Social enterprise measure hurdles House committee

A HOUSE of Representatives committee on Wednesday approved a bill that seeks to provide funding and support to social enterprises (SEs) geared towards reducing poverty.

“The bill provides the framework for the implementation of a national Poverty Reduction Through Social Entrepreneurship or the PRESENT program,” Bukidnon Rep. Jose Manuel F. Alba told the House micro, small, and medium enterprises (MSMEs) committee.

“The bill also seeks to provide incentives and benefits to promote the growth of social enterprises,” according to Mr. Alba, who headed the technical working group that fine-tuned the measure.

Under the bill, the PRESENT program will be incorporated as a strategy within the government’s broader poverty-reduction efforts.

“As a poverty reduction strategy, social enterprises create social and economic value that benefits the poor as their primary stakeholders,” Mr. Alba said.

Batangas Rep. Mario Vittorio A. Mariño, who also heads the trade and industry committee, proposed that social entrepreneurs be granted post-graduate scholarships under the bill.

SEs will also undergo capacity building under the proposed law, which will focus on social entrepreneurship development, institutional training, and human resource and skills training.

They must also be given training in business planning and advisory services, the upgrading of accounting and auditing systems, and technical assistance in installing management and information systems.

SEs should also be guided on how to prepare market studies, achieve product competitiveness, and participate in business matching activities and trade fairs and missions.

Under the bill, SEs could qualify for hybrid financing, including grants or loans and other financial instruments.

Banks and other lending institutions are also encouraged to provide concessional financial packages and the Small Business Corp. will be required to offer loans to qualified SEs, according to a copy of the bill.

Financial sustainability will not be a prerequisite for an SE to avail of the incentives and benefits as long as it can present a “workable strategy to achieve financial sustainability over a reasonable period,” it added.

The unnumbered substitute measure also seeks to create the Social Enterprise Guarantee Fund Pool, to which government-owned and -controlled corporations will contribute 5% of their budget surpluses within five years of the measure’s enactment.

It also aims to expand the Micro Small Medium Enterprise Development Council under the Trade department to cover both MSMEs and social enterprises. It will be renamed the National Enterprise Development Council.

The bill defines social enterprises as hybrid organizations that aim to profit while addressing a social issue in a sustainable manner.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that support for SEs is most crucial during calamities and disasters.

“Financial and non-financial aid from the government and from global development organizations may also be channeled to these SEs, especially during challenging times such as during the COVID lockdowns, storms, and other calamities,” he said via Facebook Messenger chat.

“We support all kinds of entrepreneurship and anything that could potentially contribute to employment and other good causes,” Go Negosyo founder Jose Ma. A. Concepcion III said in a statement.

The Philippines has about 164,473 SEs, or 17% of registered companies, according to estimates from the British Council and Philippine Social Enterprise Network in 2015-2017.

Among the SEs, 70% are MSMEs, 23% are nongovernment organizations, while 6% are cooperatives. — Beatriz Marie D. Cruz