NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
EXPLANATORY NOTE
Micro, Small, and Medium Enterprises (MSMEs) account for 99.5% of the total number of
establishments in the country, micro accounting for 89%, small for 10% and medium for 0.5%. These
enterprises employ 62.4% of the total labor force which translates to 5,510,760 jobs. They also
account for 25% of the country’s total exports revenue, and comprise 60% of all exporters. There is
no denying that this sector is the backbone of the Philippine economy. The country relies on the
success of its MSMEs to boost the economy to its maximum potential. MSMEs facilitate local job
creation, trade and production in the country.
However, due to restraints to capital and funding resources, many MSMEs fall victim to
usurious lenders, such as the so-called “5-6” when their need for money arises. Borrowers find it
hard to dig their way out of debt because of unconscionable interest rates from these unregistered
lenders. Thus, to address the restraints to funding sources of these enterprises, the Government shall
endeavor to create a money lending system that is reasonable and legitimate.
This Bill aims to institutionalize the Pondo sa Pagbabago at Pag-asenso (P3) to provide micro
enterprises a better alternative of financing.
For the foregoing reasons, the passage of this bill is earnestly sought.
VIRGILIO S. LACSON
Manila Teachers Party-list
August 1, 2022
12:18 pm
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NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
AN ACT
PROMOTING
ENTREPRENEURSHIP
BY
ESTABLISHING
A
SOCIALIZED
MICROFINANCING PROGRAM FOR MICRO ENTERPRISES THROUGH THE PONDO
SA
PAGBABAGO
AT
PAG-ASENSO
PROGRAM,
AND
APPROPRIATING
FUNDS
THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Title. – This Act shall be known as the “Pondo sa Pagbabago at Pag-asenso
Act” or the “P3 Act”.
SEC. 2. Declaration of Policy. – It is the declared policy of the State to foster national
development, promote inclusive growth, and reduce poverty by promoting the growth of micro
enterprises that facilitate local job creation, production and trade in the country. Towards this end,
the State shall develop policies, plans and programs, and initiate means to encourage entrepreneurial
activities, and to ease the constraints and challenges to micro enterprises, particularly on access to
financing.
SEC. 3. Objectives. – The objectives of this Act are:
a.
To provide an affordable, accessible, and simple micro financing program for the
country’s micro enterprises, especially those in the poorest populations;
b. To provide a better alternative to informal lenders or the so-called “5-6” money
lending system availed of by micro enterprises;
c.
To bring down the interest rate at which micro finance is made available to micro
enterprises; and
d. To boost the development of entrepreneurship and the micro, small and medium
enterprise (MSME) sector, particularly the micro enterprises.
SEC. 4. Creation of the Pondo sa Pagbabago at Pag-asenso (P3) Fund. – There is hereby
created the Pondo sa Pagbabago at Pag-asenso Fund, hereinafter referred to as the “P3 Fund”, which
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shall be lent out to qualified micro enterprises under such terms and conditions that will meet the
purposes of this Act.
The beneficiaries of the P3 Fund shall be the micro enterprises, as defined under Republic Act
No. 6977, as amended, otherwise known as the “Magna Carta for Micro,
Small and Medium
Enterprises (MSMEs)”.
The fund shall be primarily accessible through accredited partner financial institutions (PFIs)
such as rural banks, thrift banks, development banks, cooperatives with license to lend, non-stock
savings and loan associations, microfinance non-government organizations, or lending companies.
For efficient implementation and operation, cooperatives except cooperative banks and
insurance cooperatives shall be under the sole supervision and examination of the Cooperative
Development Authority (CDA); all other financial entities, corporations and financial intermediaries,
such
as
non-government
organizations,
financing
companies,
non-stock
savings
and
loan
associations, microfinance non-government organizations, and lending investors shall be under the
Securities and Exchange Commission (SEC); banks shall be under the Bangko Sentral ng Pilipinas
(BSP); and insurance companies shall be under the Insurance Commission (IC).
Cooperative banks shall be under the supervision and examination of the CDA and BSP;
while insurance cooperatives shall be under the supervision and examination of the CDA and
Insurance Commission (IC).
SEC. 5. Lead Implementing Agency. – The Small Business Corporation (SB Corp.), the
financing arm of the Department of Trade and Industry (DTI), shall be the lead implementing agency
for the P3 Fund. The SB Corp. shall handle the fund delivery to micro enterprises through the
following modes:
a.
Direct lending;
b. Lending through accredited PFIs.
With the goal to achieve greater outreach to all provinces and barangays of the country,
financial technology-enabled systems and processes can be utilized in the implementation of the P3
program.
To support annual administrative and operating expenses of the SB Corp., an amount of not
more than five percent (5%) of the total loans disbursed can be used by the Corporation.
SEC. 6. Features of the P3 Fund.  –  The P3 Fund shall have the following features:
a.
The loanable amount for individual loans shall be set and regularly
reviewed by the
Micro, Small and Medium Enterprise Development (MSMED) Council;
b. The allowable interest rate, which includes service fee and other charges, shall not exceed
twelve percent (12%) per annum. Reasonable and actual cost of collection may be
allowed upon proper justification;
c.
The interest earnings shall accrue to the P3 Fund;
d. There shall be no collateral requirement from the P3 Fund loan beneficiaries; and
e.
The lenders shall have a collection mechanism, whereby payments are made on a daily,
weekly, or monthly basis, or depending on the livelihood project income cycle. It shall be


the duty of the lender to collect the loan principal and the interest payments from the
borrower.
SEC. 7. Policy Oversight Function. – The MSMED Council shall monitor the utilization and
disbursements of the P3 Fund. It shall submit to the President of the Philippines and to Congress,
through the Congressional Oversight Committee on Micro, Small and Medium Enterprise
Development (COC-MSMED), a yearly report on the status   of the P3 Fund.
SEC. 8. Appropriations. – The initial amount for the implementation of this Act
shall be
charged against the current year’s appropriations of the Small Business Corporation. Thereafter,
such amount necessary shall be included in the annual General     Appropriations Act.
SEC. 9. Implementing Rules and Regulations. – Within sixty (60) days from the approval of
this Act, the DTI shall formulate and promulgate the necessary rules and regulations to implement
the provisions of this Act.
SEC. 10. Separability Clause. – If any part or section of this Act is declared unconstitutional,
such declaration shall not affect in any manner other parts or sections hereof.
SEC. 11. Repealing Clause. – Section 22 of Republic Act No. 8367 is hereby repealed. All
laws, decrees, proclamations, issuances, or ordinances that are contrary to or inconsistent with the
provisions of this Act are hereby amended, repealed or modified accordingly.
SEC. 12. Effectivity. – This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.
Approved,