QuestionsQuestions (Commonwealth Act No. 471)
The short title is the “Barangay Micro Business Enterprises (BMBEs) Act of 2002.” The policy is to hasten economic development by encouraging the formation and growth of BMBEs as seedbeds of Filipino entrepreneurial talent, integrating informal sector enterprises into the mainstream economy through rationalizing bureaucratic restrictions, active government intervention (especially at the local level), and providing incentives to generate employment and alleviate poverty.
A BMBE is any business entity engaged in production, processing/manufacturing of products/commodities (including agro-processing), trading, and services whose total assets—including those arising from loans but excluding the land where the business office/plant/equipment are situated—shall not exceed PhP 3,000,000.00.
Yes. “Services” exclude those rendered by any person duly licensed by the government after passing a government licensure examination in connection with the exercise of one’s profession.
The application shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBE is deemed registered.
It is effective for two (2) years and renewable for another two (2) years for every renewal.
Any person (natural or juridical), cooperative, or association that has the qualifications defined in Section 3(a) of RA 9178 may apply for registration as a BMBE.
The BMBE must report to the city or municipality any change in its ownership structure and surrender the original copy of its Certificate of Authority for notation of the transfer.
All BMBEs are exempt from income tax for income arising from the operations of the enterprise.
Yes, BMBEs are exempt from the coverage of the Minimum Wage Law. However, all employees covered under the Act are entitled to the same benefits as regular employees, such as social security and healthcare benefits.
RA 9178 requires special credit windows consistent with BSP rules for BMBE financing. LBP, DBP, SBGFC, and PCFC must set up a special credit window; GSIS and SSS must also set up special credit windows for their respective members who wish to establish a BMBE.
Loans from whatever sources granted to BMBEs are considered part of alternative compliance. For compliance purposes, loans to BMBEs shall be computed at twice the face value of the loans.
Yes. Interests, commissions, and discounts derived from the loans by LBP, DBP, PCFC, and SBGFC granted to BMBEs, and loans extended by GSIS and SSS to their member-employees under this Act, are exempt from gross receipts tax (GRT).
A BMBE Development Fund with an endowment of PhP 300,000,000.00 is set up from PAGCOR and administered by the SMED Council.
DTI, DOST, UP ISSI, CDA, TESDA, and TLRC may avail of the Fund for technology transfer, production/management training, and marketing assistance to BMBEs.
For willful violation or acts defeating the Act: fine of not less than PhP 25,000 but not more than PhP 50,000 and imprisonment of not less than 6 months but not more than 2 years. For non-compliance with Section 9 (credit delivery): the BSP shall impose administrative sanctions and penalties on concerned government financial institutions, including a fine of not less than PhP 500,000.
It takes effect fifteen (15) days after publication in the Official Gazette or in at least two (2) newspapers of general circulation. IRR must be formulated within 90 days after approval by the DTI Secretary in consultation with DILG, DOF, and BSP Governor; IRR takes effect 15 days after publication in a newspaper of general circulation.