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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
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SENATE 
S. B. NO. 138
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72 JUL “7 P3 *09
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Introduced by SENATOR JOEL VILLANUEVA
AN ACT
STIMULATING THE RECOVERY, GROWTH AND DEVELOPMENT 
OF THE MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) 
FOR JOB GENERATION AND PRESERVATION, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Micro, small and medium enterprises (MSMEs) are the backbone of our 
economy. They play a vital role in developing the Philippine economy by creating 
jobs for the country’s labor force, providing healthy competition to large corporations 
by conveniently offering goods and services to customers, and promoting 
entrepreneurship by being starting points for what could potentially be larger 
corporations. According +o the Department of Trade and Investment (DTI), MSMEs 
account for a staggering 99.5% of all business in the country and account for 62.66% 
of the country’s employment in 2020.1
Despite their size as a sector, MSMEs have become extremely vulnerable 
and continue to face many growth challenges as they recover from the effects of the 
COVID-19 pandemic. In a study conducted by the Asian Development Bank Institute 
on February 2021, it was found that 61.7% of micro, 49.1% of 3mall. and 35 8% of 
medium sized businesses had little to zero revenue and were forced to temporarily 
close at the advent of the pandemic.2 In addition, 68% of micro, 59.5% of small, and 
78.6% of medium sized businesses were constrained to retrench their employees.3 
To make matters worse, MSME’s have recently had to endure further business 
losses as a result of natural calamities such as typhoons and global economic 
events such as the Russia-Ukraine conflict.
1 https://www.dti.gov.ph/resources/msme-statistics/
2 https://wvwv.adb.org/sites/default/files/publication/677321/adbi-wp1216.pdf
3 Id.
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Presently, any momentum to spur recovery for the sector as a result of the 
opening of the economy is stifled in the wake of increased prices in oil and basic 
commodities and consequently, increased operational cost. To assist them in their 
recovery, we need to throw these businesses a lifeline in order to give them 
breathing room to generate revenue, while retaining all those under their employ.
Thus, this bill aims to support MSMEs by providing them with interest-free 
financial assistance, and subsidies to aid them in paying their employees’ wages. 
This bill also seeks tc establish a contingent fund to cushion any adverse impact 
brought about by natural disasters, public health emergencies, and other related 
contingencies that may further cripple this already struggling industry.
The immediate passage of this bill is earnestly sought.
SENATOR JO^ VILLANUEVAJU-
1)


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
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cf iijf d rrrrt.ir]’
•22 JUL-7 P3«9
)
RECEiVTD BV:
SENATE 
S. B. NO. i38
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
STIMULATING THE RECOVERY, GROWTH, AND DEVELOPMENT 
OF THE MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) 
FOR JOB GENERATION AND PRESERVATION, 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER 
PURPOSES
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Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the “MSME Stimulus Act.”
SEC. 2. Declaration of Policy. - The State recognizes that micro, smaii and 
medium enterprises (MSMEs) comprise the most significant number of 
establishments in the Philippines and are one of the biggest generators of 
employment in the country. Thus, it is hereby declared the policy of the State to 
support, strengthen and facilitate the growth of MSMEs for job generation and 
preservation as the sector recovers from the crippling effects of the COVID-19 
pandemic, rising prices of oil, inflation, and global economic shocks. For this 
purpose, the State shall support and establish programs for MSMEs' growth and 
development to achieve these objectives.
SEC. 3. Coverage. - This Act shall cover all MSMEs in the country affected by 
disasters, public health emergencies, war, armed conflict, economic crises, and 
other related contingencies, such as technological or policy-related disruptions 
and analogous causes.


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SEC. 4. MSME Growth Stimulus Program. - An MSME Growth Stimulus 
Program is hereby established to extend assistance, strengthen and facilitate the 
growth and development of MSMEs for regional job generation and preservation.
SEC. 5. Modes of Assistance. - The MSME Growth Stimulus Program shall 
have the following components, without prejudice to expansion or creation of 
other modes of assistance:
a) 
Interest Free Loans. The Land Bank of the Philippines (LBP) and the 
Development Bank of the Philippines (DBP) shall provide an interest-free 
loan program to qualified MSMEs to support gro'vth assistance, regional job 
creation and continued business operations (MSME Growth Assistance 
Program).
The MSME Growth Assistance Program shall be subject to the following 
conditions and such other requirements as may be imposed by the 
Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP):
1) 
The maximum loanable amount shall be equivalent to one hundred 
fifty percent (150%) of the MSME’s labor and overhead costs for six 
(6) months;
2) 
The loan shall be payable within three (3) years; and
3) 
No collateral shall be required as security for the loan, except if the 
amount of the loan exceeds Three Million Pesos (Php3,000,000.00).
b) 
Wage Subsidy. The DOF, through the Social Security System (SSS), shall 
provide a wage subsidy to cover all or a portion of the wages of the 
employees of qualified MSMEs (MSME Wage Assistance Program). The 
wage subsidy shall be subject to the following conditions and such other 
requirements as may be imposed by DOF and SSS, in coordination with the 
Department of Labor and Employment (DOLE):
1) 
The wage subsidy shall be based on the regional minimum wage per 
month, but not to exceed Eight Thousand Pesos (Php8,000.00) per 
employee;
2) 
The Wage shall only cover rank-and-fHe employees of qualified 
MSMEs; and
3) 
The term of the subsidy shall be for a maximum period of three (3) 
months.


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SEC. 6. Eligibility Requirements for MSME Growth Stimulus Program. - To
be eligible to avail of the benefits under the MSME Growth Stimulus Program, 
MSMEs must be:
a) 
Duly-registered with the Bureau of Internal Revenue, and no tax- 
related cases or proceedings are pending against it. For this purpose, 
a Certificate of Good Standing or such other appropriate proof shall be 
presented;
b) 
Duly registered with, and compliant with all its obligations under all 
government social security programs, including, but not limited, to the 
Social Security System (SSS), Home Development Mutual Fund (Pag- 
Ibig) and Philippine Health Insurance Corporation (PhilHealth);
c) 
Have no pending labor cases; and
d) 
As a condition for the availment of the benefits of this Act, must 
commit to maintain its personnel from the time of availment of the 
benefits under this Act up to twelve (12) months thereafter. During the 
same period, it shall further commit to refrain from terminating its 
employees due to authorized causes as provided under Article 283 of 
the Labor Code of the Philippines, unless in exceptional and 
meritorious cases as determined by the Secretary #of Labor and 
Employment.
Non-compliance with the foregoing conditions shall render any loan obtained 
under the Program to be immediately payable with corresponding legal interest. 
In the case of wage subsidy, the non-compliant MSME shall imrnediately refund 
all benefits received under the Program, with the corresponding legal interest.
SEC. 7. Contingency Fund for MSMEs’ Growth Stimulus Program. - There is 
hereby established as a special account with the National Treasury, a 
contingency fund called the MSME Stimulus Contingency Fund for selective 
implementation in priority job-generating industries' sectors such as agri-food and 
fishing or areas affected by disasters, public health emergencies, armed conflict, 
and other related contingencies, such as technological or policy-related 
disruptions and analogous causes.
SEC. 8. Appropriations. - An amount of One Hundred Billion Pesos 
(Php100,000,000,000.00) shall be appropriated for the initial implementation of 
this Act, to be divided as follows:
a) Forty Billion Pesos (Php40,000,000,000.00) for the MSME Growth
Assistance, which shall be lodged under the budget of the Department of
Trade and Industry (DTI);


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b) 
Forty Billion Pesos (Php40)000,000,000.00) for the MSME Wage 
Assistance, which shall be lodged under the budget of DOF; and
c) 
Twenty Billion Pesos (Php20,000,000,000.00) for the MSME Stimulus 
Contingency Fund, which shall be lodged under the budget of DOF.
Thereafter, an amount of not less than Twenty Billion Pesos 
(Php20,000,000,000.00) shall be appropriated annually for the implementation of 
this Act, and augmented by available funds from unprogrammed funds and 
savings realized by any government agency or instrumentality under the 
Executive Department.
SEC. 9. Implementing Rules and Regulations. - The DOF, DTI and DOLE, 
upon consultation with appropriate government agencies and other stakeholders, 
shall promulgate the necessary rules and regulations to implement this Act within 
sixty (60) days from its effectivity.
SEC. 10. Separability Clause. - Any portion or provision of this Act that is 
declared unconstitutional or invalid shall not have the effect of nullifying other 
portions or provisions hereof as long as such remaining portions can still subsist 
and be given effect in their entirety.
SEC. 11. Repealing Clause. - All laws, ordinances, rules, regulations, other 
issuances, or parts thereof, which are inconsistent with this Act, are hereby 
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,
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