Press Release
November 26, 2018

Message of Senator Aquilino "Koko" Pimentel III
Pondo sa Pagbabago at Pag-asenso (P3) National Congress

Philippine International Convention Center

DTI Undersecretary Zeny Maglaya, Ma. Luna E. Cacanando, President and CEO of the Small Business Corporation, the Small Business Corporation Family, the 250-strong P3 accredited Micro Financing Institutes, the private sector, business leaders and trailblazing entrepreneurs here present, my fellow workers in government, and my fellow Filipinos, a pleasant "Good Afternoon" to all of you!

I am very happy to be with all of you today at the first ever Pondo sa Pagbabago at Pag-asenso (P3) National Congress. I also extend my sincere congratulations to the DTI and to the SBC for the successful conduct of this pioneering event, the first ever P3 National Congress.

Palakpakan at pasalamatan po natin ang DTI at SBCorp.!

Likewise, please accept my heartfelt thanks to all for inviting me to join you in this trailblazing event as one of your guests of honor. Considering the degree of good that we can potentially achieve today, please know that the honor is all mine.

One of the biggest challenges for owners of small businesses is access to capital. In several countries like the Philippines, there is a heavy dependence on collateral, which would usually be real estate. As we all know, most micro-entrepreneurs have no real assets to support traditional commercial bank lending.

Your government felt this need of the small businessman. Thus, the Philippine government has set up this landmark micro finance program through the Small Business Corporation.

Designed to be lent out to micro enterprises with asset size not exceeding P3.0 million at not more than 2.5% per month all-in interest rate and service charges, the Pondo sa Pagbabago at Pag-asenso (P3) Program has assisted over 51,000 micro enterprises throughout the country with a total of P1.6 billion of released loans, 93.9% of the funding so far provided for the program.

For many Filipinos, entrepreneurship is a big word. The word that is more commonly used is "business" or as how most Filipinos would say it, "sarili kong negosyo."

The role of micro, small and medium enterprises in the economic and social development of the country is well established. The micro-entrepreneurship sector is the nursery of entrepreneurship that is driven by an individual's creativity, passion and innovation.

Being an entrepreneur is associated with freedom. Along with this freedom comes many risks and challenges of a highly competitive market due to the lack of accessible resources, capital, credit as well as technical support and business know-how. However, despite all these factors, many of these small businessmen, like your neighborhood sari-sari store owners, market vendors, fish ball and other street food vendors, jeepney and tricycle drivers, still go about plying their trade, day-in and day out. Other faces of these "Entre-Pinoys" are those who cook, bake and sell goodies from home, as well as those who manage their own piggeries and chicken farms in their own backyards.

Indeed, for most of these enterprising Pinoys, having their own small business is a matter of survival. They rely on these means of income to put food on their table and provide for their needs and those of their family.

A study conducted by the Department of Trade and Industry showed that nearly a hundred percent of businesses in the country are micro, small and medium enterprises. The 2016 List of Establishments of the Philippine Statistics Authority (PSA) recorded a total of 915,726 business enterprises operating in the Philippines. Micro, small and medium enterprises (MSMEs) account for 99.57% (911,768) of the total establishments, of which 89.63% (820,795) were microenterprises, 9.50% (86,955) were small enterprises, and 0.44% (4,018) were medium enterprises. Large enterprises made up the remaining 0.43% (3,958).

These MSMEs provide many services and benefits that the rest of our countrymen sometimes take for granted. In many neighborhoods, sari-sari store owners make basic goods more accessible and affordable, while jeepney and tricycle drivers make transportation more affordable to those without cars. Another major benefit that micro-entrepreneurs provide is employment to those who would otherwise not be employed in larger companies because of their lack of qualifications.

Indeed, the support that the micro-entrepreneurs provide our country's economy is undeniable, and it is remarkable.

Because of the Pondo sa Pagbabago at Pag-asenso or P3 Program, many of our country's micro-entrepreneurs no longer lack resources and support, especially from the government. Legislation is not lacking to help support these micro-entrepreneurs. Republic Act 9501 was signed into law on May 23, 2008 to promote entrepreneurship by strengthening development and assistance programs to micro, small and medium scale enterprises.

However, it cannot be denied though that many of our countrymen still fall prey to usurers for lack of capital. Undaunted and with an overbearing desire to succeed, our Filipino entrepreneurs have embraced the evils of the 5-6 lending scheme. Ika nga nila, kapit sa patalim para lamang makaraos. The nefarious 5-6 scheme, denounced by no less than President Rodrigo Duterte himself, has ensnared our entrepreneurs in an endless and vicious cycle of debt. Imbes na makaahon sa kahirapan ay lalo pong nababaon sa utang ang ating mga magigiting na kababayan.

"5-6" lending imposes an interest rate of at least 20% daily and could go significantly higher given the weekly or daily collection schedule. The harsh lending environment is aggravated by the fact that 5-6 lenders are unregistered and without license to lend. In fact, it has been said that 5-6 lending in the country is a 30 billion-peso industry.

By providing a readily available, yet less imposing, source of credit and funding to qualified entrepreneurs, the P3 program provides a nurturing environment for the positive spirit and the can-do attitude of our entrepreneurs.

With the Small Business Corporation and the accredited Micro Financing Institutes (MFIs) who serve as conduits for the P3 program, the intended benefits of our law have reached our enterprising countrymen, nationwide. Development and assistance programs are now being implemented in many parts of the country. The continued development and proper implementation of the P3 program may well find these usurers out-of-business in the near future.

To the MFIs here present, I thank you for your passionate advocacy to support micro-entrepreneurs across the country through the development, planning and implementation of programs to support micro-entrepreneurship.

The Small Business Corporation implemented the P3 micro-lending program through all of you accredited MFIs with minimal interest, for marginalized entrepreneurs in many parts of the country. The support you were able to provide micro-entrepreneurs went beyond extending credit. I understand that you provided business training, finance and information services and were able to identify other forms of logistical support so that these micro-entrepreneurs can grow their businesses. Your remarkable and commendable implementation of the P3 program has and will continue to help micro-entrepreneurs become more and more self-sufficient.

President Duterte simply wants a "comfortable life" for all Filipinos. There can be no comfortable life without a job and there can be no jobs if there are no businesses. The formula is simple: pag may negosyo, may trabaho.

In the recently concluded APEC Economic Leaders' Meeting held in Port Moresby, Papua New Guinea, President Duterte pushed for empowerment of MSME's through proper training, human resource development, and preparation for businesses' digitalization.

The President also recognized that not all MSMEs are empowered to operate their respective digital operation regarding entering into e-commerce or, in fact, even getting access sometimes to stable internet. MSMEs must be provided with strong internet infrastructure or the ability to be able to maximize their access to information, data, e-commerce, and financial technology regarding e-payments. Consequently, it is important to provide a lot of training, retraining, and education for MSMEs.


The time is right to institutionalize the P3 program.

Our proposed law aims to provide our entrepreneurs more viable options as far as credit sources are concerned. We are aiming for more tolerable interest rates and we seek to eradicate the abuses that comes with unconscionable interest. We will create a culture of borrowing that creates and not one that enslaves, discourages and destroys.

Eventually, we can be a nation of entrepreneurs.

So, to the Small Business Corporation, congratulations for using your KOKOte in not only providing comprehensive policies and programs to assist MSMEs but more importantly for giving those who have less in life, more in law.

Ipagpatuloy po natin ang pagbigay ng naaayon na tulong sa ating mga kababayan na ang hangad lamang ay ang magkaroon ng makahulugang pagbabago para sa ikabubuti ng kanilang pamilya at lipunan, at upang tuluyan nilang madama ang walang humpay na pag-asenso ng kanilang kabuhayan.

Maraming salamat po at mabuhay po kayong masisipag at magigiting na negosyanteng Pilipino! Mabuhay ang Pilipinas!

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