By Ellson Quismorio
The House of Representatives has approved on third and final reading a measure that seeks to further promote, strengthen and encourage the growth and development of micro, small and medium enterprises (MSMEs) in the country.
All 212 members of the House in plenary session voted for the approval of House Bill (HB) No. 8714, principally authored by Cagayan de Oro 2nd district Rep. Maximo Rodriguez Jr.
The bill aims to strengthen and enhance the financing programs for MSMEs, amending Republic Act (RA) No. 6977, otherwise known as the “Magna Carta for Micro, Small and Medium Enterprises”.
‘The MSME sector accounts for 62.8 percent of total jobs generated by all types of business establishments in 2014. Of the total number, 90.3 percent are micro enterprises, 9.3 percent are small enterprises and 0.4 percent are medium enterprises,” Rodriguez said.
The Mindanao solon said that despite its importance to the economy of MSMEs, the lack of access to financing and related forms of support continue to be a challenge.
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 RA 9184, otherwise known as the “Government Procurement Reforms Act,” and its implementing rules and regulations.
The proposal expands the membership of the MSME 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.
The council’s advisory unit will include the executive director of the Cooperative Development Authority and a representative each of a national organization of MSMEs, the microfinance nongovernment organizations (NGOs) designated by the Microfinance NGO Regulatory Council; the women’s sector designated by the Philippine Commission on Women, the youth sector designated by the National Youth Commission and the non-stock savings and loan associations designated by the Alliance of Non-stock Savings and Loan Institutions, Inc. (ANSLI).
SB Corporation powers
The bill also states that the Small Business (SB) Corporation shall have a board of directors to be composed of 13 members that shall include the presidents of the Government Service Insurance System (GSIS) and the Social Security System (SSS).
All board members, except for the ex-officio, shall serve a term of three years and may be reappointed to another term unless earlier revoked. If the term of the incumbent member has expired, the member shall continue to function in a holdover capacity until a replacement has been appointed.
Included in the specific powers and authorities of the board of directors is providing for the organizational structure, staffing pattern and compensation of employees and personnel of the SB corporation, for submission to the Governance Commission for GOCCs.
The bill provides that the SB corporation can extend all forms of financial assistance, except grants and subsidies to eligible MSMEs, and not preclude retail lending in areas where private banks are not able to serve, subject to consultation with the private banks.
It is mandated to submit an annual report to the MSMED Council, Congress and the Governance Commission for GOCCs. It shall be exempt from securing prior BSP authorization for engaging in quasi-banking activities and shall not be subject to BSP supervision and regulation for such activities.
On the other hand, the board, through its chairman, shall be fully responsible and accountable for the performance of the corporation’s mandate by constituting a managing board to conceptualize its strategic plans and policies.
Furthermore, SB Corporation shall adopt a balanced scorecard approach, subject to the review and approval of the Governance Commission for GOCCs, to enable it to manage its financial performance..