Question & AnswerQ&A (Republic Act No. 9501)
Republic Act No. 9501 is known as the Magna Carta for Micro, Small and Medium Enterprises (MSMEs).
MSMEs are defined as enterprises engaged in industry, agribusiness, and/or services with the following asset sizes: Micro - not more than P3,000,000; Small - P3,000,001 to P15,000,000; Medium - P15,000,001 to P100,000,000 (excluding land for office, plant, and equipment).
The policy is to promote, support, strengthen, and encourage the growth and development of MSMEs in all productive sectors of the economy, particularly rural/agri-based enterprises, recognizing MSMEs' potential to generate employment and economic growth.
To qualify, MSMEs must be: (a) duly registered with appropriate agencies (municipal or city treasurer registration suffices for micro enterprises); (b) 100% Filipino-owned for sole proprietorships/partnerships or at least 60% Filipino-owned if a juridical entity; (c) engaged in major economic sectors like industry, trade, services, tourism-related establishments, and agribusiness; (d) not a branch, subsidiary, or division of a large enterprise.
At least 10% of the total procurement value of goods and services supplied to the government, its bureaus, offices, and agencies annually shall be allocated to eligible MSMEs.
The Small Business Corporation (SB Corporation) is created and tasked with implementing comprehensive policies and programs to assist MSMEs, including but not limited to finance, information services, training, and marketing.
The MSMED Council coordinates government and private sector activities for MSME development, recommends policies to the President and Congress, monitors progress, assists agencies, promotes linkages, oversees implementation of the MSME development plan, and reports annually to the President and Congress.
Lending institutions must set aside at least 8% of their total loan portfolio for micro and small enterprises for ten years from the effectivity of the law. This can be met through various forms like loans to MSMEs, subscription to SB Corporation shares, wholesale lending to PFIs, etc.
Penalties collected for noncompliance shall be directed to the development of the MSME sector, with 90% of the penalties going to the MSMED Council Fund and the remaining 10% to the Bangko Sentral ng Pilipinas for administrative expenses.
It is observed during the second week of July every year to promote awareness and commitment to the growth and development of MSMEs.