Article 165Supplement v1, p. 165

COMMERCIAL LAWS SUPPLEMENT

The LGUs shall issue the Certificate of Authority promptly

and free of charge. However, to defray the administrative

costs of registering and monitoring the BMBEs, the LGUs

may charge a fee renewal.

The Certificate of Authority shall be effective for a period

of two (2) years, renewable for a period of two (2) years for

every renewal.

As much as possible, BMBEs shall be subject to minimal

bureaucratic

requirements

and

reasonable

fees

and

charges.

Section 5. Who are Eligible to Register – Any person,

natural or juridical, or cooperative, or association, having

the qualifications as defined in Section 3(a) hereof may

apply for registration as BMBE.

Section 6. Transfer of Ownership - The BMBE shall report

to the city or municipality of any changer in the status of

its ownership structure, and shall surrender the original

copy of the BMBE Certificate of Authority for notation of

the transfer.

INCENTIVES AND BENEFITS

Section 7. Exemption from Taxes and Fees – All BMBEs

shall be exempt from tax for income arising from the

operations of the enterprise.

The LGUs are encouraged either to reduce the amount of

local taxes, fees and charges imposed or to exempt

BMBEs from local taxes, fees and charges.

Section

8.

Exemption

from

the

Coverage

of

the

Minimum Wage Law – The BMBEs shall be exempt from

the coverage of the Minimum Wage Law: Provided, That

all employees covered under this Act shall be entitled to

the same benefits given to any regular employee such as

social security and healthcare benefits.

Section 9. Credit Delivery – upon the approval of this Act,

the land Bank of the Philippines (LBP), the Development

Bank

of

the

Philippines

(DBP),

the

Small

Business

Guarantee and Finance Corporation (SBGFC), and the

People's Credit and Finance Corporation (PCFC) shall set

up a special credit window that will service the financing

needs of BMBEs registered under this Act consistent with

the Banko Sentral ng Pilipinas (BSP) policies; rules and

regulations. The Government Service Insurance System

(GSIS) and Social Security System (SSS) shall likewise set

up a special credit window that will serve the financing

needs of their respective members who wish to establish

a

BMBE.

The

concerned

financial

institutions

(FIs)

encouraged to wholesale the funds to accredited private

financial

institutions

including

community-based

organizations

such

as

credit,

cooperatives,

non-government

organizations

(NGOs)

and

people's

organizations, which will in turn, directly provide credit

support to BMBEs.

All loans from whatever sources granted to BMBEs under

this

Act

shall

be

considered

as

part

of

alternative

compliance to Presidential Decree no, 717,, otherwise

known as the Agri-Agra Law, or to Republic Act. No. 6977,

known

as the Magna Carta for Small and Medium

Enterprises, as amended. For purposes of compliance

with presidential Decree no. 717 and Republic Act No.

6977, as amended, loans granted to BMBEs under this Act

shall be computed at twice the amount of the face value

of the loans.

To minimize the risks in lending to the BMBEs, the SBGFC

and the Quedan and Rural Credit Guarantee Corporation

(QUEDANCOR) under the Department of Agriculture, in

case of agribusiness activities, shall set up a special

guarantee

window

to

provide

the

necessary

credit

guarantee to BMBEs under their respective guarantee

programs.

The LBP, DBP. PCFC, SBGFC, SSS, GSIS, and QUEDANCOR

shall annually report to the appropriate Committee of

Both

Houses

of

Congress

on

the

status

of

the

implementation of this provision.

The BSP shall formulate the rules for the implementation

of this provision and shall likewise establish incentive

programs to encourage and improve credit delivery to

the BMBEs.

Section

10.

Technology

Transfer,

Production

and

Management Training, and marketing Assistance – A

BMBE

Development

Fund

shall

be set up with an

endowment

of

Three

Hundred

Million

pesos

(P300,000,000.00) from the Philippine Amusement and

Gaming Corporation (PAGCOR) and shall be administered

by the SMED Council.

The

Department

of

Trade

and

Industry

(DTI),

the

Department

of

Science and Technology (DOST), the

university of the Philippines Institute for Small Scale

Industries (UP ISSI), Cooperative Development Authority

(CDA),

Technical

Education

and

Skills

Development

Authority

(TESDA),

and

Technology

and

Livelihood

Resource Center (TLRC) may avail of the said Fund for

technology

transfer,

production

and

management

training and marketing assistance to BMBEs.

The DTI, in coordination with the private sector and

non-government organization (NGOs), shall explore the

possibilities of linking or matching-up BMBEs with small,

medium and large enterprises and likewise establish

incentives therefor.

The DTI, in behalf of the DOST, UP ISSI, CDA. TESDA and

TLRC

shall

be

required

to

furnish

the

appropriate

Committees of both Houses of Congress a yearly report

on

the

development

and

accomplishments

of their

projects and programs in relation to technology transfer,

production and management training and marketing

assistance extended to BMBEs.

Section 11. Trade and Investment Promotions – The data

gathered

from

business

registration

shall

be

made

accessible to and shall be utilized by private sector

organizations

and

non-government

organizations

for

purposes of business matching, trade and investment

promotion.

INFORMATION DISSEMINATION

Section 12. Information Dissemination - The Philippine

Information

Agency

(PIA),

in

accordance

with

the

Department of Labor and Employment (DOLE), the DILG

and the DTI, shall ensure the proper and adequate

information dissemination of the contents and benefits of

this Act to the general public especially to its intended

beneficiaries specifically in the barangay level.

PENALTY

Section 13. Penalty - Any person who shall willfully

violates any provision of this Act or who shall in any

manner commit any act to defeat any provisions of this

Act shall, upon conviction, be punished by a fine of not

less than twenty-five Thousand Pesos (P25,000.00) but

not more than Fifty Thousand Pesos (P50,000.00) and

suffer imprisonment of not less than six (6) months but

not more than two (2) years.

In case of non-compliance with the provisions of Section

9

of

this

Act,

the

BSP

shall impose administrative

sanctions

and

other

penalties

on

the

concerned

government financial institutions, including a fine of not

less than Five Hundred Thousand Pesos (P500,000.00)

MISCELLANEOUS PROVISIONS

Section 14. Annual Report – The DILG, DTI, and BSP shall

submit an annual report to the Congress on the status of

the implementation of this Act.

Section 15. Implementing Rules and Regulations – The

Secretary of the Department of Trade and Industry, in

consultation with the Secretaries of the DILG, DOF, and

the BSP Governor shall formulate the necessary ruled and

regulations to implement the provisions of this Act within

© Compiled by RGL

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