P3 Fund bill seeks to boost microenterprise growth

A LAWMAKER has filed a bill seeking to institutionalize the Pondo sa Pagbabago at Pag-asenso (P3) Fund to provide financial assistance specific to micro-enterprises.

“This bill will contribute to the strengthening and facilitating the growth and development of the sector towards the creation of more income and jobs,” Party-list Rep. Eduardo C. Villanueva said in House Bill No. 9634.

Institutionalizing the P3 Fund would “ensure availability and accessibility of micro-financing to millions of microentrepreneurs such as market vendors, sari-sari store owners, and stall owners to help them sustain and grow their businesses,” Mr. Villanueva said.

Microenterprises make up 90.49% or over 1 million of the Philippines’ total number of establishments, according to 2022 data released by the Philippine Statistics Authority (PSA).

Under the bill, financial assistance will be given to micro-enterprises through direct lending or lending through an accredited partner financial institution (PFI).

Accredited PFIs include rural and cooperative banks, micro-financing institutions, or lending companies licensed by the central bank, the Cooperative Development Authority, or the Securities and Exchange Commission.

Other features of the P3 fund include a 2% interest rate to be imposed on the loan availed of by the beneficiary per month as well as interest earnings that will accrue to the fund. There will also be no collateral requirement for P3 fund beneficiaries, according to the bill.

The total loanable amount will be set and reviewed by the Micro, Small, and Medium Enterprise Development (MSMED) Council.

The Small Business Corp. (SBC), which is currently handling the P3 fund, will be the implementing agency once it is enacted into law.

An amount of up to 5% of the total loans disbursed will be sourced from the national budget to support the operations of the SBC.

The Labor department would also be tasked to assist micro-entrepreneurs’ transition to formal work engagements.

According to the PSA, small enterprises only make up 8.69% or 96,464 of the Philippines’ total number of establishments. This is followed by medium enterprises at 0.40% or 4,484, and large enterprises at 0.41% or 4,541 establishments.