THE House of Representatives has approved on third and final reading a measure which seeks to further promote, strengthen and encourage the growth and development of micro, small and medium enterprises (MSMEs) in the country.
Getting majority votes with no negative vote, House Bill 8714 aims to strengthen and enhance the financing programs for MSMEs, amending the Republic Act No. 6977 or the “Magna Carta For Micro, Small and Medium Enterprises.”
Two principal authors, Cagayan de Oro Rep. Maximo Rodriguez Jr. and 1PACMAN Rep. Michael Romero have expressed their elation over the passage of the bill in the House and at the same time urge Senate to also approve the measure.
According to Rodriguez, there is a need to strengthen the Magna Carta for MSMEs since this provides 62.8 percent of total job opportunities by all types of business establishment.
“Of the total number of MSMEs, 90.3 percent are micro enterprises, 9.3 percent are small enterprises and 0.4 percent are medium enterprises,” Rodriguez said.
For his part, Romero said there is a need to create a more effective financial institution that is better geared to the meet the needs of the MSMEs.
Under the bill, the National Government, its bureaus, offices and agencies are mandated to allocate at least 10 percent of all its procurement opportunities for goods and services to eligible MSMEs in accordance with the provisions of Republic Act No. 9184, otherwise known as the “Government Procurement Reforms Act”, and its implementing rules and regulations.
The proposal expands the membership of the Micro, Small and Medium Enterprises Development (MSMED) Council with the inclusion of the Secretary of Finance, three representatives from the MSME sector to be designated by a national organization representing and dominated by MSMEs as members.
Likewise, the Executive Director of the Cooperative Development Authority; a representative of a national organization representing and dominated by MSMEs; a representative of the microfinance nongovernment organizations (NGOs) designated by the Microfinance NGO Regulatory Council; one representative from the women sector designated by the Philippine Commission on Women; one representative from the youth sector designated by the National Youth Commission and a representative from non-stock savings and loan associations designated by the Alliance of Non-stock Savings and Loan Institutions, Inc. (ANSLI) shall form part of an Advisory Unit to the council.
For the period of another 10 years from the date of the effectivity of the amendatory Act, all lending institutions as defined under Bangko Sentral ng Pilipinas rules, whether public or private, shall set side at 8 percent for micro and small enterprises and at least 2 percent for medium enterprises of their total loan portfolio based on their balance as of the end the previous quarter, and make it available for MSME credit.