TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
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o: !.UV
25 J1JL21 AlO 36
SENATE
S. No. 734
RHCEIV .[> 
^
Introduced by Senator FRANCIS N. PANGILINAN
AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE 
POVERTY, ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION 
THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM AND 
PROVIDING SUPPORT, BENEFITS AND APPROPRIATIONS THEREFOR
EXPLANATORY NOTE
Poverty remains a major problem in the Philippines. While national poverty 
incidence decreased to 15.5% in 2023 from 18.1% in 2021, millions of Filipinos still 
struggle to meet their basic needs. To address this, new models are needed to foster 
self-reliance and community empowerment.
Social enterprises (SEs) offer a powerful, innovative solution to poverty 
reduction. Unlike traditional businesses, SEs are mission-driven organizations that 
generate wealth while primarily pursuing social objectives. They engage the poor as 
partners (as workers, suppliers, clients, and even in governance) creating both 
economic and social value that directly benefits marginalized communities.
A report by the British Council and the Philippine Enterprise Network estimated 
approximately 164,473 social enterprises operating in the Philippines. Their top 
objectives include generating employment, alleviating poverty, and empowering local 
marginalized groups. This demonstrates their vital roles and significant contribution to 
sustainable and inclusive development.


This bill establishes the Poverty Reduction through Social Entrepreneurship 
(PRESENT) Program, a national framework to support and integrate SEs into the 
government's overall anti-poverty strategy. It recognizes SEs as crucial partners in 
achieving Sustainable Development Goals, particularly zero hunger, zero poverty, 
reduced inequality, decent jobs, and inclusive communities.
The PRESENT Program will provide essential incentives and benefits, including 
access to capital, tax exemptions, marketing assistance, and preferential treatment in 
government procurement. By creating an enabling environment for SEs to grow and 
become sustainable, this measure will institutionalize their role as a transformative 
force, ensuring that economic growth translates into significant improvements for the 
poor and marginalized.
In view of the foregoing, the approval of this bill is earnestly sought.
FRANCIS^ PANGILINAN
Stator


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TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JIJL21 m:37
SENATE
S. No. 734
Introduced by Senator FRANCIS N. PANGIUNAN
AN ACT
ORDAINING THE PROMOTION OF SOCIAL ENTERPRISES TO ALLEVIATE 
POVERTY, ESTABLISHING FOR THE PURPOSE THE POVERTY REDUCTION 
THROUGH SOCIAL ENTREPRENEURSHIP (PRESENT) PROGRAM AND 
PROVIDING SUPPORT. BENEFITS AND APPROPRIATIONS THEREFOR
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled:
CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. - This Act shall be known as the "Poverty Reduction 
through Social Entrepreneurship Act."
Sec. 2. Statement of Policy. - As provided in the Constitution of the Republic of 
the Philippines, it is the declared policy of the State to 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.
In Article II, Sections 10 and 11, it is further declared that the State shall provide 
social justice in all phases of national development and that the State values the 
dignity of every human person and guarantees full respect for human rights.
In Article XII, Section 1, it is further stated that the goals of the national economy 
are a more equitable distribution of opportunities, income, and wealth; a sustained 
increase in the amount of goods and services produced by the nation for the benefit


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of the people; and an expanding productivity as the key to raising the quality of life 
for all, especially the underprivileged.
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. However, the State shall protect Filipino enterprises 
against unfair foreign competition and trade practices.
The State also 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.
Toward 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. 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.
The State shall likewise ensure that the provision for technical and financial 
assistance, incentives and other services are free from any condition that might 
infringe upon the autonomy or organizational integrity of the social enterprises to 
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.
The State, through the creation of an enabling policy environment for social 
enterprises, affirms its commitment to the Sustainable Development Goals (SDGs). 
Social enterprises shall form part of national and local development plans toward 
accelerating the achievement of the SDGs, especially the targets of zero poverty; no 
hunger; gender equality; decent work and inclusive economic growth; reducing 
inequalities; and sustainable production and consumption.
The State shall pursue a low carbon development pathway, to which social 
enterprises engaged in renewable energy, environmental protection, circular 
economy, and other such activities, can contribute. This is consistent with the


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commitment of the State to its Nationally Determined Contribution (NDC) under the 
global Paris Climate Agreement, which it ratified in 2017.
The State affirms the role of women in nation building and ensures the 
fundamental equality of men and women before the law. It shall promote 
empowerment of women and pursue equal opportunities for women and men and 
ensure equal access to resources and to development results and outcome. Further, 
as set out in Republic Act 32 No. 9719, otherwise known as the "Magna Carta of 
Women Act of 2009," the State shall ensure the full integration of women's concerns 
in the mainstream of development, shall provide ample opportunities to enhance and 
develop their skills, acquire productive employment, and contribute to their families 
and communities to the fullest of their capabilities.
Sec. 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, for purposes of this Act, shall also refer to a Social 
Enterprise with the Marginalized as Primary Stakeholders (SEMPS). A SEMPS 
is a social enterprise that 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. A SEMPS engages and invests 
in the poor 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 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 SEMPS also uses its surplus or profits and 
mobilizes other resources to assist the poor to become partners in SE or 
value chain management/governance and to become partners in 
community, sectoral and societal transformation.


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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 SEMPS. 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. Councils\\qW 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


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principles as defined in R.A. 15 6938, as amended by R.A. 9520, otherwise 
known as the "Philippine Cooperative Code of 2008";
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 s\\d\\ 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 principies 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:


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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 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:
0. 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


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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. 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 are 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


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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 of 
conquest or colonization, or at the time of inroads of non-indigenous


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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 11 of Republic Act No. 8371, otherwise known as 'The 
Indigenous Peoples Rights Act of 1997" (IPRA of1997);
(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


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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-soda! care); and inclusion (assistive 
device/technology, personal assistance, sign language interpreter, 
accessibility);
u. Non-Government Organization or NGO shaW 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, 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. Peopie's Organization or PO shaW 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 Disabiiity 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
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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; 
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;
z. 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;
didi.Resource mobiiization 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 
program or development interventions among the marginalized sectors;
bb. 5£6F/?shall refer to the SE Guarantee Fund Pool created under this Act;
cc. 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;
dd. 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;
ee. Social entrepreneur shhW 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;
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ff. Soda! entrepreneurship entails innovations designed to explicitly improve 
societal wellbeing, housed within entrepreneurial organizations, which 
initiate, guide or contribute to change in society; 
gg. Soda!Indusion strategysh^W 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; 
hh. Soda! Investors shd\\ 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;
ii. Soda! 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; 
jj. Soda! 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, 
kk. 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;
II. 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,
12


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sector or society as a whole. This shall include building the leadership and
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management capacity and role of the poor in social enterprises;
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mm. Value chain shall refer to value-adding economic activities that an enterprise
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is interlinked with in the process of producing goods and/or services to serve
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its chosen market. A value chain typically consists of: 1) inbound distribution
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or logistics, 2) manufacturing operations, 3) outbound distribution or
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logistics, 4) marketing and selling, and 5) after-sales service. These activities
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are supported by 6) purchasing or procurement, 7) research and
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development, 8) human resource development, and 9) organizational
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development. A SE that understands and manages its value chain improves
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its capability to create economic, environmental and social values toward
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improving the position and benefits of the poor in the value chain and toward
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ensuring the viability and sustainability of the enterprise.
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nn. Vulnerable sectors shall refer to groups who are at-risk of any potential
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event, loss or danger.
16 
CHAPTER II
17 
POVERTY REDUCTION THROUGH SOCIAL ENTERPRISE
18 
Sec. 4. Social Enterprise (SE); General Concept and Coverage - A Social Enterprise
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(SE), for purposes of this Act, refers to a Social Enterprise with the Marginalized as
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Primary Stakeholders (SEMPS) as defined in Sec. 3 (a) of this Act.
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An SE employs any of the following development strategies in the pursuit of its
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social mission: 1) empowerment strategy; 2) social inclusion strategy: 3)
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intermediation strategy: and 4) resource mobilization strategy.
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In the case of social enterprises organized as stock corporations, partnerships, or
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sole proprietorships, these social enterprises should invest at least 60% of their net
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revenues to sustain the fulfillment of their social mission and provide transformational
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services for the wellbeing of the marginalized sector they serve. They must not be a
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branch, subsidiary or division of a private business enterprise, regardless of the size
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of such private business enterprise, nor may its policies be determined by a private
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business enterprise. Provided, that this shall not preclude an SE from accepting
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subcontracts from large private business enterprises or firms or from joining in
32 
cooperative or joint-venture activities with other SEs or foundations.
13


1 
Sec. 5. Qualifications for Benefits and Incentives. - To qualify for the benefits and
2 
incentives provided for in this Act, the SE shall:
3 
a. Provide or facilitate the provision of a combination of transactional and/or
4 
transformational services to improve the position and benefits derived by the
5 
poor from the SE and the value chain or economic subsector where the SE
6 
is located, including becoming worker-owners, supplier-owners, supervisors
7 
and managers, active members and leaders in governing bodies of the SE or
8 
its allied organizations;
9 
b. Invest fifty one percent (51%) of its surplus, profits or mobilize other
10 
resources to assist the poor to become partners in SE or value chain
11 
management/governance and/or to become partners in community, sectoral
12 
and societal transformation;
13 
c. Pursue a pro-active contribution to resolving social and environmental
14 
problems and generate profit or surplus with due regard to social and
15 
environmental costs;
16 
d. Be engaged in an economic activity within the sectors of agriculture and
17 
fisheries, industry and services which, for purposes of this Act, shall refer to
18 
an activity in any of the economic subsectors;
19 
e. Distribute a substantive part of the wealth created by the enterprise to the
20 
poor in the form of services, dividends and other forms of benefits, and
21 
payments and incentives for products or services rendered consistent with
22 
the principles of fair trade;
23 
f. Be duly registered with the appropriate agencies as provided under Republic
24 
Act No. 11232, or the "Revised Corporation Code of 2018;" Republic Act No.
25 
9520, or the "Revised the Cooperative Code of the Philippines of 2009;"
26 
Republic Act No. 9501, or the "Magna Carta for Micro, Small and Medium
27 
Enterprises of 2008;" Republic Act No. 9178, or the Barangay Micro Business
28 
Enterprises Act of 2002;" Republic Act No. 10693, or the "Microfinance NGOs'
29 
Act of 2015;" and other relevant laws; and
30 
g. Comply with labor standards under Presidential Decree No. 442 as amended,
31 
otherwise known as the Labor Code of the Philippines. Social enterprise
32 
resource institutions may also avail of support from government as partners
14


1 
for building the capability and sustainability as well as developing an enabling
2 
environment for social enterprises to flourish, provided they have:
3 
a. a registration as a legal entity in the Philippines;
4 
b. a dedicated program supporting social enterprises;
5 
c. a track record of at least three (3) years of implementation of a dedicated
6 
SE program;
7 
d. at least three (3) qualified social enterprises vouching for their them.
8 
International social enterprise resource institutions and their subsidiaries
9 
operating in the Philippines must partner with a qualified local social
10 
enterprise resource institution to avail of government support.
11 
Financial sustainability shall not be a prerequisite for the availment of
12 
incentives and benefits under this Act. Provided that, social enterprises that
13 
have not achieved financial sustainability may be eligible to avail of the
14 
services, assistance and Incentives set forth in this Act by presenting a
15 
workable strategy to achieve financial sustainability over a reasonable
16 
period.
17 
Sec. 6. Formulation of a Poverty Reduction through Social Entrepreneurship
18 
(PRESENT) Program. — To promote the development of a SE sector with the
19 
marginalized sectors as primary stakeholders, a comprehensive and fully-integrated
20 
Poverty Reduction Through Social Entrepreneurship (PRESENT) Program shall be
21 
formulated, guided by the following principles:
22 
a. Incorporating the PRESENT Program in the government's poverty reduction
23 
drive as a major sustainable and comprehensive strategy;
24 
b. Rationalizing poverty reduction programs by streamlining and coordinating the
25 
various anti-poverty programs of the government to reduce inefficiency and
26 
duplication and to improve the effectiveness of each program;
27 
c. Ensuring people's participation, access to information, and empowerment by
28 
mobilizing civil society organizations and social movement groups working
29 
with the poor;
30 
d. Promoting sustainable programs that reduce inequality In incomes across
31 
economic sectors and increase self-reliance among the poor;
15


1 
e. Enabling SEs to overcome constraints and to take advantage of opportunities
2 
for enhancing the position and benefits of the poor in economic subsectors
3 
and value chains;
4 
f. Recognizing women and men as equal partners in development and nation
5 
building and ensuring women's and men's equal rights and access to SE's
6 
resources, gender shall be mainstreamed in the program formulation; and
7 
g. Developing sustainable mechanisms for the provision of quaiity and accessible
8 
social services to the poor.
9 
The planning framework of the PRESENT Program and its planning process shall
10 
ensure that the marginalized sectors are engaged as primary stakeholders. It shall
11 
add value and complement ecosystem-based, area-based, community-based, etc.
12 
tools and processes in local economic development by promoting and utilizing the
13 
economic subsector as a strategic unit of analysis and planning SE development
14 
interventions.
15 
The PRESENT Program shall identify and develop key SEMPS and resource
16 
institutions as partners in strategic economic subsectors that have the potential for
17 
growth and where large numbers of the poor are concentrated. SEMPs shall be
18 
developed as vehicles to ensure that the marginalized sectors benefit the most from
19 
sustainable subsector development. PRESENT medium-term and annual development
20 
plans shall be formulated in synchrony with the medium-term development plan of
21 
the national government.
22 
Sec. 7. Lead Agency. — The Department of Trade and Industry (DTI) shall serve
23 
as the central planning, coordinating, implementing and monitoring body of the
24 
program. In the implementation of this Act, the DTT shall perform the following
25 
functions:
26 
a. Work in close coordination with the Department of Social Welfare and
27 
Development (DWSD) and the Department of Agriculture (DA) in targeting
28 
the different sectors intended to be benefiitted by the program;
29 
b. Disseminate the information relating to the program;
30 
c. Assist the Social Enterprise Development Council in calling upon the
31 
Departments and Agencies in fulfilling the objectives of this Act;
16


1 
d. Recommend to the SEDC measures and policies for the responsive delivery of the
2 
commitments under this Act;
3 
e. Provide seminar-workshops and training programs to educate the target sectors
4 
about the conditions and other actions pertinent to this Act;
5 
f. Perform such other functions as may be necessary or incidental to the proper
6 
implementation of this Act.
7 
Sec. 8. Social Enterprise Development Council. — To carry out the policy declared
8 
under this Act, a Social Enterprise Development Council (SEDC), hereinafter referred
9 
to as the Council, is hereby created as an agency attached to the Department of Trade
10 
and Industry (DTI). It shall be the primary agency tasked to carry out the promotion,
11 
growth and development of SEMPs in the country.
12 
Given the complexities of a social enterprise and its constituents, the Council shall
13 
be composed of the following:
14 
a. Secretary of Trade and Industry, as Chairperson;
15 
b. Secretary of Agriculture, as Co-chairperson;
16 
c. Secretary of Social Welfare and Development, as Vice chairperson;
17 
d. SE sector head representative, as Co-vice chairperson;
18 
e. Lead Convener of the National Anti-Poverty Commission;
19 
f. Director-General of the National Economic Planning and Development
20 
Agency;
21 
g. Vice Chair for Basic Sectors of the National Anti-Poverty Commission;
22 
h. Secretary of the Interior and Local Government;
23 
i. Secretary of Finance;
24 
j. Governor of the Bangko Sentral ng Pilipinas;
25 
k. Secretary of Environment and Natural Resources;
26 
I. Secretary of Agrarian Reform;
27 
m. Secretary of Science and Technology;
28 
n. Secretary of Labor and Employment;
29 
o. Secretary of Education;
30 
p. Secretary of Transportation;
31 
q. Secretary of Information and Communications Technology;
32 
r. Chairperson of the Commission on Higher Education;
17


1 
s. Chairperson of the Cooperative Development Authority;
2 
t. Chairperson of the Securities and Exchange Commission;
3 
u. Chairperson of the Philippine Commission on Women;
4 
V. Director-General of the Technical Education and Skills Development
5 
Authority;
6 
w. Nine (9) representatives from SEMPS, with three (3) representatives each
7 
from the main island groupings of Luzon, Visayas, and Mindanao, where at
8 
least one of the three representatives from each island grouping shall be a
9 
woman.
10 
Sec. 9. Powers and Functions. — The Council shall have the following powers
11 
and functions:
12 
a. Formulate policies and plans to develop and promote, coordinate, synergize,
13 
integrate, and ensure 
compatibility and complementation of policies and
14 
programs for SEs as well as other anti-poverty reduction initiatives consistent
15 
with national development 
objectives.
16 
b. Formulate policies and plans to ensure the resilience and preparedness of
17 
social enterprises for disaster risk reduction and management as well as
18 
develop capacities of social enterprises to respond, recover and build back
19 
better in the face disasters and pandemics.
20 
c. Issue certificate of qualification upon determination that the criteria set for
21 
this purpose have been fully satisfied: Provided, That the certificate of
22 
qualification shall be valid only tor such period as may be prescribed under
23 
the implementing rules and regulations of this Act;
24 
d. Oversee the successful implementation of the PRESENT Program and other
25 
SE programs;
26 
e. Identify and access sources of financing to expand the SE sector;
27 
f. Monitor and evaiuate the performance of programs and projects for
28 
appropriate incentives;
29 
g. Call upon any government agency to carry out and Implement programs and
30 
projects identified by the Council and to assist in clarifying issues and finding
31 
resolution to problems that concern their respective offices with respect to
18


1 
the implementation of the PRESENT Program enunciated under this Act or
2 
any development program for SEs.
3 
h. Call upon people's organizations, non-government organizations, the
4 
academe and other sectors to provide advice on matters pertaining 
to SEs
5 
and conduct of transactional and transformational services 
to farmers,
6 
producers, workers, consumers and other stakeholders;
7 
i. Submit annual and other periodic reports to the President and the Congress
8 
of the Philippines through the Congressional Oversight Committee;
9 
j. Promulgate such rules and regulations and exercise such other powers and
10 
functions as may be necessary to carry out the purposes of this Act, including
11 
guidelines for the administration of grant windows provided for in Section
12 
24;
13 
k. Propose the concomitant plantilla positions and structure for the personnel
14 
under it;
15 
I. Manage the funds provided for by this law, including ensuring the funds'
16 
growth where possible;
17 
m. Put in place mechanisms for accountability to marginalized stakeholders
18 
being served
19 
n. Align and synchronize the provision of support programs, benefits and
20 
incentives for SEs provided for in this Act;
21 
o. Conduct periodic audits and
22 
p. Perform such other functions as may be necessary for its effective operations
23 
and the continued enhancement, growth and development of the SE sector.
24 
Sec. 10. Designation of Permanent Representatives to the Council. — Within 30
25 
days from the effectivity of this Act, Cabinet-ranked ex-officio members of the Council
26 
shall designate a permanent representative to the council, to attend the meetings of
27 
the council in cases that the Cabinet-ranked ex officio members cannot personally
28 
attend such meetings. The designated permanent representative of any of the
29 
Cabinet-ranked members of the Council must hold a position not lower than a bureau
30 
director.
31 
Sec. 11. Term and Appointment of SE Sector Representatives. — Within 90
32 
days, DTI as Chair shall convene members of the Council from the Philippine
19


1 
Government, as identified in Section 10, who shall in turn, confirm representatives of
2 
social enterprises and social enterprise resource Institutions. Said SE and SE Resource
3 
Institution representatives must have been screened and pre-selected by the SE sector
4 
convened by DTI, DA, and DSWD, in consultation with established social enterprises
5 
and networks of SEs.
6 
The Islands of Luzon, Visayas, and Mindanao shall each have two (2)
7 
representatives who will be appointed for a term of three (3) years. While another
8 
three (3) representatives each representing Luzon, Visayas, and Mindanao shall be
9 
appointed for a term of two (2) years to ensure continuity.
10 
Upon the expiration of all the terms of these first set of officers, all terms of SE
11 
Sector Representatives shall be for three (3) years. No person shall be appointed to
12 
serve as an SE representative in the SEDC for more than a period of two (2) terms or
13 
more than six (6) years. Any vacancy in the SEDC arising from the death, incapacity,
14 
resignation, or termination of the term of an appointed SE representative shall be filled
15 
up within 90 days from the occurrence of the said vacancy. All nominations to the
16 
vacancy shall be submitted within 60 days from the occurrence of such. This process
17 
should be consistent with the previous appointment process. In the case of a vacancy
18 
arising from death, incapacity or resignation, the representative appointed to the
19 
vacancy shall serve only for the remaining period of the term for the vacated office.
20 
Sec. 12. Secretariat — There is hereby created a Secretariat headed by an
21 
Executive Director and two (2) Deputy Directors, and supported by staff, whose
22 
composition shall be determined by the SEDC, to serve as the national, technical and
23 
administrative secretariat of the Council with the member agencies providing
24 
additional support staff when the need arises. The Secretariat shall perform the
25 
following functions:
26 
a. Provide administrative support to the Council, with the assistance of the
27 
National Economic and Development Authority secretariat in the
28 
formulation of the PRESENT development programs and plans;
29 
b. Assist the Council in the implementation of the PRESENT development
30 
program and the annua! and medium-term development plan;
31 
c. Assist the council in the performance of its accreditation and screening
32 
function;
20


1 
d. Assist the Council in monitoring the PRESENT development programs and
2 
the activities of the various concerned government agencies with respect
3 
to SEs;
4 
e. Prepare, collate and integrate all necessary inputs to the Council's yearly
5 
report on the status of SEs in the country;
6 
f. Submit periodic reports to the Council on the progress and accomplishment
7 
of its work programs; and
8 
g. Perform other functions that may be assigned and authorized by the Council.
9 
Sec. 13. Office. — The Council shall have its principal place of business within
10 
the DTTs premises or it may establish an office in Metro Manila. It may also establish
11 
such branches within the Philippines as may be deemed necessary by the President
12 
of the Philippines to carry out the powers and functions of the Council.
13 
Sec. 14. National Center for Social Enterprise Development — There shall be
14 
established a National Center for Social Enterprise Development (NCSED) under the
15 
Council which shall perform the following functions:
16 
a. Provide SEMPs with capability-training and education through the Social
17 
Enterprise Capability Building and Sustainability Program created under
18 
Section 17 of this Act.
19 
b. Develop and enhance a research and development system which shall equip
20 
every SE with innovative and sustainable approaches that ensures
21 
improvement in the access to basic social services by the poor pursuant to
22 
Section 18 of this 2 Act;
23 
c. Manage a Social Enterprise Marketing Assistance Program (SMAP) that will
24 
ensure the generation of the highest possible income for the SEs pursuant
25 
to Section 19 of this Act.
26 
d. Implement capability building projects approved by the Council;
27 
e. Supervise capability- building projects approved by the Council implemented
28 
through reputable Social Enterprise Resource Institutions contracted for the
29 
purpose: and
30 
f. Research on existing policies and programs of other countries for
31 
benchmarking purposes (e.g. support system, ecosystem, programs,
32 
regulations).
21


1 
The NCSED shall be headed by the Executive Director of the Council Secretariat.
2 
It shall maintain a multi-sectoral, multi-disciplinary pool of experts including those
3 
from the academe, practicing professionals, business and industry, youth, women and
4 
other concerned sectors, who shall be screened according to the qualifications set by
5 
the Council.
6 
The NCSED shall coordinate with the University of the Philippines Institute for
7 
Small Scale Industries (UP ISSI), the Technical Education and Skills Development
8 
Authority (TESDA), the Department of Transportation (DOTr), Department of
9 
Information and Communications Technology (DICT), the Philippine Commission on
10 
Women (PCW), civil society organizations, including women's organizations, and other
11 
relevant agencies, state universities and colleges in implementing its programs.
12 
Sec. 15. Personnel. — Subject to the civil service laws, rules and regulations,
13 
the Council is authorized to select, appoint, employ and fix the compensation of the
14 
officers and employees of the Secretariat and the NCSED as shall be necessary to
15 
carry out its functions.
16 
Sec. 16. Role of LGUs in SE Development.— LGUs shall be enjoined to
17 
incorporate viable SE Development Plans in their local development planning and to
18 
collaborate with SEMPs. The Gender and Development (GAD) Fund of LGUs may be
19 
used toward the design and implementation of SE development plans at the local
20 
level. Grants from government agencies, such as the Department of Interior and Local
21 
Government (DILG), for civil society toward local development may also be used to
22 
support social enterprises.
23 
Sec. 17. Social Entrepreneurship Education in Schools. — Toward strategically
24 
developing the nation's human resource capability in social entrepreneurship, the
25 
Department of Education (DepEd) and the Commission on Higher Education (CHED)
26 
shall cause the integration of SE content and inclusion of SE courses in the curricula
27 
at all levels, especially in the secondary and tertiary levels. This shall be part of the
28 
SE Capability and Sustainability Program stated in this Act.
29 
A continuing social enterprise education program for out-of-school youth and
30 
adults shall likewise be developed and undertaken. The social entrepreneurship
31 
education program for primary and secondary education shall include information
32 
regarding:
22


1 
a. Social issues and civic ways of addressing them;
2 
b. The producer as a steward of natural resources;
3 
c. The consumer as a responsible member of society and their responsibility
4 
to develop critical awareness which is the responsibility to be alert and
5 
questioning about environmental and social impacts of the goods and
6 
services they use;
7 
d. Social concern which is the responsibility to be aware of the impact of their
8 
consumption to society, especially to the disadvantaged;
9 
e. Environmental awareness which is the responsibility to understand the
10 
consequences of their use of natural resources, consumption, recognizing
11 
their individual and social responsibility to conserve natural resources for
12 
future generations; and
13 
f. Gender justice, or the full equality and equity between men and women in
14 
all spheres of life, resulting in women jointly, and on an equal basis with
15 
men, defining and shaping the policies, structures, and decisions that affect
16 
their lives and society as a whole.
17 
All higher learning institutions and vocational schools are mandated to include
18 
a subject on social entrepreneurship in their social studies program or In their
19 
business, commerce, or economics courses.
20 
CHAPTER III
21 
DEVELOPMENT OF SOCIAL ENTERPRISES
22 
Sec. 18. SE Capability Building and Sustainability Program; Creation of SE
23 
Development Fund. — There is hereby established a SE Capability Building and
24 
Sustainability Program whose primary objective is to guarantee the viability and
25 
sustainability of SEMPS through activities that advance, in general, both
26 
transformational services and transactional services.
27 
This program shall include training in social entrepreneurship development
28 
institutional strengthening, human resource competency and skills training, business
29 
planning and advisory services, upgrading of accounting and auditing systems,
30 
technical assistance for the installation or improvement of management information
31 
systems, technology intervention, technology incubation/commercialization, market
32 
studies, and product development competitiveness, business matching activities,
23


1 
trade fairs and missions, policy advocacy, gender and development, resiliency, and
2 
other related activities.
3 
The SE Capability Building and Sustainability Program shall likewise include the
4 
establishment of an insurance system for SEs affected by natural calamities in line
5 
with the National Framework Strategy on Climate Change 2010-2022 as provided for
6 
under Republic Act No. 9729, otherwise known as the "Climate Change Act of 2009,"
7 
and Republic Act No. 10121, otherwise known as the "Philippine Disaster Risk
8 
Reduction and Management Act of 2009."
9 
For this purpose, there is hereby created and established an SE Development
10 
Fund (SEDF) in the initial amount of Three Billion Pesos (Php 3,000,000,000.00) to be
11 
administered by the Council chargeable against the General Appropriations Act
12 
following the year of the effectivity of this Act.
13 
The SEDF shall likewise be funded with one percent (1%) of the following;
14 
1) collected taxes pursuant to the implementation of Republic Act No. 10351,
15 
otherwise known as the "SIN Tax Act of 2012;"
16 
2) earnings derived by the Tourism Infrastructure and Enterprise Zone
17 
Authority (TIEZA) from its collections; and
18 
3) equity contributions of participating government financial institutions.
19 
Voluntary contributions, grants, gifts from both local and foreign sources as
20 
may be accepted by the Council shall also form part of the SEDF.
21 
The Social Enterprise Development Fund may also come from programs or
22 
projects implemented by national government agencies funded by development
23 
assistance from bilateral or multilateral development partners.
24 
Additional funding and appropriation shall be provided by the Office of the
25 
President as the needs arise during calamities, pandemics and other extra-ordinary
26 
circumstances, subject to audit by the Commission on Audit.
27 
Social enterprise resource institutions may receive funds for social enterprise
28 
programs. In addition to the SEDF, the 5% allocation for Gender and Development
29 
(GAD) programs of government agencies and local government units as prescribed in
30 
Republic Act. No. 9710, otherwise known as the "Magna Carta of Women Act of 2009,"
31 
may be accessed by social enterprises which are women-led or contribute to women's
32 
economic empowerment. The allocation can help build the capacity of such
24


1 
enterprises. Including further organizing women-led cooperatives and groups to
2 
improve women's economic participation. The SEDF shall be used for the purposes
3 
provided herein. Any undisbursed funds from the preceding year shall form part of the
4 
disbursable portion of the SEDF in the following year. Also to this end, there is hereby
5 
created a Social Enterprise Guarantee Fund Pool (SEGFP) which shall be comprised of
6 
the five percent (5%) of the preceding year budget surplus of the government-owned
7 
and controlled corporations and government financial institutions as contribution to
8 
the SEGFP in accordance with relevant laws, charters and by-laws, in addition to
9 
voluntary contributions, grants and gifts from both local and foreign sources as may
10 
be accepted by the Council.
11 
The SEGFP shall be administered by the Council and shall be used to mitigate
12 
the risks involved in SE sector lending, facilitating the provision of credit therefor. The
13 
fund shall be placed in trust with the Land Bank of the Philippines for the purpose of
14 
providing guarantee cover to participating financial institutions and other parties In
15 
extending financing to SEs: Provided, that the fund may also be used to cover the
16 
performance bond of SEs in government procurement.
17 
The Council, in coordination with the Land Bank of the Philippines, shall draw
18 
up the mechanics and administrative arrangements and issue the implementing
19 
guidelines for the fund pool.
20 
Sec. 19. Cash Incentives for Persons with Disabilities (PWD). — To level the
21 
playing field and recognize the circumstances of start-up SEs primarily employing
22 
PWDs, the SEDF created in Section 18 of this Act shall provide a cash incentive for
23 
every PWD, in accordance with Republic Act No. 7277, otherwise known as the "Magna
24 
Carta for Disabled Persons Act of 1992," and other marginalized sectors as may be
25 
provided by this law, representing at least twenty five percent (25%) of the daily
26 
minimum wage, until such time that the said SE is able to achieve financial
27 
sustainability. Provided that, in order to avail of the Incentive, SEs shall be providing
28 
their PWD employees full minimum wage.
29 
Sec. 20. Social Enterprise Recovery and Rehabilitation Fund. — To prepare for
30 
or respond to climate risks and Impacts, disaster vulnerabilities and hazards,
31 
humanitarian emergencies (including those arising from armed conflict), epidemics,
32 
financial crises or economic shocks, and other such events, a Social Enterprise
25


1 
Resilience Fund is hereby established to build the resilience of social enterprises. This
2 
shall include stimulus grants, climate adaptation initiatives, risk insurance, and other
3 
such facilities and products to improve the ability of SEs to withstand shocks and
4 
stresses. The Fund shall be lodged with the Department of Trade and Industry and
5 
shall be managed by the SEDC.
6 
Sec. 21. Social Enterprise Research and Development System. — The Council,
7 
in coordination with the Department of Science and Technology (DOST), NEDA, DTI,
8 
and other appropriate agencies and research institutions, shall develop and enhance
9 
a research and development system that:
10 
a) Provides studies on opportunities for poverty reduction and SE development
11 
in key economic subsectors and other inputs for the Council to undertake
12 
strategic planning for its PRESENT Program;
13 
b) Equip SEs and support institutions with technologies that are appropriate for
14 
enhancing the participation and benefits of the poor in various economic
15 
subsectors; and,
16 
c) Equip SEs and support institutions with innovative and sustainable
17 
approaches to improve access of the poor to quality basic social services.
18 
This system must be based on gender analysis, or, as defined in this bill, the
19 
systematic analytical process based on sex-disaggregated and gender
20 
information.
21 
Sec. 22. Social Enterprise Marketing Infrastructure Development— The Cou ncil
22 
shall promote the development and expansion of local and foreign markets for the
23 
products and services of SEMPs, guided by the principles of fair trade. Consistent with
24 
this, the Council shall:
25 
a) Establish a SE Marketing Assistance Program (SNAP) that will assist SEMPs
26 
match supply with demand in both domestic and foreign markets, as well as
27 
promote SE products and services through tri-media, trade fairs and trade
28 
missions;
29 
b) Develop, install and sustain a SE market information system (SMIN) with the
30 
assistance of the DTI and DICT which shall be called the SE Marketing
31 
Information Network (SMIN).
26


1 
The SMIN shall be set up from the level of the municipal and provincial LGUs,
2 
the regional and up to the Council level within one (1) year from the approval of this
3 
Act, taking into account existing information networks such as the internet and using
4 
a dedicated website for the purpose, to ensure linkage of the SEs with the government
5 
and its various departments, agencies, bureaus and instrumentalities, the local and
6 
domestic markets, as well as research institutions. The Council shall provide technical
7 
assistance in setting up the SMIN at the local and regional levels.
8 
All government departments, agencies, bureaus, research institutions, as well
9 
as the LGUs shall consolidate and continuously update all relevant information and
10 
data that would be of use to SEs on a periodic basis and make such data available on
11 
a dedicated website on the internet. Data shall be gender-disaggregated as far as
12 
possible.
13 
Compliance with the relevant laws, rules, and regulations concerning data
14 
privacy shall be ensured.
15 
The SMIN shall provide information and marketing services related to products
16 
of SEMPS which shall include the following:
17 
a. Supply data;
18 
b. Demand data;
19 
c. Price and Price trends;
20 
d. Product standards;
21 
e. Directory of, but not limited to SEs, traders, key market centers, processors
22 
and business institutions both at the national and local levels;
23 
f. Information and technology generated from research institutions;
24 
g. International, regional and local market forecasts; and
25 
h. Resource accounting data.
26 
CHAPTER IV
27 
FINANCING AND BENEFITS
28 
Sec. 23. Hybrid Financing. — Social Enterprises shall be supported through
29 
hybrid financing to enable them to provide a combination of transactional and
30 
transformational services to the marginalized sectors, groups or persons they serve.
31 
Given the unique nature of SEs as wealth-creating organizations that pursue their
32 
social mission to improve societal wellbeing in ways that are ecologically and
27


1 
financially sustainable, they need to be supported through hybrid financing that entails
2 
a combination of grants with loans and other financial instruments.
3 
Sec. 24. Special Credit Windows with non-coHateratizedbans. — In addition to
4 
the special credit windows provided for the promotion of microfinance as provided
5 
under Section 16 of Republic Act No. 8425, the Land Bank of the Philippines,
6 
Development Bank of the Philippines, Philippine Postal Bank, and Al Amanah Bank,
7 
and other public or government-owned banks are hereby mandated to set aside at
8 
least ten percent (10%) of their total loan portfolio based on their balance sheet in
9 
the end of the preceding quarter over a period of five (5) years and open a special
10 
credit window for qualified SEs.
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For a period of eight (8) years from the date of the effectivity of this Act, all
12 
other lending institutions as defined under the Central Bank Act or the General Banking
13 
Act, 35 as amended, shall likewise set aside at least ten percent (10%) of their total
14 
loan portfolio that will not require a collateral based on their balance sheet as of the
15 
end of the previous quarter and make the same available for SEs through a special
16 
credit window.
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The BSP, in consultation with the Council, shall formulate the rules for the
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effective implementation of this provision; Provided, That the purchase of government
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notes, securities and other negotiable instruments shall not be deemed compliance
20 
with the foregoing provision.
21 
The Council shall establish a system to monitor all loan applications of SEs in
22 
order to account for the absorptive capacity of the SE sector. The BSP shall require
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lending institutions covered by this Act to furnish the Council on a quarterly basis a
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regular report on their respective compliance with the above provisions on the
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mandatory credit allocations for SEs and shall act immediately on the Council's reports
26 
of non-compliance therewith. The special credit window for SEMPS shall bear interest
27 
lower than the market rate and shall have longer terms of payment and waiver of
28 
applicable fees.
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Sec. 25. Special Credit Window Purposes. — The special credit window
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provided under Section 24 of this Act shall be intended for the following purposes:
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a. Credit line for business development loan or working capital loan to cover
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the operational and management expenses of a start-up or existing
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business or income generating project, including receivable financing or
2 
purchase of additional inventory, soft or intangible investments such as
3 
trade fair participation or acquisition of software or franchise development
4 
packages;
5 
b. Fixed assets financing to cover acquisition of fixed assets like machineries
6 
and equipment, motor vehicle, or acquisition of lot for project site or
7 
construction of a plant and building and the improvement thereof;
8 
c. Value chain financing to cover any of the value chain activities such as
9 
production, processing and marketing;
10 
d. Domestic letter of credit or trust receipt to provide a stand-by credit facility
11 
for the SE borrower for the purchase of product inputs, equipment,
12 
machinery, implements, and snare parts, whereby payment of which is
13 
guaranteed and to be made to the seller by the lending institution, provided
14 
all documents conform with the terms and conditions of the credit; and
15 
e. Revolving Credit Line for re-lending to finance the livelihood project
16 
requirements of end-borrowers.
17 
f. A special credit line (X% of total loan portfolio) for women-led SEs or SEs
18 
that support women (i.e., 50%), particularly those In the agricultural and
19 
informal sectors. Women shall have no barriers to economic participation as
20 
provided for in Republic Act No. 7192, otherwise known as the "Women in
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Development and Nation Building Act of 1992."
22 
Sec. 26. Grant facility. — The SE Development Fund in Section 18 shall provide
23 
grants to qualified social enterprises and resource institutions for the performance and
24 
conduct of their mission toward poverty reduction, sustainable development,
25 
promotion of gender and social justice, environmental conservation, climate action,
26 
and improvement in economic welfare of the poor and marginalized sectors.
27 
There will be three windows under this fund facility, namely: capacity-building
28 
grant; start up enterprise grant; and ecosystem-building grant. The SE Council shall
29 
formulate the guidelines for the management and implementation of grant assistance.
30 
Sec. 27. Tax Credits. — SEDC will develop a system of valuation of social,
31 
economic and ecological contributions of social enterprises and the social impact on
32 
the marginalized sectors they serve, as bases for tax credits from the government.
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Sec. 28. Preferential Rights. — Without prejudice to preferential rights already
2 
available to specific enterprises or organizations under other laws, qualified SEMPs
3 
shall be accorded a preferential right in the procurement process and in the
4 
implementation of procurement contracts by the government in all its branches,
5 
departments, agencies, subdivisions, and instrumentalities, including in the
6 
government-owned and controlled corporations and local government units. Such a
7 
preferential right is anchored not just in economic efficiency but in social values which
8 
provide long-term benefits to society.
9 
As defined in this bill, social value refers to the additional benefit to society of
10 
procuring a good or service, over and above the direct benefit and value of the good
11 
or service to the procuring entity. These social values include, inter alia, poverty
12 
reduction, sustainable development, environmental conservation, climate action,
13 
community development, and gender and social justice.
14 
As such, the determination of government procurement shall factor in social
15 
values. Such a preferential right, however, shall not be prejudicial to the interests of
16 
the government and the public. SEMPs shall be given priority and preference in the
17 
following procurement processes:
18 
a. Direct contracting as provided under Section 31 of Republic Act No. (RA)
19 
12009, otherwise known as the "New Government Procurement Act," may
20 
be resorted to if the contracting party selling the goods and services
21 
required by the procuring entity is a social enterprise as qualified by the
22 
Council.
23 
b. Negotiated procurement as provided under Section 35 of RA 12009 may
24 
be allowed when the goods or services subject of the procurement may
25 
be obtained from a SE within the area of operation of the procuring entity
26 
which is duly qualified by the Council as having the capacity to supply the
27 
required goods and services.
28 
c. Social enterprises established by and for Persons with Disability (PWD)
29 
shall be qualified under the Department of Education's Supply and
30 
Delivery of Furniture for Elementary, Junior and Senior High Schools under
31 
the 10% Allocation for Cooperatives of Persons with Disability.
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d. A procuring entity, when applicable, shall have at least one (1) member
2 
representing SEMPS. Qualified SEMPs under this Act shall be entitled to a
3 
share of at least twenty percent (20%) of the total procurement value of
4 
goods and services supplied to the government, its bureaus, offices and
5 
agencies annually. Provided, That, the DBM shall direct line agencies of
6 
government to include at least 10% of its annual budget for Maintenance
7 
and Other Operating Expenses and Capital Outlay specifically for goods
8 
procured and services contracted from social enterprises producing and
9 
offering such goods and services,
10 
Sec. 29. Insurance for Social Enterprises. — The Insurance Commission shall
11 
issue the necessary rules and regulations and implement measures to ensure that the
12 
insurance industry shall provide insurance products, both life and non-life, for social
13 
enterprises and their stakeholders among the poor. Furthermore, SEMPS shall be
14 
assisted to become eligible and effective insurance providers to their clients and
15 
constituents.
16 
Sec. 30. Support for Social Investors and SE Resource Institutions. — The
17 
government shall develop a program that fosters a community of social investors and
18 
resource institutions supportive of social enterprises.
19 
Sec. 31. Appropriations. — The amount necessary to implement the provisions
20 
of this Act shall be charged against the current year's appropriation of the Office of
21 
the President. Thereafter, such sums as may be necessary for its continued
22 
implementation shall be included in the GAA. The budget requirements for the
23 
implementation of this Act for cooperating agencies shall be incorporated in their
24 
respective budgets.
25 
Sec. 32. Pena! Clause. — The penalty of imprisonment for not less than six
26 
(6) months but not more than two (2) years or a fine of not less than two hundred
27 
fifty thousand pesos (Php250,000) or both imprisonment and fine, at the discretion of
28 
the court, shall be imposed upon any person, who, intentionally or by gross
29 
negligence, fails to provide the benefits, rights and incentives granted to SEs in
30 
violation of this Act or perform any act in violation of its provisions.
31 
If a corporation is found to have violated the provisions of this Act, the officers,
32 
directors, members or trustees shall be held liable. If the violation was committed by
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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 Php500,000.00 or imprisonment for not less than two (2) years 
or both fine and imprisonment at the discretion of the court.
Sec. 33. Non-Compliance with the Mandatory Allocation of Credit Resources. 
— Administrative sanctions including a fine of not less than Rve hundred thousand 
pesos (Php500,000.00) shall be imposed by the Bangko 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.
Sec. 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.
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1 
Sec. 35. Separability Clause. — If any provision or part of this Act is declared
2 
invalid or unconstitutional, the remaining parts or provisions not affected shall remain
3 
in full force and effect.
4 
Sec. 36. Implementing Rules and Regulations. — Within ninety (90) days from
5 
the effectivity of this Act, the Department of Trade and Industry shall, in consultation
6 
and coordination with the concerned government agencies and social enterprise
7 
sector, promulgate the necessary rules and regulations for the effective
8 
implementation of this Act. 20
9 
Sec. 37. Repealing Clause. — For purposes of this Act, Section 11 of RA 8425
10 
and Sections 50, 52 and 53 of RA 9184 which are inconsistent with this Act are hereby
11 
deemed amended. All other laws, executive orders, presidential decrees, rules and
12 
regulation or parts thereof inconsistent with any provisions of this Act are hereby
13 
repealed, amended or modified accordingly.
14 
Sec. 38. Effectivity. —This Act shall take effect fifteen (15) days from its
15 
publication in the Official Gazette or In two (2) newspapers of general circulation.
16
17 
Approved,
33