Press Release
May 23, 2008

Loren's pet bill on MSMEs signed into law today

Senator Loren Legarda lauded yesterday the scheduled signing today (May 23) into law by President Arroyo of amendments to the Magna Carta for Small Enterprises that will strengthen and provide more assistance to micro, small and medium-scale enterprises (MSMEs).

The signing ceremony will be held in Malacañang this morning.

Legarda described the consolidated Senate Bill 1646 and House Bill 1754 as a "breakthrough piece of legislation which senators and congressmen alike worked hard for to empower MSMEs."

She said the new law will benefit the MSME sector which accounts for 99 percent of total commercial and industrial establishments in the country, employing 69 percent of the labor force.

"By their sheer number and inescapable presence alone, addressing MSMEs concerns will certainly accelerate the growth and development of our nation's economy and lead to a better life for our people," said Legarda in her sponsorship speech last February.

Under the amended law, the micro, small and medium enterprises (MSMEs) definition was modified in order to include more MSMEs, especially those that really belong in the micro sector.

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

The Small and Medium Development Council, renamed as the Micro, Small and Medium Enterprises Development (MSMED) Council, was strengthened to effectively spur the growth and development of MSMEs in the country. Included in the Council are three representatives from the MSME sector to represent Luzon, Visayas, and Mindanao.

The amended magna carta would also rename the Small Business Guarantee and Finance Corporation as the Small Business Corporation, with its authorized capital stock increased to P10 billion. It shall guarantee all loans obtained by qualified MSMEs.

Legarda also said that the amendments will enable MSMEs to grow while still being eligible for government assistance by permitting them to accept subcontracts or enter into franchise agreements with large enterprises or to join cooperative activities with other MSMEs.

Legarda sponsored SB 1646 as chair of the Senate Economic Affairs Committee, which conducted public hearings and studies on MSMEs and consolidated related bills.

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