Article 139Labor and Agrarian Laws and Social Legislation, p. 139

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

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.

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 this

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. (as amended by

RA No 9501)

Section 13. The SB Corporation shall be subject to the

supervision and examination of the Bangko Sentral ng

Pilipinas

taking

into

consideration

its

development

objectives. (as created by RA No 9501)

Section 14. Venture Capitial 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 of

MSME sector. The Venture Capital Fund shall be used

mainly

for

venture

capital

finance

especially

in

technology-oriented industries. The 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. (as created by RA No

9501)

Section

15.

Mandatory

Allocation

of

Credit

Resource to Micro, Small and Medium Enterprises . —

For the period of ten (10) years from the date of the

effectivity of this amendatory Act, all lending institutions

as defined under Bangko Sentral ng Pilipinas rules,

whether public or private, shall set aside at least eight

percent (8%) for micro and small enterprises of their total

loan portfolio based on their balance sheet as of the end

of the previous quarter, and make it available for MSME

credit as herein 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.

The Bangko Sentral ng Pilipinas shall formulate rules

for

the

effective

implementation

of

this

provision:

Provided,

That

the

purchase

of

government

notes,

securities and other negotiable instruments shall not be

deemed

compliance

with

the

foregoing

provisions:

Provided, further, That the Bangko Sentral ng Pilipinas

shall

establish

an

incentive

program

to

encourage

lending to micro, small and medium industries beyond

the mandatory credit allocation to said enterprises, such

as possible reduction in bank's reserve requirement.

The MSMED Council shall set up the appropriate

systems to monitor all loan applications of MSMSEs in

order to account for the absorptive capacity of the MSME

sector.

The Bangko Sentral ng Pilipinas shall furnish to the

MSMED Council on a quarterly basis comprehensive

reports on the banks' compliance, noncompliance and

penalties of the above provisions on the mandatory credit

allocation for MSMEs.

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 r

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.

(13a)

(as

amended by RA No 8289, 9501)

Section 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. (as created by RA No 9501)

Section 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. (as created by RA

No 9501)

Section 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. (as created by RA No 9501)

Section 19. Penal Clause . — The Bangko Sentral ng

Pilipinas shall impose administrative sanctions and other

penalties on the lending institutions for non-compliance

with provision of this Act including a fine of not less than

Five hundred thousand pesos (P500,000).

Penalties on non-compliance shall be directed to the

development of the MSME sector. Ninety percent (90%) of

the penalties collected should go to the MSMED Council

Fund, while the remaining ten percent (10%) should be

given to the BSP to cover for administrative expenses.

(14a) (as amended by RA No 8289, 9501)

Section 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,

non-government

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. (as created by RA No 9501)

© Compiled By RGL

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