Section 1. Sec. 3 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
Sec. 2. Sec. 4 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"(a) duly registered with the appropriate agencies as presently provided by law: Provided, That in the case of micro enterprises as defined herein, registration with the office of the municipal or city treasurer shall be deemed sufficient compliance with this requirement;
"(b) one hundred percent (100%) owned and capitalized by Filipino citizens if single proprietorship or partnership. If the enterprise is a juridical entity, at least sixty percent (60%) of its capital or outstanding stocks must be owned by Filipino citizens.
"(c) a business activity within the major sectors of the economy, namely: industry, services, including the practice of one's profession, the operation of tourism-related establishments, and agri-business, which for purposes of this Act refers to any business activity involving the manufacturing, processing, and/or production of agricultural produce, excluding farm level agriculture/crop production; and
must not be
subsidiary or division of a large scale enterprise nor may its policies
be determined by a large scale enterprise or by persons who are not
or employees of the enterprise.
Sec. 3. Sec. 5 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"(b) Role of the private sector. - In order to hasten growth and expansion of small and medium enterprises, the private sector throughout the country shall be encouraged to assist in the effective implementation of this Act by participating in government programs for small and medium enterprises strictly in accordance with the law, and consistent with the attainment of the purposes hereof. To encourage private sector participation, the Council, in consultation with the concerned sector, may recommend simplified procedure and localized incentives to small enterprises. The Government shall encourage the organization and establishment of small and medium enterprise industry associations at the local and regional levels preferably unified under a national federation/association.
"(c) Coordination of government efforts. - Government efforts shall be coordinated to achieve coherence in objectives. All appropriate offices, particularly those under the Departments of Trade and Industry, Finance, Budget and Management, Agriculture, Agrarian Reform, Environment and Natural Resources, Labor and Employment, Transportation and Communication, Public Works and Highways, Science and Technology, Local Government and Tourism as well as the National Economic and Development Authority and the Bangko Sentral ng Pilipinas, through their national, regional and provincial offices, shall to the best of their effort and in coordination with local government units, provide the necessary support and assistance to small and medium enterprises.
"(d) Decentralization. - The State shall accelerate the decentralization process by establishing regional and provincial offices in order to enhance and attain greater efficiency in the provision of services to the countryside and the implementation of this Act, in coordination with local government units. To this end, the government agencies shall effect a substantial delegation of authority to their regional and provincial offices to make decisions, particularly in the registration of beneficiaries of this law, qualification for availment of benefits, accreditation of private voluntary organizations, industry associations and cooperatives, and to resolve complaints for violation of applicable laws."
Sec. 4. Sec. 6 of Republic Act. No. 6977 is hereby amended to read as follows:cralaw
"The Council shall be the primary agency responsible for the promotion, growth and development of small and medium enterprises in the country by way of facilitating and closely coordinating national efforts to promote the viability and growth of small and medium enterprises, including assisting relevant agencies in the tapping of local and foreign funds for small and medium enterprise development, as well as promoting the use of existing programs, as well as seeking ways to maximize the use of our labor resources."
Sec. 5. Sec. 7 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"(b) Secretary of Agriculture;
"(c) Secretary of Labor and Employment;
"(d) Secretary of Environment and Natural Resources;
"(e) Secretary of Science and Technology;
"(f) Secretary of Tourism;
"(g) The Chairman of the Monetary Board;
"(h) Chairman of Small Business Guarantee and Finance Corporation;
"(i) Chairman of the small and medium enterprises promotion body which the President shall undertake to establish under this Act; and
"(j) Three (3) representatives from the private sector at large, all Filipino citizens, to represent Luzon, Visayas and Mindanao, and one representative from the small and medium enterprises sector to be appointed by the President; and
"(k) a representative from the private banking sector to serve alternately among the Chamber of Thrift Bank; the Rural Bankers' Association of the Philippines (RBAP); and the Bankers' Association of the Philippines (BAP).
"Cabinet-rank ex officio members of the Council shall designate an undersecretary or assistant secretary, and the chairman of the Monetary Board or his representative, as their permanent representative in case they fail to attend meetings of the Council.
"The private sector members of the shall initially receive per diem of One Thousand pesos (P1,000) per meeting, for a maximum of twenty-four (24) meetings per year, which per diem may be adjusted by the Council: Provided, that may such adjustment shall take effect upon approval of the President.
"The Department of Trade and Industry shall allocate Five million pesos (P5,000,000) out of its savings for the initial operating expenses of the Council, after which, the Council's budget shall be included in the annual appropriation of the Department of Trade and Industry.
"The Council may, from time to time, call upon the participation of any government agency or association of local government officials in its deliberations especially when such agency is directly or indirectly concerned with and/or affecting the growth and development of small and medium enterprises in any particular area or manner.
"The Council may create an Executive Committee of five (5) members elected by the Council from among themselves or their designated permanent representatives, with at least two (2) members representing the private sector, and with authority to act for and on behalf of the Council during intervals of council meetings representing the private sector, and with authority to act for and on behalf of the Council during intervals of council meetings, and within the specific authority granted by the Council."
Sec. 6. Sec. 9 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"(2) to coordinate the preparation of position papers and background materials for discussion or approval during Council meetings;
"(3) to assist the Council in coordinating and monitoring small and medium enterprise policies and programs and activities of all government agencies with respect to small and medium enterprises;
"(4) to prepare, collate and integrate all inputs to the Council's yearly report on the status of small and medium enterprises in the country;
"(5) to submit periodic reports to the Council on the progress and accomplishment of its work programs; and
"(6) to perform ad hoc functions as authorized by the Council."
Sec. 7. Sec. 10 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"The President is hereby also empowered to establish a small a and medium enterprise promotion body which shall be the principal government agency that will formulate, implement, coordinate and monitor all non-financing government programs, including fee-based services, to support and promote micro, small and medium enterprises. It shall be attached to the Department of Trade and Industry and shall be under the policy, program and administrative supervision of the SMED Council. The said office shall receive no less than fifty percent (50%) of the assets, and budgetary allocations of the agencies for promotion, development and financing of small and medium enterprises that may be henceforth dissolved and/or abolished and absorbed, incorporated and integrated into the SMED Council."
Sec. 8. Sec. 11 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"The Corporation shall guarantee loans obtained by qualified small and medium enterprises, local and/or regional associations' small enterprises and industries, private voluntary organizations and/or cooperatives, under such terms and conditions adopted by its Board. It may guarantee loans up to one hundred percent (100%). It may also provide second level guarantee (i.e., reinsurance) on the credit and/or investment guarantees made by credit guarantee associations and other institutions in support of small entrepreneurs.
"The Corporation shall become liable under its guarantees upon proof that the loan has become past due under such terms and guidelines adopted by its Board and printed on the contract of guarantee.
"The Small Business Guarantee and Finance Corporation shall:
"(a) be attached to the Department of Trade and Industry and shall be under the policy, program and administrative supervision of the SMED Council;
"(b) have its principal place of business in Metro Manila and endeavor to have one or more branch offices in every province of the country;
"(c) exercise all the general powers conferred by law upon corporation under the Corporation Code as are incidental or conducive to the attainment of the objectives of this Act;
"(d) have a board of directors upon to which the powers of the Corporation shall be vested, to be composed of nine (9) members including:
"(2) the Secretary of Trade and Industry or his Undersecretary; and
"(3) a representative from each of the five (5) government financial institutions mandated in this Act to provide the initial capital of the Corporation, who shall be designated, under guidelines agreed upon by the Board Chairmen of said institutions;
Sec. 9. Sec. 13 of Republic Act No. 6977 is hereby amended to read as follows:cralaw
"The Bangko Sentral ng Pilipinas, in consultation with the Council, shall formulate rules for the effective implementation of this provision: Provided, That the purchase of government notes, securities and other negotiable instruments, with the exemptions of such instruments as may be offered by the SBGFC which do not pay market rates, shall not be deemed compliance with the foregoing provision: Provided, further, That the Bangko Sentral ng Pilipinas shall establish an incentive program to encourage lending to small and medium industries beyond mandatory credit allocation to said enterprises, such as possible reduction in bank's reserve requirement.
"The SMED Council shall set up the appropriate systems to monitor all loan applications of small and medium enterprises in order to account for the absorptive capacity of the small and medium enterprises sector.
"The Bangko Sentral ng Pilipinas shall require lending institutions covered by this Act to furnish to the Small and Medium Enterprise Development Council on a quarterly basis regular reports on their compliance with the above provisions on the mandatory credit allocations for small and medium enterprises and expeditiously act on the Council's reports of non-compliance therewith."
Sec. 10. Sec. 14 of Republic Act No, 6977 is hereby amended to read follows:cralaw
Sec. 11. Separability Clause. - The provision of this Act are hereby declared to be separable. If any provision of this Act shall be held unconstitutional, the remainder of the Act not other wise affected shall remain in full force and effect.
Sec. 12. Repealing Clause. - All laws, executive orders, rules and regulations, or parts thereof, inconsistent herewith are hereby repealed or modified accordingly.
Sec. 13. Effectivity.
- This Act shall take effect upon its approval.
Approved: September 30, 1997.
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