Press Release
September 23, 2009

Loren calls for full implementation
of 'kabuhayan,' MSMEs laws

Senator Loren Legarda yesterday called on the government for the strict and immediate implementation of the provisions of the Barangay Kabuhayan Act (R.A. 9509) and the Magna Carta for Micro, Small and Medium Enterprises (MSME) Act (R.A. 9501) to stimulate the so-called informal sector in the face of the alarming nosedive of the country's exports.

Loren said that stimulating the micro, small and medium enterprises which employs 69 percent of the country's labor force is an ideal response to the country's dwindling exports in the face of continuing global economic woes.

Loren explained that addressing the MSMEs concerns would certainly accelerate the growth and development of the country's flickering economy.

Loren noted the report of the National Statistics Office (NSO) that the country posted another double-digit decline in exports in July, slipping by 25.4 percent to $3.311 billion from the $4.437 in the same period last year.

"Like the US, Japan and China, we must redirect our production toward filling the needs of the domestic market, meaning our people, to stimulate economic growth," said Loren, as she noted that RP's traditional export markets such as Japan and US are shrinking because of the global slump in economy.

Loren said that producing goods for domestic market would reduce the Philippines' dependence on imports, save on foreign exchange, promote domestic employment and provide additional income for our producers.

The MSMEs are expected to have bigger role on wealth creation because under the Magna Carta for MSMEs (RA 9501), more MSMEs (micro, small and medium industries) will flourish providing more employment and additional income.

"Now, enterprises with capitalization of P3 million or below are classified as micro enterprises as compared to the previous cap of P1.5 million, and that with the increase of the cap, more Filipinos can now avail of the benefits provided in this law," said Loren, sponsor of the Magna Carta.

The other law which Loren sponsored and enacted was RA 9509 or the Barangay Kabuhayan Act, which specifically aims to establish a "Livelihood and Skills Training Center" in the fourth, fifth and sixth class municipalities.

Legarda said the two laws will be of great help to harmonizing all government activities providing livelihood and skills training to ensure efficiency in delivering such services and programs to their intended beneficiaries, the poorest of the poor.

The centers shall provide educational and instructional activities designed to enhance the knowledge, skills and activities of intended beneficiaries in order to better prepare them to engage in gainful employment and entrepreneurship.

"This law will complement the Small, Medium and Micro Enterprises Act (RA 6977) . The way I see it, recipients of the livelihood and skills training programs in the centers to be established under the Barangay Kabuhayan Law may well avail of the funding and technical support that are now available under the SMEs Act," she said.

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