Press Release
February 12, 2008


Senator Mar Roxas announced that a bicameral conference committee has approved on Tuesday amendments to the Magna Carta for Small Enterprises that will provide greater financial backing for Filipino entrepreneurs.

"After considerable deliberation, we have come up with the most effective measure augmenting the finances of our micro, small and medium enterprises [MSMEs], who are really the backbone of our economy," Roxas, a main proponent of the bill, said.

"The continuing concern of our MSMEs is coming up with the finances to make investments. Banks are more inclined to lend to the larger firms with longer credit history, which leaves MSMEs at a disadvantage. Amendments to the present Magna Carta for Small Enterprises will provide MSMEs with increased credit facilities," he added.

The bill as approved by the bicameral committee will require lending institutions to allocate at least 8% of their total loan portfolio to micro and small businesses. At present, the law requires only a 6% minimum allocation for these, and a minimum 2% allocation for medium enterprises.

The category of micro, small and medium businesses is also adjusted. Firms will now be considered as micro enterprises when they have total assets worth not more than P3 million, from the previous threshold amount of P1.5 million. Small enterprises will be those with total assets worth P3 million to not more than P15 million, and medium enterprises are those with total assets worth P15 million to not more than P100 million, from the previous threshold amount of P60 million. The amendments are in keeping with Republic Act No. 9178 otherwise known as the Barangay Micro Business Enterprises Law.

The Small Business Guarantee & Finance Corp. will be renamed as the Small Business (SB) Corp., and will have an authorized capital stock of P10 billion for the implementation of its policies and programs assisting MSMEs.

"MSMEs comprise over 99% of local businesses, and employ 70% of our total work force. Yet they only contribute 30% to our country's total productivity. This measure is based on the belief that our MSMEs deserve all the help we can give them," Roxas said.

The bill will have to be ratified by both the House of Representatives and the Senate before being transmitted to the President for enactment.

"The President has endorsed the bill already during our last LEDAC meeting in December, and I am confident this will be a law very soon," he said.

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