Summary of Republic Act No. 6977, As Amended by Republic Act No.

8289
An Act to Promote, Develop and Assist Small and Medium Scale Enterprises Through the
Creation of a Small and Medium Enterprise Development Council, and the Rationalization
of Government Assistance Programs and Agencies Concerned with the Development of
Small and Medium Enterprises, and for Other Purposes.

2017 ASEAN SUMMIT : PROSPERITY FOR ALL

“Driving growth through micro and small entrepreneurs in Trade, Services and Agriculture”
The need to strategically equip MSMEs with the right tools has risen in order to enable
them to engage in the increasing competitiveness of the business environment. The PROSPERITY
FOR ALL SUMMIT aims to pursue genuine and inclusive growth & prosperity for the entire ASEAN
community. 5 Keynote speeches and main sessions, namely:

1. CREATING AN ENABLING ENVIRONMENT IN ACHIEVING PROSPERITY FOR ALL

Digital trade is the key to these challenges to make trade world class. Challenges and surface
efforts to make adjustments and institutionalize these through policy and new initiatives. Great
strides have been made over the years to support micro, small and medium enterprises but there
remain to be many challenges in the path toward competitiveness and doing business across the
region, especially in trade, services and agriculture.

2. WHERE’S THE MARKET? STRENGTHENING THE ONE ASEAN MARKET TO ACCESS GLOBAL
MARKETS
ASEAN Market as an economic powerhouse with continually growing global economic
opportunities brought about by regional integration. The ASEAN Economic Community (AEC)
offers a rich and complex array of goods and services that have been actively exchanged within
the region for decades. Essential part of these progress are transparency, accountability,
progressive, level playing field and open markets. Agriculture must be the center of our market
as Asian countries. Financial and technical support are what SME’s need to gain access in the
market. The market is within each countries. There should be focus of the role of women and
millenials in MSME’s. Utilizing market through bridge the gap between traders and farmers.

3. WHERE’S THE FUNDING? OPENING UP INNOVATIVE AND INCLUSIVE FINANCING OPTIONS

FOR MICRO AND SMALL ENTREPRENEURS
Land Bank financing by lending 20% to farmers through their cooperatives together with
corporate lending. It is a joint venture corporation (JVC) 49% owned by individual farmers or
fishers or micro entrepreneurs and 51% owned by big brother processing company. The JVC will
borrow to Land bank. Shares are distributed pro-rata to their land holdings.

4. HOW DO WE TRANSFORM? ESTABLISHING EFFICIENT BUSINESS PRACTICES THROUGH

DISRUPTIVE TECHNOLOGY AND INNOVATION
“One store concept” this is to have a one stop laboratory program providing different sets of
tests and standards where in there is an in house expert to check the products. Also providing
educators/scientists in a portal to give opinions and insights about the businessmen’s inquiry.

5. CALL TO ACTION: INITIATING ASEAN MENTORSHIP FOR ENTREPRENEURS NETWORK (AMEN)

As ASEAN Business Advisory prepares to launch the ASEAN Mentorship For Entrepreneurs
Network (AMEN), a private-public partnership platform where mentors and world class teaching
modules for micro, small and medium enterprise empowerment can be developed and actively
shared among ASEAN Member States. The significance of mentorship for entrepreneurs in their
bid for a successful, relevant and economically rewarding role in the AEC framework. The support
from private sectors to promote and how to mentor in order to have a common master plan.
PLDT now is giving the ability for the small entrepreneurs to be on board and putting up their
needs through the power of digital world and the internet. The millennial entreprenuers are
easier to mentor than the older generations. So the key is to balance the EQ and the IQ.

Republic Act No. 6977, As Amended by Republic Act No. 8289

Brief History
 RA 6977, the Magna Carta for Small Enterprises, was enacted in January 1991 by
Fidel Ramos. (Pamintuan, 2015)
 However, it was amended by RA 8289 in 1997; one of the important amendments
made is the increase in the value of the total assets required of micro, small, and
medium enterprises.
 And in 2008, the law was further amended by RA 9501 also known as the Magna
Carta for Micro, Small and Medium Enterprises in 2008 which defines the current
national policy to promote, support, strengthen and encourage the growth and
development of MSMEs (Times, 2016).
  Furthermore, RA 9501 made an important amendment in the law and that is Section
9 where it states that Micro, Small and Medium Enterprise Development Council
shall have a separate annual appropriation approved by the Department of Trade
and Industry which shall be provided in the General Appropriations Act to finance
its activities and operational expenses. Furthermore, the Council may also accept
contributions from the private sector.

Rationale and Objectives of the Law

RA 9501 aims to promote, support, and strengthen and encourage the growth and
developments of MSMEs in partnership with the private sector. The Micro, Small, and Medium
Enterprises (MSMEs) play a major role in our country’s economic development for the reason that
it had contributed to the following:
1. Rural development
2. Creation of employment opportunity and more equitable income distribution
3. Better use of indigenous resources and products
4. Earning of foreign exchange resources
5. The entrepreneurial development

MSMEs also provides with continuous supply of ideas, skills, and innovations necessary to
promote competition and the efficient allocation of scarce resources. Furthermore, studies shown
that the MSMEs provide opportunities to those who could not have started business otherwise,
especially to those disadvantages members of society such as the disabled, and elderly. However,
there are some constraints to the development of the MSMEs such as but not limited to (Professor
Jo B. Bitonio, 2012):
1. High cost of doing business
2. Lack access to finance and market information
3. Limited resources
4. Weak technical capabilities
5. Low productivity which prevent them to maximize their real potential.

Small and Medium Enterprise

Any business activity or enterprise engaged in industry, agribusiness and/or services, whether
single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those
arising from loans but exclusive of the land on which the particular business entry’s office, plant
and equipment are situated, must have value falling under the following categories:
Asset Size
Micro less than P1,500,001
Small P1,500,001 P15,000,000
Medium P15,000,001 P60,000,000

Employment Size
SMEs may also be defined by the number of employees.
Micro- regular employs less than 10 workers
Small – 10-99 workers
Medium – 100-199 workers

Note: The Council can in its own initiative or upon recommendation of sectoral organization(s)
taking into account inflation and other economic indicators. The Council may use as variables the
number of employees, equity capital and asset size.

Who are eligible for Government Assistance?

1. Duly registered business with the appropriate agencies
Note: In case of Micro enterprises, registration with the office of the municipal or city treasurer
shall be deemed sufficient compliance with this requirement.
2. One hundred percent (100%) owned and capitalized by Filipino citizens if single proprietorship
or partnership.
For corporations, at least sixty 60% of its capital or outstanding stocks must be owned by Filipino
citizens.
3. Business activity within the major sectors of the economy
 Industry
 Services including the practice of one’s profession
 Operation of tourism-related establishments
 Agri-business involving the manufacturing, processing, and/or production of agricultural
produce, excluding farm level agriculture/crop production
 Must not be a branch, subsidiary or division of a large scale enterprise nor may its policies
be determined by a large scale enterprise or by persons who are not owners or employees
of the enterprise. (It shall not preclude a small and medium enterprise from accepting
 subcontracts from large enterprise or firms joining in cooperative activities with other small
and medium enterprises.)
Registered small enterprises shall be entitled to a share of at least ten percent (10%) of total
procurement value of goods and services supplied to the Government, its bureaus, offices and
agencies annually: Provided, that prices and quality of goods offered by the registered small
enterprises are competitive.”

The State shall be guided by the following principles:

1. Minimal set of rules and simplification of procedures and requirements.
2. The private sector throughout the country shall be encouraged to assist in the implementation
of this act by participating in government programs for small and medium enterprises strictly in
accordance with the law.
3. Government efforts shall be coordinated to achieve coherence in objectives.
4. The State shall accelerate the decentralization process by establishing regional and provincial
offices in order to enhance and attain greater efficiency in this provision of services to the
countryside and the implementation of this Act, in coordination with local government units.

Creation of a Small and Medium Enterprise Development (SMED) Council (Sec. 4, R. A. No.
8289)
(Sec. 6 of Republic Act No. 6977 as amended)

- Created to effectively spur the growth and development of small and medium enterprises.
- Shall be attached to the DTI.
- Duly constituted within 60 days after the approval of this Act.
- Primary agency responsible for the promotion, growth and development by way of
facilitating and closely coordinating national efforts to promote their viability and growth,
including assisting relevant agencies in the tapping of local and foreign funds for
development, as well as promoting the use of existing programs, as well as seeking ways
to maximize the use of our labor resources.

Composition (Sec. 5, R. A. No. 8289)

(Sec. 7 of Republic Act No. 6977 as amended)

The Council shall be headed by the Secretary of Trade and Industry as Chairman, and may elect
from among themselves a Vice-Chairman to preside over the Council meetings in the absence of
the Chairman.

The members shall be the following:

 (a) Director General of the National Economic and Development Authority;

(b) Secretary of Agriculture;

(c) Secretary of Labor and Employment;

(d) Secretary of Environment and Natural Resources;

(e) Secretary of Science and Technology;

(f) Secretary of Tourism;

(g) The Chairman of the Monetary Board;

(h) Chairman of Small Business Guarantee and Finance Corporation;

(i) Chairman of the small and medium enterprises promotion body;

(j) Three (3) representatives from the private sector, Filipino citizens, representing Luzon,
Visayas and Mindanao, and one representative from the small and medium enterprises
sector appointed by the President; and

(k) A representative from the private banking sector to serve alternately among the
Chamber of Thrift Bank; the Rural Bankers’ Association of the Philippines (RBAP); and the
Bankers’ Association of the Philippines (BAP).

Cabinet-rank ex officio members of the Council shall designate an assistant secretary and the
chairman of the Monetary Board or his representative as their permanent representative in case
they fail to attend meetings of the Council.

The private sector members of the Council shall initially receive per diem of P1,000 per meeting
for a maximum of 24 meetings per year, subject to adjustment by the Council which shall take
effect upon approval of the President.

The DTI shall allocate P5,000,000 out of its savings for the initial operating expenses of the
Council, after which the Council’s budget shall be included in its annual appropriation.

The Council may, from time to time, call upon the participation of any government agency or
association of local government officials in its discussions especially when such agency is directly
or indirectly concerned with and/or affecting the growth and development of small and medium
enterprises in any particular area or manner.

The Council may create an Executive Committee of 5 members elected from among themselves
or their designated permanent representatives, with at least two (2) members representing the
private sector, and granted with specific authority to act for and on behalf of the Council during
intervals of council meetings.

Bureau of Micro, Small and Medium Enterprises Development

The Bureau of Small and Medium Business Development (BSMBD) referred to as the Bureau of
Micro, Small and Medium Enterprise Development (BMSMED) is designated to act as the Council
Secretariat (Sec 8.)
Duties and Functions of Council Secretariat
The Council Secretariat shall exercise the following duties and functions:
1) Prepare, in coordination with local government units and/ or associations of local government
officials, and recommend annual as well as medium-term small and medium enterprise
development plans for approval of the Council;
2) Coordinate the preparation of position papers and background materials for discussion or
approval of the Council meetings;
3) Assist the Council in coordinating and monitoring small and medium enterprise policies and
programs and activities of all government agencies with respect to small and medium enterprises;
4) Prepare, collate and integrate all inputs to the Council’s yearly report on the status of small and
medium enterprises in the country;
5) Submit periodic reports to the Council on the progress and accomplishment of its work
programs; and
6) Perform ad hoc functions as authorized by the Council. (Sec. 8)

Source of Funds of the Council Secretariat

To finance its activities and operational expenses, the Council shall have a separate annual
appropriation approved by the Department of Trade and Industry (DTI) which shall be provided
in the General Appropriations Act starting in the fiscal year immediately following the approval
of this Act. The Council may also accept contributions from the private sector. (Sec. 9)
(RA 9501 through Sec. 11 inserted after Section 9 of RA 6977 as amended by RA 8289, a new
section and numbered it as Section 9)
Rationalization of Existing MSME Programs and Agencies
The MSMED Council shall conduct continuing review of government programs for MSMEs and
submit to Congress and the President a report thereon together with its policy recommendations
(Sec. 10)
(RA 9501 through Sec. 12 amended Section 10 of RA 6977 as amended by RA 8289)
Creation of Small Business Guarantee and Finance Corporation
A body corporate to be known as the Small Business Guarantee and Finance Corporation,
hereinafter referred to as the Small Business Corporation (SB Corporation), which shall be charged
with the primary responsibility of implementing comprehensive policies and programs to assist
MSMEs in all areas, including but not limited to finance and information services, training and
marketing. (Sec. 11)
(RA 9501 through Sec. 13 amended Section 11 of RA 6977, as amended by RA 8289)

Composition of the Board of Directors and its Term of Office

The Board of Directors is composed of eleven (11) members who shall include following:
a) The Secretary of Trade and Industry;
b) The Secretary of Finance;
c) A private sector representative to be appointed by the President upon the
recommendation of the MSMED Council;
d) Seven (7) representatives of the SB Corporation common stock shareholders who shall
be elected based on proportional distribution, in accordance with Section 24 of the
Corporation Code; and
e) The president of the SB Corporation as ex-officio member and to serve as vice chairman
of the Board.
The President shall appoint the chairman of the Board from among its members.
All members of the Board so appointed, except for the ex-officio members, shall serve for
a term of three (3) years without reappointment. The person so appointed to replace a
member who has resigned, died, or been removed for cause shall serve only for the
unexpired portion of the term. (Sec.11)
Powers of the Board of Directors
The SB Corporation corporate powers shall be vested on a Board of Directors. The following are
their specific powers and authorities:
a) Formulate policies necessary to carry out effectively the provisions of this charter and
to prescribe, amend and repeal by-laws, rules and regulations for the effective operations
of the small business corporation;
b) Establish such branches, agencies and subsidiaries as may be deemed necessary and
convenient;
c) Compromise or release, in whole or in part, any claim or liability whatsoever for or
against the SB Corporation, including interest, penalties, fees and/or other charges in
accordance to its own by laws and Bangko Sentral ng Pilipinas rules;
d) Fix the features of non-voting preferred shares which shall be printed on the stock
certificates evidencing the same;
e) Exercise all such other powers as may be necessary or incidental to carry out the SB
Corporation’s purposes; and
f) Notwithstanding the provisions of Republic Act No. 6758 and Compensation Circular
No. 10, Series of 1989 issued by the Department of Budget and Management, the Board
shall have the authority to provide for the organizational structure and staffing pattern of
SB Corporation and to extend to the employees and personnel thereof salaries, allowances
and fringe benefits similar to those extended to and currently enjoyed by employees and
personnel of other government financial institutions.(Sec. 11-A)
(RA 9501 through Sec. 15 inserted a new sub-section after Section 11 of RA 6977, as amended by
RA 8289)

Corporate Structure and Powers

. The SB Corporation shall:
a) be administratively attached to the Department of Trade and Industry and shall be under
the policy and program supervision of the MSMED Council;
b) have its principal offices in Metro Manila and whenever necessary, establish branch
office in the provinces; and
c) exercise all the general powers expressly conferred by law upon corporations under the
Corporation Code, including those powers that are incidental or necessary to the attainment
of the objective of this Act.
 For this purpose, the SB Corporation subject to compliance with the rules and regulations
to be issued by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange
Commission shall have the following functions and duties:
a) Source and adopt development initiatives for globally competitive MSMEs in
finance and business technologies;
b) To extend all forms of financial assistance to eligible MSMEs. SB Corporation
may also engage in wholesale lending. The SB Corporation shall be given two (2)
years from the effectivity of this Act to comply with this requirement;
c) Guarantee loans obtained by qualified MSMEs under such terms and conditions
adopted by the SB Corporation Board of Directors;
d) Hold, purchase, lease or otherwise acquire and own real and personal property,
introduce necessary improvements thereon and to sell, mortgage, encumber or
otherwise dispose of the same as may be necessary in the normal course of business;
e) Formulate means and methods of accepting alternative collaterals and
implementing alternative loan evaluation models;
f) Apply for, receive and accept grants and donations from sources within and
outside the country; and
g) Hold, own, purchase, acquire, sell, mortgage, dispose or otherwise invest or re-
invest in stocks, bonds, treasury bills, debentures, securities and similar forms of
indebtedness of the government, its agencies and instrumentalities or any
government financial institution. (Sec. 11-B)
(RA 9501 through Sec. 14 inserted a new sub-section after Section 11 of RA 6977, as amended
by RA 8289)

Capitalization and Funding of the SB Corporation

Authorized Capital Stock

The SB Corporation shall have an authorized capital stock of Ten billion pesos
(P10,000,000,000.00).
Authorized capital stock of the small business corporation shall be divided into 80,000,000
common shares and 20,000,000 preferred shares with a par value of One hundred pesos (P100.00)
per share: Provided, That the common shares which have been issued, including those issued
against the assets of the KKK Guaranty Fund consolidated under the small business corporation
by virtue of Executive Order No. 233, Series of 2000 and Executive Order No. 19, Series of 2001
and including those already subscribed, shall form part of the capitalization of the corporation:
Provided, further, That holders of preferred shares issued under Republic Act No. 6977, as
amended, shall have the option to convert the same into common shares. Additional equity funding
shall come from trust placements of excess and unused funds of existing government agencies,
bilateral and multilateral official development assistance funds, subscriptions from government
owned or controlled corporations, and investments of private financial institutions and
corporations: Provided, finally, That any investment from the private sector shall only be in the
form of preferred shares.

Capital Build-Up
To allow for capital build-up, SB Corporation shall be given a five (5) year grace period on
dividend commitments beginning on the date of effectivity of the amendment. Thereafter, it may
only declare as dividend not more than thirty percent (30%) of its net income and the rest withheld
as retained earnings.

Initial Capital
The initial capital of One billion pesos (P1,000,000,000.00) shall be established from a pool of
funds to be contributed in the form of equity investments in common stock by the Land Bank of
the Philippines (LBP), the Development Bank of the Philippines (DBP), in the amount of Two
hundred million pesos (P200,000,000.00) each. The Social Security System (SSS) and the
Government Service Insurance System (GSIS) shall also set aside Two hundred million pesos
(P200,000,000.00) each for the SB Corporation.
(RA 9501 through Sec. 16 amended Section 12 of RA 6977, as amended by RA 8289)

Supervision over the SB Corporation

The SB Corporation shall be subject to the supervision and examination of the Bangko Sentral ng
Pilipinas taking into consideration its developmental objectives. (Sec. 13)

Venture Capital and Micro Finance Trust Fund

The SB Corporation may set aside an amount of money to encourage the setting up of a venture
capital and micro finance trust fund for the purpose of promoting business opportunities available
to MSME sector.

Venture Capital Fund shall be used mainly for venture capital finance especially in technology
oriented industries. (Sec. 14)
Micro finance trust fund shall be used to provide collateral-free fixed and working capital loans
to micro and small enterprises run by those emerging out of poverty. (Sec. 14)
(RA 9501 through Sec. 17 inserted new Sections 13 and 14 after Section 12 of RA 6977, as
amended by RA 8289)

Designation of the bureau of SME development as a council secretariat and creation of small
business guarantee and finance corporation.

MANDATORY ALLOCATION OF CREDIT RESOURCES TO SMALL

ENTERPRISES
RA 6977 RA 8289 amending RA 6977 RA 9501 amending RA 6977
January 24, 1991 September 30, 1997 as amended
May 23, 2008

Setting aside of a portion of total loan portfolio of public and private lending institutions
for MSMEs – evolution of the periods and rates of mandated portion to be set aside for
MSMEs. In the latest amendment, there was a definition of Compliance to guide the
lending institutions of their deliverables in relation to this mandatory requirement of the
law.

Sec. 13. Mandatory SEC. 13. Mandatory SEC. 18. Section 13 of the
Allocation of Credit Allocation of Credit Resource same Act, as amended, is
Resources to Small to Small and Medium hereby renumbered as Section
Enterprises. — All lending Enterprises. - For the period 15, and further amended to
institutions as defined under of ten (10) years from the read as follows:
Central Bank rules, whether date of the effectivity of this
public or private, shall, set Act, all lending institutions "SEC. 15. Mandatory
aside a portion of their total as defined under Bangko Allocation of Credit
loan portfolio based on their Sentral ng Pilipinas rules, Resources to Micro Small and
balance sheet as of the end of whether public of private, Medium Enterprises. - For the
the previous quarter, and shall set aside at least six period of ten (10) years from
make it available for small (6%) and at least two the date of the effectivity of
enterprise credit as herein percent (2%) for small and this amendatory Act, all
contemplated. The portion medium enterprises, lending institutions as defined
mandated to be so set aside respectively, of their total under Bangko Sentral ng
shall at least be, five per cent loan portfolio based on their Pilipinas rules, whether public
(5%) by the end of the year of balance sheet as of the end of or private, shall set aside at
the effectivity of this Act, ten the previous quarter, and least eight percent (8%) for
percent (10%) by the end of make it available for small micro and small enterprises of
the second year through the and medium enterprises their total loan portfolio based
end of the fifth year, and five on their balance sheet as of the
percent (5%) by the end of credit as herein end of the previous quarter,
sixth year and may come contemplated. and make it available for
down to zero by the end of the MSME credit as herein
seventh year. contemplated.

"Compliance of this provision

shall be:

"a) actual extension of loans to

eligible MSMEs; or

"b) actual subscription of

preferred shares of shares of
stock of the SB Corporation;
or

"c) wholesale lending to

Participating Financial
Institutions (PFIS) for on-
lending to MSMEs; or

"d) purchase/discount of
MSMEs receivables; or

"e) loans granted to export,

import, and domestic traders
subject to compliance with
Section 3 of this Act; or

"f) subscribed/purchase of
liability instruments as may be
offered by the SB
Corporation.

Formulation of Rules on Implementation: Establishment of a BSP incentive program to

encourage lending to MSMEs

The Central Bank in "The Bangko Sentral ng "The Bangko Sentral ng

consultation with the Council, Pilipinas, in consultation with Pilipinas shall formulate rules
shall formulate rules for the the Council, shall formulate for the effective
effective implementation of rules for the effective implementation of this
this provision: Provided, That implementation of this provision: Provided, That the
the purchase of government provision: Provided, That the purchase of government notes,
notes, securities, and other purchase of government securities and other negotiable
negotiable instruments, with notes, securities and other instruments shall not be
the exception of such negotiable instruments, with deemed compliance with the
instruments as may be offered the exemptions of such foregoing provisions:
by the SBGFC, shall not be instruments as may be offered Provided, further, That the
deemed compliance with the by the SBGFC which do not Bangko Sentral ng Pilipinas
foregoing provision. pay market rates, shall not be shall establish an incentive
deemed compliance with the program to encourage lending
foregoing provision: to micro, small and medium
Provided, further, That the industries beyond the
Bangko Sentral ng Pilipinas mandatory credit allocation to
shall establish an incentive said enterprises, such as
program to encourage lending possible reduction in bank's
to small and medium reserve requirement.
industries beyond mandatory
credit allocation to said
enterprises, such as possible
reduction in bank's reserve
requirement.

Monitoring of Loan Applications: Renaming of the SMED Council to MSMED Council –

the primary body responsible to lay down appropriate systems for monitoring

The SMED Council shall set "The SMED Council shall set "The MSMED Council shall
up the appropriate systems to up the appropriate systems to set up the appropriate systems
monitor all loan applications monitor all loan applications to monitor all loan
of small enterprises in order to of small and medium applications of MSMSEs in
account for the absorptive enterprises in order to account order to account for the
capacity of the small for the absorptive capacity of absorptive capacity of the
enterprise sector. the small and medium MSME sector.
enterprises sector.

Reporting Arrangements: From semestral reports to quarterly comprehensive reports

The Central Bank shall furnish "The Bangko Sentral ng "The Bangko Sentral ng
to the Small and Medium Pilipinas shall require lending Pilipinas shall furnish to the
Development Council on a institutions covered by this MSMED Council on a
semestral basis regular reports Act to furnish to the Small and quarterly basis comprehensive
on the lending institutions Medium Enterprise reports on the banks'
compliance with the above Development Council on a compliance, noncompliance
provisions on the mandatory quarterly basis regular reports and penalties of the above
credit allocation for small on their compliance with the provisions on the mandatory
enterprises. above provisions on the credit allocation for MSMEs.
mandatory credit allocations
for small and medium
enterprises and expeditiously
 act on the Council's reports of
non-compliance therewith."

New Provision on Lending institutions not qualified to acquire or hold lands of the public
domain in the Philippines shall be permitted to bid and take part in sales of mortgaged
real property

"Lending institutions which

are not qualified to acquire or
hold lands of the public
domain in the Philippines
shall be permitted to bid and
take part in sales of mortgaged
real property in case of
judicial or extra-judicial
foreclosure, as well as avail of
receivership, enforcement and
other proceedings, solely upon
default of a borrower, and for
a period not exceeding five (5)
years from actual possession:
Provided, That in no event
shall title to the property be
transferred to such lending
institution. If the lending
institution is the winning
bidder, it may, during said five
(5) year period, transfer its
rights to a qualified Philippine
national, without prejudice to
a borrower's right under
applicable laws."

New provision on the creation of: (1) Micro, Small, and Medium Enterprise Week; (2)
Presidential Awards for Outstanding MSME and (3) Congressional Oversight Committee
on Micro, Small and Medium Enterprise Development (COC-MSMED)

SEC. 19. New sections to be

numbered as Section 16, 17
and 18 are hereby inserted
after Section 13 of the same
Act, as amended, to read as
follows:

"SEC. 16. Micro, Small, and

Medium Enterprise Week. - In
order to institute continuing
awareness of the primacy of
small business in nation-
building and in people
empowerment, and to
celebrate and espouse the firm
commitment of the State in the
promotion, growth and
development of small
business, the second week of
July of every year shall be
declared as the "Micro, Small,
and Medium Enterprise
Development Week". the
MSMED Council, the
Department of Trade and
Industry, and the SB
Corporation shall be jointly
responsible in organizing
activities for the event."

"SEC. 17. Presidential

Awards for Outstanding
MSME. - Presidential awards
for outstanding MSMEs and
good MSME practices,
consisting of rewards in cash
or in kind shall be granted to
one hundred percent (1005)
Filipino-owned companies
and development partners
during the MSME
development week."

"SEC. 18. Congressional

Oversight Committee. - To
monitor and oversee the
implementation of this Act,
there shall be a Congressional
Oversight Committee on
Micro, Small and Medium
Enterprise Development
(COC-MSMED) composed of
the chairpersons of the Senate
Committee on Economic
Affairs and the House
 Committee on Small Business
and Entrepreneurship
Development as chairperson
and co-chairperson,
respectively; five (5) members
of each of the Senate and
House of Representatives to
include the chairpersons of the
Senate committees on Trade
and Commerce; and Banks,
Financial Institutions and
Currencies; and the
chairpersons of the House of
committees on Trade and
Industry, Banks and Financial
Intermediaries, and
Appropriations: Provided,
That two (2) of the five
Senators and two (2) of the
five House members shall be
nominated by the respective
minority leaders of the Senate
and the House of
Representatives.

"The COC-MSMED shall set

the guidelines and overall
framework for the monitoring
of the implementation of this
Act and shall adopt its internal
rules of procedure. The
Secretariat of the COC-
MSMED shall be drawn from
the existing personnel of the
Senate and House of
Representatives committees
compromising the COC-
MSMED."

Penal clause: the previous penalty came with imprisonment and fine, then imprisonment
was deleted, then the fine has been purposely allocated to development of the MSME
sector.

Sec. 14. Penal Clause. — The Sec. 10. Sec. 14 of Republic SEC. 20. Section 14 of the
Central Bank shall impose Act No, 6977 is hereby same Act, as amended, on
administrative sanctions and amended to read follows: Penal Clause is hereby
other penalties on the lending renumbered as Section 19, and
institution for non-compliance "SEC. 14. Penalty Clause. - further amended, to read as
with provisions of Act. In The Bangko Sentral ng follows:
addition, the president,
Pilipinas shall impose
members of boards of administrative sanctions and "x x x"
directors, and other officers of
other penalties on the lending
the erring lending institutions
institutions for non- "Penalties on noncompliance
shall be individually liable for
compliance with provision of shall be directed to the
imprisonment of not less thanthis Act including a fine of not development of the MSME
six (6) months and a fine of less than Five hundred sector. Ninety percent (90%)
not less than Five hundred thousand pesos (P500,000)." of the penalties collected
thousand (P500,000) each. should go to the MSMED
Council Fund, while the
remaining ten percent (10%)
should be given to the BSP to
cover for administrative
expenses."
New Section: The IRR has been assigned to the Bureau of Micro, Small and Medium Business
Development of the Department of Trade and Industry
SEC. 21. A new section is
hereby inserted after Section
14 of the same Act, to read as
follows:

"SEC. 20. Implementing

Rules and Regulations. - The
Department of Trade and
Industry, through the Bureau
of Micro, Small and Medium
Business Development in
consultation with other
concerned government
agencies, nongovernment
organizations and private
sector involved in the
promotion of MSMEs, shall
formulate the implementing
Rules and Regulations (IRR)
necessary to implement the
provisions of this Act within
ninety (90) days from the
approval of this Act. The IRR
issued pursuant to this Section
shall take effect thirty (30)
days after publication in a
 national newspaper of general
circulation."

Reference
 Pamintuan, A. M. (2015, November 25). Entrepreneurs. The Philippine Star.
 Professor Jo B. Bitonio, D. (2012, November 11). Slide Share. Retrieved September 15,
2017, from Slide Share: https://www.slideshare.net/jobitonio/philippines-micro-small-
medium-enterprises-msmes
 Times, T. M. (2016). EDC wants extension of Magna Carta for MSMEs. The Manila
Times.
 https://www.rappler.com/world/regions/asia-pacific/168192-live-asean-prosperity-for-all-
summit