Article 138Labor and Agrarian Laws and Social Legislation, p. 138

LABOR LAWS AND SOCIAL LEGISLATION SPECIAL LAWS AND IMPLEMENTING RULES AND REGULATIONS

The Council may also accept contributions from the

private sector. (as created by RA No 9501)

CHAPTER III

Section

10.

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 recommendation.

(as amended by RA No 8289, 9501)

Section 11. Creation of Small Business Guarantee

and Finance Corporation . — There is hereby created 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.

(as amended by RA No 8289, 9501)

Section 11-A. Composition of the Board of Directors

and its Powers . - The SB Corporation corporate powers

shall be vested on a Board of Directors composed of

eleven (11) members which shall include the 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)

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.

The Board of Directors shall have, among others, the

following 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

charges in accordance to its own by-laws and Bangko

Sentral ng Pilipinas rules;

d) Fix the features on 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 personal

thereof salaries, allowances and fringe benefits similar to

those extended to and currently enjoyed by employees

and personal of other financial institutions. (as created

by RA No 9501)

Section 11-B 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 reinvest in stocks, bonds,

treasury bills, debentures, securities and similar forms of

indebtedness

of

the

government,

its

agencies

and

instrumentalities or any government financial institution.

(as created by RA No 9501)

Section 12. Capitalization and Funding of the SB

Corporation .

—

The

SB

Corporation

shall

have

an

authorized

capital

stock

of

Ten

billion

pesos

(P10,000,000,000.00). The initial capital of One billion

pesos (10,000,000,000.00) shall be established from a

pool of funds to be contributed in the form of equity

investment 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.

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

common shares, which have been issued, including those

issued

against

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 shall come from trust

placements of excess and unused funds of existing

government agencies, bilateral and multilateral official

development

assistance

funds,

subscriptions

from

© Compiled By RGL

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