Senate OKs bill helping SMEs get funding
MANILA, Philippines – A newly passed Senate bill seeks to help ensure the growth of the sector that accounts for 9 out of 10 businesses in the Philippines: micro, small, and medium enterprises or MSMEs.
The Senate passed on third and final reading the Go Negosyo (Business) Act of 2013, which aims to help MSMEs get access to funding, incentives, and an easier way of doing business.
Senate trade committee chairman Benigno Aquino IV sponsored the bill as part of his advocacy of helping MSMEs. It is also among the priority measures of the Senate aimed at achieving the Aquino administration’s promise of “inclusive growth.”
Under the bill, the Department of Trade and Industry (DTI) will supervise Negosyo Centers or one-stop shops in cities and municipalities to help entrepreneurs register and manage businesses, and gain access to sources of financing.
The centers will also provide training, courses and development programs, advice on business conceptualization and feasibility, management, human resources, marketing, and other services.
Aquino and Senate President Franklin Drilon hailed the passage of the bill, saying the sector comprises 99% of all businesses, and provide at least 66% of all jobs.
“For every sari-sari store, bakery, or vulcanizing shop that opens and grows, for example, they will need employees, suppliers, and partners that will also get the chance to earn. There will be different livelihoods for many Filipinos,” Aquino said in a statement.
Senate President Pro-Tempore Ralph Recto, a co-author of the bill, cited the benefits of the bill for MSMEs:
- All micro-enterprises shall be exempted from paying income tax with respect to income received from the operations of the enterprises.
- All micro-enterprises shall be exempted from the coverage of the minimum wage law, provided that their employees will be covered by social security, Pag-ibig (housing), and health care benefits.
- Small and medium enterprises that will hire more employees after its registration under the law will be allowed a deduction of P40,000 from its gross income for each employee hired in a taxable year, provided that the minimum allowable deduction from the gross income shall not exceed P80,000. Another condition for the tax exemption is that entrepreneurs must employ the worker for at least a year. The incentive can be availed of for 5 years after the law takes effect.
- MSMEs will be exempted from the value added tax (VAT) and other percentage tax as long as their gross annual sales will not exceed P3 million.
Recto also said the law encourages local government units to lower the amount of taxes, fees, and charges imposed on MSMEs or exempt them from payment.
Senators said the bill will create jobs after a September to December 2013 Social Weather Stations (SWS) survey found that 12.1 million or 27.5% of Filipinos are unemployed.
“For us to be able to create more jobs, we need to help micro enterprises grow and enter the formal economy. Our goal should be to help the micro 'graduate' into small, and the small graduate to medium, so that they grow and generate revenue and jobs for our communities,” Aquino said.
Other priority bills
Other than the Go Negosyo bill, the Senate will work on 36 priority measures that Senate Majority Leader Alan Peter Cayetano identified on Monday.
The legislative agenda was discussed in meetings of Senate leaders with Malacañang, the business community, and the House of Representatives.
Quoting Drilon, the Majority Leader said charter change is not included in the Senate list because the chamber has yet to reach a consensus on the issue, and will wait for the House to finish deliberations.
Cayetano said the following is the initial list of priority measures:
Anti-Corruption and Good Governance
- Freedom of Information bill
- Whistleblowers’ bill
- Witness Protection Act
- Amendments to the Sandiganbayan (anti-graft court) charter
Ways and Means
Finance and Investments
- Fiscal incentives rationalization
- Build-operate-transfer law amendments
- Bangko Sentral ng Pilipinas (Central Bank) charter amendment
- Customs Modernization and Tariff Act
- Regulation of water utilities
- HIV and AIDS prevention, treatment, care and support
- Picture-based health warning for cigarette manufacturers
- National student loan program
- Open high school system for out of school youth
- Ladderized education program
- Open learning through distance education in post-secondary and tertiary levels
- Cabotage law amendments
- Promotion of MSE development institutions and consumer protection
- Land use policy
- Land administration reform
- Acquisition of right of way of government infrastructure projects
- Rationalization of mining revenues
- Emergency management response agency
- National Food Authority reforms
- Department of Information and Communication Technology bill
- Philippine Ports Authority and Maritime Industry Authority charter amendments
- Defining forest boundaries
- Electric Power Industry Reform Act amendments
- Energy sufficiency and conservation
- Children in situations of armed conflict
- Internal displacement act
- Magna Carta for the Poor
- Bangsamoro Basic Law
- Bill strengthening Anti-illegal Drugs Law
- Barangay Officials Welfare bill
- Sangguniang Kabataan Reform