) xxx.

SEC. 3. Sec. 4 of Republic Act No. 9178, is hereby amended to read as
follows:

Section 4, Registration and Fees - The Office of the Treasurer of each city
or municipality shall register and PROMPTLY issue a Certificate of
Authority, FREE OF CHARGE, TO ALL BMBEs WITHIN ITS
JURISDICTION UPON submission of PROOF OF TOTAL
ASSETS to enable the BMBE to avail of the benefits under this Act. Any
such applications shall be processed NOT LATER THAN FIVE (5)
days upon submission of complete documents. Otherwise, the
all be decmned registered. The Municipal or Gity Mayor may
appoint a BMBE Registration Officer who shall be under the Office of
the Treasurer. Local government units (LGU's) are encouraged to
establish a Onc-Stop-business Registration Center to handle the efficient
registration and processing of permits/licenses of BMBEs. Likewise,
LGUs shall make a periodic evaluation of the BMBE's financial status, AS
WELL AS THE NUMBER OF JOBS IT GENERATES, for

monitoring and reporting purposes.

BMBEs

ANY BMBE WITH OPERATIONS OR BRANCHES IN OTHER
JURISDICTION SHALL BE ALLOWED TO REGISTER AS
BMBE AND ENJOY ALL BENEFITS AND ASSISTANCE IN
ANOTHER JURISDICTION WITH NO PREJUDICE TO THE
BENEFITS ENJOYED FROM THE ORIGINAL
REGISTRATION,

NOTWITHSTANDING ANYTHING TO THE CONTRARY, ‘o
defray the administrative costs of registering and monitoring the BMBEs,
the LGUs may charge a fee renewal.

‘The Certificate of Authority shall be effective for a period of THREE (3)
years, renewable for ANOTHER pcriod of THREE (3) UPON
COMPLIANCE WITH THE REQUIREMENTS.

IN ALL CASES, BMBEs shall be subject to minimal bureaucratic
requirements and reasonable fees and charges

SEC. 4. Scc.5 of Republic Act No. 9178, is hereby amended to read as
follows:

Section 5. Who are Eligible to Register ANY NATURAL OR
JURIDICAL PERSON, COOPERATIVE, OR ASSOCIATION
POSSESSING THE QUALIFICATIONS DEFINED IN SECTION
3(A) IS ELIGIBLE TO APPLY FOR REGISTRATION AS A
BMBE. EACH LGU IS REQUIRED TO MAINTAIN AND
CONTINUOUSLY UPDATE A DATABASE CONTAINING ALL
REGISTERED BMBEs UNDER ITS JURISDICTION.

SEG. 5. Scc.7 of Republic Act No. 9178, is hereby amended to read as
follows:
Section 7. Exemption from Taxes and Fees All BMBES shall be exempt
from tax for income arising from the operations of the enterprise.

FIRST TIME BMBE REGISTRANTS SHALL, IN ADDITION,
BE EXEMPT FROM LOCAL TAXES, FEES AND CHARGES

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FOR THE FIRST THREE (3) YEARS OF OPERATION
SUBJECT TO SEMI-ANNUAL SUBMISSION OF PROOF OF
EMPLOYMENT GENERATED IN THE LOCALITY

SEG. 6. Scc.9 of Republic Act No. 9178, is hereby amended to read as

follows:

Section 9. Credit Delivery upon the approval of this Act, the land Bank
of the Philippines (LBP), the Development Bank of the Philippines (DBP),
the SMALL BUSINESS CORPORATION (SB CORPORATION,
and the People's Credit and Finance Corporation (PCFC) shall set up a
special credit window that will service the financing needs of BMBEs
registered under this Act consistent with the Banko Sentral ng Pilipinas
(BSP) policies; rules and regulations. The Government Service Insurance
System (GSIS) and Social Security System (SSS) shall likewise set up a
special credit window that will serve the financing needs of their respective
members who wish to establish a BMBE. ‘The concerned financial
institutions (FIs) encouraged to wholesale the finds to accredited private
financial institutions including community-based organizations such as
credit, cooperatives, non-government organizations (NGOs) and people's
organizations, which will in turn, directly provide credit support to
BMBEs.

All loans from whatever sources granted to BMBEs under this Act shall
be considered as part of THE OTHER MODES OF compliance to
REPUBLIC ACT NO. 11901, OTHERWISE KNOWN AS THE
AGRICULTURE, FISHERIES, AND SUCH DEVELOPMENT
FINANCING ACT OF 2022, AND SUCH OTHER APPLICABLE,
LAW PROVIDING A LIMIT FOR LOANS GRANTED TO
MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs). For
purposes of compliance with [Presidential Decree no. 717 and Republic
Act No. 697, as amended,] THE FOREGONG LAWS, loans granted
to BMBEs under this Act shall be computed at TWO AND A HALF
TIMES (2.5) the amount of the face value of the loans.

To minimize the risks in lending to the BMBEs, THE PHILIPPINE
GUARANTEE CORPORATION (PHILGUARANTEE) shall set up
a special guarantee window to provide the necessary credit guarantee to
BMBEs under their respective guarantee programs.

The LBP, DBP, PCFC, SSS, GSIS, PHILGUARANTEE, AND SB
CORPORATION, shall annually report to the appropriate Commitice
of Both Houses of Congress on the status of the implementation of this
provision,

‘The BSP shall formulate the rules for the implementation of this provision.
and shall likewise establish incentive programs to encourage and improve
credit delivery to the BMBEs.

TO FACILITATE THE GROWTII AND RECOVERY OF BMBES,
A BMBE REGISTERED UNDER THLS ACT SHALL BE
ENTITLED TO INTEREST-FREE LOANS FROM THE
CREDIT WLNDOW OF THE LBP, DBP, SMALL BUSINESS
CORPORATION AND PCFC; PROVLDED, THAT THE LOAN
AMOUNT SHALL:


NOT EXCEED ONE MILLION PESOS (P1,000,000.00);
NOT REQUIRE A COLLATERAL; AND

BE PAYABLE UP TO TIIREE (3) YEARS; PROVIDED,
FURTHER, THAT IN THE EVENT THAT SUCH LOAN
IS GRANTED TO ACCREDITED PRIVATE FINANCIAL
INSTITUTIONS, INCLUDING COMMUNITY BASED
ORGANIZATIONS SUCH AS COOPERATIVES, NGOS
AND PEOPLE'S ORGANIZATIONS ENGAGED IN
GRANTING CREDIT, THAT IN TURN RELEND SUCH
AMOUNT TO BMBES, ONLY THE IOAN GRANTED TO
THE BMBE SIIALL BE INTEREST-FREE AND ANY
SUCH INTEREST FOREGONE BY THE PRIVATE
FINANCIAL INSTITUTION SHALL BE DEDUCTED
FROM THE INTEREST DUE ON ITS LOAN PROVIDED
BY THE CONCERRED GOVERNMENT FINANCIAL
INSTITUTION; PROVIDED, FINALLY, THAT IN
ORDER TO PROPERLY IMPLEMENT THE
PROVISIONS OF THIS SECTION, AN AMOUNT OF
FIVE HUNDRED MILLION PESOS (P500,000,000.00)
SHALL BE APPROPRIATED TO ANSWER FOR THE
INTEREST SUBSIDY PROVIDED UNDER THIS ACT.

SEC. 7. Sec. 10 of Republic Act No. 9178, is hereby amended to read as
follows:
Section 10. Technology Transfer, Production and Management Training, and
marketing Assistance A BMBE Development Fund shall be sct up with an
endowment of Three Hundred Million pesos (P300,000,000.00) from the
Philippinc Amuscment and Gaming Corporation (PAGCOR) and shall
be administered by the SMED Council

‘The Department of Trade and Industry (D1), the Department of Science
and Technology (DOST), the university of the Philippines Institute for
Small Scale Industries (UP [SSI), Cooperative Development Authority
SDA), Technical Education and Skills Development Authority
(TESDA), and ‘Vechnology and Livelihood Resource Center (TLRC) may
avail of the said Fund for technology transfer, production and
management training and marketing assistance to BMBEs

The DTI, in coordination with the private sector and non-government
organization (NGOs), shall explore the possibilities of linking or matching-
up BMBEs with small, medium and large enterpriscs and likewise
establish incentives therefor. THE DTI, IN COORDINATION
WITH THHE DILG, SHALL ENACT PROGRAMS THAT
PROVIDES BMBEs WITH VARIOUS TECHNICAL AND
MARKETING ASSISTANCE, SUCH AS, BUT NOT LIMITED,
TO BUSINESS MATCHING ACTIVITIES, PRODUCT
DEVELOPMENT, DESIGN ASSISTANCE, TRADE FAIRS,
ACCESS TO SHARED SERVICE FACILITIES, OVERSEAS
MARKETING PROMOTIONS, AND _ INCLUDING
ENTREPENEURSHIP AND SKILLS DEVELOPMENT,
REFERRALS TO OTHER MSME PROGRAMS FROM OTHER
DEPARTMENTS AND AGENCIES, AND OTHER RELATED
ENABLING ACTIVITIES.

THE DEPARTMENT OF SCIENCE AND TECHNOLOGY
(DOST), IN COORDINATION WITH THE DILG AND OTHER

5


RELEVANT GOVERNMENT AGENCIES, SHALL ALSO
IMPLEMENT PROGRAMS GEARED TOWARDS PROVIDING
BMBEs WITH APPROPRIATE = TECHNOLOGY
INTERVENTIONS WHICH CAN HELP IMPROVE THEIR
PRODUCTION PROCESSES, ACCOUNTING SYSTEMS, AND
OTHER AREAS OF BUSINESS OPERATIONS.

‘The DTI, in behalf of the DOST, UP ISSI, CDA. TESDA and TLRC
shall be required to furnish the appropriate Committees of both Houses
‘of Congress a yearly report on the development and accomplishments of
their projects and programs in relation to technology transfer, production
and management training and marketing assistance extended to BMBEs.

SEC. 7. A new Section 10-A is hereby inserted to read as follows:

SEC. 10-A. BMBE EDUCATION AND TRAINING. - THE DTI,
IN COORDINATION WITH THE DEPARTMENT OF
EDUCATION (DEPED), TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT AUTHORITY (TESDA), AND
COMMISSION ON HIGHER EDUCATION (CHED), SHALL
PROVIDE FREE TRAININGS, COURSES, AND OTHER
DEVELOPMENT PROGRAMS FOR OWNERS AND
EMPLOYEES OF REGISTERED BMBEs TO IMPROVE THEIR
BUSINESS PRACTICES AND TO ENABLE THEM TO
INNOVATE IN LIGHT OF RAPID TECHNOLOGICAL
CHANGES.

SEC. 8. Appropriatons. - In addition to the amount provided under Section 5
of this Act, amending Section 9 of the Barangay Micro Business Enterprises Act of
2002, th ssary for the implementation of this Act shall be charged against
the respon ency's current appropriations. Thercaficr, such sums as
for the continued implementation of this Act shall be included in the annual Gi
Appropriations Act.

SEC. 9. Implementing Rules and Regulations ‘The Sceretary of the Department
of Trade and Industry, in consultation with the Sccretarics of the DILG, DOF, and
the BSP Governor shall formulate the necessary ruled and regulations to implement
the provisions of this Act within ninety (90) days after its approval. The rules and
regulations issued pursuant to this section shall take effect fifteen (15) days after its
publication in a newspaper of general circulation,

SEG. 10. Scparability Clause - If any provision or part hercof, is held invalid
or unconstitutional, the remainder of the law or the provision not otherwise affected
shall remain valid and subsisting.

SEG. 11. Repeating Clause All laws, presidential decrees, executive orders,
proclamations or administrative regulations that are inconsistent with the provisions
of this Act arc hereby amended, modified, superseded or repealed accordingly.

SEG. 12. Effectvity This Act shall take effect fifteen (15) days afier its

publication in the Office Gazette or in at least two (2) newspapers of general
circulation.

Approved.