Bmbe Complete

Q & A on
Republic Act No. 9178

Barangay Micro Business Enterprises
(BMBEs) Act of 2002
1) What is the law all about?

The “BMBEs Act of 2002” encourages the formation and growth of barangay
micro business enterprises by granting them incentives and other benefits.
The Act was signed into law by President Gloria Macapagal-Arroyo on

November 13, 2002. Its Implementing Rules and Regulations (IRR) which
was issued on February 7, 2003, as DTI Department Administrative Order
No. 1, Series of 2003, was published twice in the February 11 and 26,
2003 issues of the Manila Bulletin.
A BMBE is defined as any business enterprise engaged in production,

processing, or manufacturing of products, including agro-processing, as
well as trading and services, with total assets of not more than P3 million.
Such assets shall include those arising from loans but not the land on
which the plant and equipment are located.
For the purpose of the Act, “services” shall exclude those rendered by any
one, who is duly licensed by the government after having passed a
government licensure examination, in connection with the exercise of one’s
profession (e.g., Accountant, Lawyer, Doctor, etc.).
The DOF Department Order No. 17-04 also provides that, an enterprise
can only qualify for registration if it is not a branch, subsidiary, division or
office of a large scale enterprise and its policies and business modus
operandi are not determined by a large scale enterprise or by persons
who are not owners or employees of the enterprise (i.e., franchises).
2) What is the objective of the law?

BMBEs are essential to the country’s economic development since they
effectively serve as seedbeds of Filipino entrepreneurial talent. Thus, the
Act primarily aims to integrate micro enterprises in the informal sector
into the mainstream of the economy. Strengthening BMBEs would mean
more jobs and livelihood, and a better quality of life for Filipinos.
3) What are the incentives that BMBEs will be receiving?

Registered BMBEs can avail of the following incentives:
Income tax exemption from income arising from the operations of the
enterprise;
Exemption from the coverage of the Minimum Wage Law (BMBE
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employees will still receive the same social security and health care
benefits as other employees);
Priority to a special credit window set up specifically for the financing
requirements of BMBEs; and
Technology transfer, production and management training, and
marketing assistance programs for BMBE beneficiaries.
The LGUs are also encouraged to either reduce the amount of local
taxes, fees, and charges imposed or exempt the BMBEs from local taxes,
fees, and charges.
4) What are the agencies mandated to provide assistance in the areas

of technology transfer, production and management training,
marketing assistance?
The agencies concerned are the following:
Department of Trade and Industry (DTI)
Department of Science and Technology (DOST)
University of the Philippines Institute for Small Scale
Industries (UP-ISSI)
Cooperative Development Authority (CDA)
Technical Education and Skills Development Authority (TESDA)
Technology and Livelihood Resource Center (TLRC)
5) What are the funding agencies designated to set up the special

credit window for registered BMBEs?
The following government financial institutions will provide a special credit
window for BMBEs:
Land Bank of the Philippines;
Development Bank of the Philippines;
Small Business Guarantee and Finance Corporation;
People’s Credit and Finance Corporation;
Quedan and Rural Credit Guarantee Corporation;
Government Service Insurance System (for members only); and
Social Security System (for members only)
6) Who may avail of the special credit window for BMBEs?

Only registered BMBEs may take advantage of the credit facility and other
benefits granted under the law. This means that the enterprise must first
have a Certificate of Authority which authorizes it to operate as a BMBE.
7) How does one register as a BMBE?

Based on the guidelines issued by the DTI under DTI DAO No. 01-03 and
DOF under the DOF D.O. No. 17-04 (as amended by DO No. 31-05) any
person, cooperative, or association owning an enterprise that fits the
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description of a BMBE may register for the first time or renew its registration
with the Office of the Treasurer of the city or municipality where the business
is located.
7.1 Basic requirements for new applicants and for BMBEs applying for
renewal of registration:
a. Duly filled out application form (BMBE Form 01) in triplicate, signed
by the owner or manager of the entity applying for registration;and,
b. Three passport size ID pictures.
7.2 Additional requirements for new applicants:

a. For those with assets worth three hundred thousand pesos
(P300,000) and less –
1. Registration as a business entity or enterprise from the
appropriate government agency (e.g., Securities and
Exchange Commission (SEC) registration in the case of
corporation, partnership or association; Cooperative
Development Authority (CDA) registration in the case of
cooperative; Department of Trade and Industry (DTI) business
name registration in the case of sole proprietorship); and
2. Mayor’s Permit or City/ Municipal Business Permit.
b. For those with assets worth more than three hundred thousand
pesos (P300, 000) up to three million pesos (P3, 000,000.00) –
1. Registration as a business entity as explained above in item
no.7.2a.1
2. Taxpayer Identification Number (TIN);
3. Certificate of Registration from the Bureau of Internal
Revenue (BIR);
4. Mayor’s Permit or City/Municipal Business Permit;
5. Sworn affidavit executed by the sole proprietor or the President
of the enterprise, as the case may be, that the enterprise is
barangay-based and micro-business in nature and scope;
6. Sworn Statement of Assets and Liabilities supported by
pertinent documents;
7. Pictures of the place of business and its assets, other than
cash, receivables and intangibles;
8. Copy of Loan Contract/s, if any, and duly-notarized
Certification of Amortization Payments on the Loan; and
9. Income Tax Return (ITR).
7.3 Additional requirements for the renewal of BMBE registration:

a. For those with assets worth three hundred thousand pesos
(P300,000) and less –
1. Documents previously listed in item 7.2a for new applicants
with assets worth three hundred thousand pesos and less; and
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2. Annual Information Return (for the year immediately preceding
the renewal of registration) duly filed with the BIR, together
with its attachments.
b. For those with assets worth more than three hundred thousand
pesos (P300,000) up to three million pesos (P3,000,000.00) –
1. Documents previously mentioned in item 7.2b (1-8); and
2. Annual Information Return (for the year immediately preceding
the renewal of registration) duly filed with the BIR, together
with its attachments.
Procedures:
a. Accomplish BMBE Form 01 in triplicate and submit to the Office
of the Municipal or City Treasurer.
b. The Municipal or City Treasurer evaluates the application. The
application shall be processed within 15 working days upon
submission; otherwise, the BMBE shall be deemed registered.
c. A registered BMBE shall be issued a Certificate of Authority as
proof of registration, effective for a period of two years. The
application is renewable every two years.
8) How much will it cost to register?

Registration and issuance of the Certificate of Authority of the LGU is free
of charge and shall be done promptly. However, to defray the administrative
costs of registering and monitoring the BMBEs, the LGUs are allowed to
charge a fee not exceeding P1, 000.00.
9) How can a BMBE avail of the exemption from the coverage of the
minimum wage law?
Once a BMBE is registered and issued with a Certificate of Authority by
the Municipal or City Treasurer, it is automatically exempted from the
minimum wage law.
10) What is the effect of the law on wages of existing/newly hired

employees?
Existing employees shall continue to receive their wages, allowances,
and other benefits. On the other hand, wages of employees hired by
BMBEs after the latter’s registration shall be exempted from the coverage
of the minimum wage law. BMBE workers shall continue to be covered by
applicable labor laws and regulations, including the non-diminution rule on
existing wages and benefits.
11) Is the exemption from the coverage of the minimum wage law
prospective in nature?
Yes. The rule is that laws shall have prospective application only. Thus, an
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enterprise’s exemption from the coverage of the minimum wage law can
only be applied to employees hired after its registration as a BMBE.
12) How much should a BMBE worker be paid for his services?
It depends between the employer and the worker. They shall mutually
agree on the acceptable wage rate.
13) What are the steps in availing of the Income Tax Exemption?
The BMBE registers with the BIR Revenue District Office (RDO) where the
principal office or place of business is located and its submission of the
necessary documents.
14) What are the documents to be submitted to the BIR to avail of Income
Tax Exemption?
a. Copy of the BMBE’s Certificate of Authority
b. Sworn Statement of Assets of the BMBE and/or its affiliates, supported
by pertinent documents
c. Certified list of branches, sales outlets, places of production,
warehouses and storage facilities
d. Certified list of affiliates
e. Latest audited Financial Statement or Account Information Form or
its equivalent
15) What document should be filed with BIR by an income tax exempt
BMBE?
In lieu of an income tax return, an income tax exempt BMBE is required to
submit an Annual Information Return. This is filed on or before the 15th
day of the 4th month after the close of the taxable year with an Account
Information Form, which contains data from its financial statement and
Sworn Statement of Assets Owned and/or Used.
16) Is the Income Tax Exemption privilege of a BMBE irrevocable?

No. The income tax exemption privilege of a BMBE may be revoked for
any of the following reasons:
a. Transfer of place of business;
b. Value of its total assets exceeds P3M;
c. Voluntary surrender of the Certificate of Authority;
d. Death of the registered individual owner of the BMBE; violation or non-
compliance with the provisions of R.A. 9178;
e. Merger or consolidation with an entity which is not eligible to be a
BMBE;
f. Sale or transfer of the BMBE, if it is a sole proprietorship without
prejudice to the transferee applying for registration;
g. Submission of fake or falsified documents;
h. Retirement from business, or cessation/suspension of operations for
one year; and
i. Making false or omitting required declarations or statements.
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CONTACT PERSONS
Income Tax Exemption

Atty. Elenita Quimosing Ms. Ma. Lourdes Recente
Chief of Staff Director, Research and Information Office
Operations Group Department of Finance (RIO-DOF)
Bureau of Internal Revenue Mr. Ronnie Buenviaje
Tel. no.: (02) 981.7234 Officer-in-Charge, Research and
Fax no.: (02) 928.3562 Liaison Division, RIO-DOF
Tel. no.: (02) 526/6968
Fax no.: (02) 526.8462
Credit and/or Guarantee Assistance
Mr. Liduvino Geron Ms. Marissa Caparaz
Assistant Vice President Officer-In-Charge, Corporate Services
Land Bank of the Philippines Cluster, Quedan and Rural Credit
Tel. no.: (02) 405.7309 Guarantee Corporation
Fax no.: (02) 528.8545 Telefax : (02) 373.9712
Mr. Melvin Abanto Ms. Adelwisa Carandang
Vice President Program Supervisor
Small Business Guarantee and Social Security System (SSS)
Finance Corporation for members only
Tel. no.: (02) 751.1888 Tel. no.: (02) 926.1644
Fax no.: (02) 813.5720 Fax no.: (02) 927.8249
Ms. Julia Valdez Ms. Livia Ramos

Vice President Vice President, Investment
People’s Credit and Finance Management Office
Corporation Government Service Insurance System
Tel. no.: (02) 897.8521 loc. 106 (GSIS) -for members only
Fax no.: (02) 325.0448/49 Tel. no.: (02) 891.6161 loc. 4323
Fax no.: (02) 891.6152
Mr. Jack Galvezon
Assistant Vice President
Advocacy Unit, SME Department
Development Bank of the
Philippines
Tel. no.: (02) 818.9511 loc. 2529
Fax no.: (02) 894.4927
Minimum Wage Exemption
Atty. Welma Sicangco
Division Chief
National Wages and Productivity Commission
Tel. no.: (02) 527.8012 -17 L102
Fax no.:(02) 527.5522
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CONTACT PERSONS
Technology Transfer, Production & Management Training,

and Marketing Assistance
Ms. Alicia Opeña Mr. Rogelio Peyuan
Division Chief Deputy Director General for Field
Bureau of Micro, Small and Operations
Medium Enterprise Development Mr. Yerman Saulon
Department of Trade and Executive Director for Regional
Industry (BMSMED-DTI) Coordination Office (External Affairs)
Tel. no.: (02) 897.7596 Technical Education and Skills
Fax no.:(02) 896.7916 Development Authority (TESDA)
Tel. no.: (02) 817.5030/8153360
Engr. Edgar Garcia Fax no.:(02) 817.9040
Division Manager
Technology Application Dr. Ma. Rosalinda Lacsamana
and Promotion Institute Group Manager
Department of Science and Livelihood Information
Technology (DOST-TAPI) Dissemination Services Group
Tel. no.: (02) 837.6189 Technology Livelihood Resource
Fax no.:(02) 837.6188/838.1112 Center (TRC-LIDSG)
Tel. no.: (02) 727.6205 loc. 200
Prof. Ruperto Alonzo Fax no.:(02) 721.0063
Director
UP-Institute for Small Ms. Marieta Hwang
Scale Industries (UP-ISSI) Chief, Registration Division
Tel. no.: (02) 920.6923 Cooperative Development
Fax no.:(02) 920.6923 Authority (CDA)
Telefax: (02) 725.5510
Reportorial Requirements of LGUs

Mr. Manuel Gotis Ms. Ma. Lourdes Recente
Director Director, Research and Information Office
Bureau of Local Government Department of Finance (DOF-RIO)
Development (DILG-BLGD) Tel. no.: (02) 526/6968
Tel. no.: (02) 929.9235 Fax no.: (02) 526.8462
Fax no.:(02) 929.9235
Ms. Ma. Presentatcion Montesa
Executive Director
Bureau of Local Government Finance
Department of Finance (DOF-BLGF
Tel. no.: (02) 527.2780
Fax no.: (02) 527.3134
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Congress of the Philippines
TWELFTH CONGRESS
Second Regular Session
REPUBLIC ACT NO. 9178
AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY

MICRO BUSINESS ENTERPRISES (BMBEs), PROVIDING INCENTIVES
AND BENEFITS THEREFOR, AND
FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the

Philippines in Congress assembled:
PRELIMINARY PROVISIONS
SEC. 1. Short Title. – This Act shall be known as the “Barangay Micro
Business Enterprises (BMBEs) Act of 2002”.
SEC. 2. Declaration of Policy. – It is hereby declared to be the policy of

the State to hasten the country’s economic development by encouraging the
formation and growth of barangay micro business enterprises which effectively
serve as seedbeds of Filipino entrepreneurial talents, and integrating those in
the informal sector with the mainstream economy, through the rationalization
of bureaucratic restrictions, the active intervention of the government specially
in the local level, and the granting of incentives and benefits to generate much-
needed employment and alleviate poverty.
SEC. 3. Definition of Terms. – As used in the Act, the following terms

shall mean:
(a) “Barangay Micro Business Enterprise,” hereinafter referred to as BMBE,

refers to any business entity or enterprise engaged in the production, processing
or manufacturing of products or commodities, including agro-processing, trading
and services, whose total assets including those arising from loans but exclusive
of the land on which the particular business entity’s office, plant and equipment
are situated, shall not be more than Three Million Pesos (P3, 000,000.00).
The above definition shall be subject to review and upward adjustment by the
SMED Council, as mandated under Republic Act No. 6977, as amended by
Republic Act No. 8289.
For the purpose of the Act, “services” shall exclude those rendered by any
one, who is duly licensed by the government after having passed a government
licensure examination, in connection with the exercise of one’s profession.
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(b) “Certificate of Authority” is the certificate issued granting the authority
to the registered BMBE to operate and be entitled to the benefits and privileges
accorded thereto.
(c.) “Assets” refers to all kinds of properties, real or personal, owned by

the BMBE and used for the conduct of its business as defined by the SMED
Council: Provided, That for the purpose of exemption from taxes and fees
under the Act, this term shall mean all kinds of properties, real or personal,
owned and/or used by the BMBE for the conduct of its business as defined by
the SMED Council.
(d) “Registration” refers to the inclusion of BMBE in the BMBE Registry of

a city or municipality.
(e) “Financing” refers to all borrowings of the BMBE from all sources after
registration.
REGISTRATION AND OPERATION OF BMBEs
SEC. 4. Registration and Fees. – The Office of the Treasurer of each city
or municipality shall register the BMBEs and issue a Certificate of Authority to
enable the BMBE to avail of the benefits under this Act. Any such application
shall be processed within fifteen (15) working days upon submission of complete
documents. Otherwise, the BMBEs shall be deemed registered. The Municipal
or City Mayor may appoint a BMBE Registration Officer who shall be under
the Office of the Treasurer. Local government units (LGUs) are encouraged to
establish a One-Stop-Business Registration Center to handle the efficient
registration and processing of permits/licenses of BMBEs. Likewise, LGUs
shall make a periodic evaluation of the BMBEs’ financial status for monitoring
and reporting purposes.
The LGUs shall issue the Certificate of Authority promptly and free of
charge. However, to defray the administrative costs of registering and
monitoring the BMBEs, the LGUs may charge a fee not exceeding One
Thousand Pesos (P1, 000.00).
The Certificate of Authority shall be effective for a period of two (2) years,
renewable for a period of two (2) years for every renewal.
As much as possible, BMBEs shall be subject to minimal bureaucratic

requirements and reasonable fees and charges.
SEC. 5 Who are Eligible to Register. – Any person, natural or juridical, or

cooperative, or association, having the qualifications as defined in Section
3(a) hereof may apply for registration as BMBE.
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SEC. 6. Transfer of Ownership. – The BMBE shall report to the city or
municipality of any change in the status of its ownership structure, and shall
surrender the original copy of the BMBE Certificate of Authority for notation of
the transfer.
INCENTIVES AND BENEFITS
SEC. 7. Exemption from Taxes and Fees. – All BMBEs shall be exempt
from income tax for income arising from the operations of the enterprise.
The LGUs are encouraged either to reduce the amount of local taxes, fees
and charges imposed or to exempt the BMBEs from local taxes, fees and
charges.
SEC. 8. Exemption from the Coverage of the Minimum Wage Law. – The
BMBEs shall be exempt from the coverage of the Minimum Wage Law:
Provided, That all employees covered under this Act shall be entitled to the
same benefits given to any regular employee such as social security and
healthcare benefits.
SEC. 9. Credit Delivery. – Upon the approval of this Act, the Land Bank of
the Philippines (LBP), the Development Bank of the Philippines (DBP), the
Small Business Guarantee and Finance Corporation (SBGFC), and the People’s
Credit and Finance Corporation (PCFC) shall set up a special credit window
that will service the financing needs of BMBEs registered under this Act
consistent with the Bangko Sentral ng Pilipinas (BSP) policies, rules and
regulations. The Government Service Insurance System (GSIS) and Social
Security System (SSS) shall likewise set up a special credit window that will
serve the financing needs of their respective members who wish to establish a
BMBE. The concerned financial institutions (FIs) are encouraged to wholesale
the funds to accredited private financial institutions including community-based
organizations such as credit, cooperatives, non-government organizations
(NGOs) and people’s organizations, which will in turn, directly provide credit
support to BMBEs.
All loans from whatever sources granted to BMBEs under this Act shall be
considered as part of alternative compliance to Presidential Decree No. 717,
otherwise known as the Agri-Agra Law, or to Republic Act No. 6977, known as
the Magna Carta for Small and Medium Enterprises, as amended. For purposes
of compliance with Presidential Decree No. 717 and Republic Act No. 6977,
as amended, loans granted to BMBEs under this Act shall be computed at
twice the amount of the face value of the loans.
Any existing laws to the contrary notwithstanding, interests, commissions

and discounts derived from the loans by the LBP, DBP, PCFC and SBGFC
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granted to BMBEs as well as loans extended by the GSIS and SSS to their
respective member- employees under this Act shall be exempt from gross
receipts tax (GRT).
To minimize the risks in lending to the BBEs, the SBGFC and the Quedan
and Rural Credit Guarantee Corporation (QUEDANCOR) under the Department
of Agriculture, in case of agribusiness activities, shall set up a special guarantee
window to provide the necessary credit guarantee to BMBEs under their
respective guarantee programs.
The LBP, DBP, PCFC, SBGFC, SSS, GSIS, and QUEDANCOR shall
annually report to the appropriate Committees of both Houses of Congress on
the status of the implementation of this provision.
The BSP shall formulate the rules for the implementation of this provision
and shall likewise establish incentive programs to encourage and improve
credit delivery to the BMBEs.
SEC. 10. Technology Transfer, Production and Management Training, and

Marketing Assistance. – A BMBE Development Fund shall be set up with an
endowment of Three Hundred Million Pesos (P300, 000,000.00) from the
Philippine Amusement and Gaming Corporation (PAGCOR) and shall be
administered by the SMED Council.
The Department of Trade and Industry (DTI), the Department of Science

and Technology (DOST), the University of the Philippines Institute for Small
Scale Industries (UP ISSI), Cooperative Development Authority (CDA), Technical
Education and Skills Development Authority (TESDA), and Technology and
Livelihood Resource Center (TLRC) may avail of the said Fund for technology
transfer, production and management training and marketing assistance to
BMBEs.
The DTI, in coordination with the private sector and non-government

organizations (NGOs), shall explore the possibilities of linking or matching-up
BMBEs with small, medium and large enterprises, and likewise establish
incentives therefor.
The DTI, in behalf of the DOST, UP ISSI, CDA, TESDA and TLRC shall be
required to furnish the appropriate Committees of both Houses of Congress a
yearly report on the development and accomplishments of their projects and
programs in relation to technology transfer, production and management training
and marketing assistance extended to BMBEs.
SEC. 11. Trade and Investment Promotion. – The data gathered from
business registration shall be made accessible to and shall be utilized by
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private sector organizations and non-government organizations for purposes
of business matching, trade and investment promotion.
INFORMATION DISSEMINATION
SEC. 12. Information Dissemination. – The Philippine Information Agency

(PIA), in coordination with the Department of Labor and Employment (DOLE),
the DILG and the DTI, shall ensure the proper and adequate information
dissemination of the contents and benefits of this Act to the general public
especially to its intended beneficiaries specifically in the barangay level.
PENALTY
SEC. 13. Penalty. – Any person who shall willfully violate any provision of
this Act or who shall in any manner commit any act to defeat any provision of
this Act shall, upon conviction, be punished by a fine of not less than Twenty-
five Thousand Pesos (P25,000.00) but not more than Fifty Thousand Pesos
(P50,000.00) and suffer imprisonment of not less than six (6) months but not
more than two (2) years.
In case of non-compliance with the provisions of Section 9 of the Act, the

BSP shall impose administrative sanctions and other penalties on the concerned
government financial institutions, including a fine of not less than Five Hundred
MISCELLANEOUS PROVISIONS
SEC. 14. Annual Report. – The DILG, DTI, and BSP shall submit an annual
report to the Congress on the status of the implementation of the Act.
SEC. 15. Implementing Rules and Regulations. – The Secretary of the

Department of Trade and Industry, in consultation with the Secretaries of the
DILG, DOF, and the BSP Governor shall formulate the necessary rules and
regulations to implement the provisions of this Act within ninety (90) days after
its approval. The rules and regulations issued pursuant to this section shall
take effect fifteen (15) days after its publication in a newspaper of general
circulation.
SEC. 16. Separability Clause. - – If any provision or part hereof, is held

invalid or unconstitutional, the remainder of the law or the provision not otherwise
affected shall remain valid and subsisting.
SEC.17. Repealing Clause. – Existing laws, presidential decrees, executive

orders, proclamations or administrative regulations that are inconsistent with
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the provisions of this Act are hereby amended, modified, superseded or repealed
accordingly.
SEC. 18. Effectivity. – The Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general
circulation.
Approved,
(Sgd.) JOSE DE VENECIA JR. (Sgd.) FRANKLIN M. DRILON

Speaker of the House of Representative President of the Senate
This Act, which is a consolidation of Senate Bill No. 1855 and House Bill
No. 4871 was finally passed by the Senate and the House of Representatives
on October 24, 2002 and October 23, 2002, respectively.
(Sgd.) ROBERTO P. NAZARENO (Sgd.) OSCAR G. YABES

Secretary General House of Representatives Secretary of the Senate
Approved: November 13, 2002
(Sgd.) GLORIA MACAPAGAL-ARROYO

President of the Philippines
(Published in Manila Times & Today, November 19, 2002 and in the
Official Gazette January 27, 2003)
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DEPARTMENT ADMINISTRATIVE
ORDER NO. 01
Series of 2003.
SUBJECT: Implementing Rules and Regulations of R.A. 9178,

Otherwise known as the “Barangay Micro Business
Enterprises (BMBEs) Act of 2002”
Pursuant to Sec. 15 of R.A. 9178, otherwise known as the “Barangay

Micro Business Enterprises (BMBEs) Act of 2002”, and after consultation with
the Department of the Interior and Local Government (DILG), the Department
of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP), and other
concerned agencies, the following rules and regulations governing BMBEs are
hereby prescribed for the compliance, information and guidance of all
concerned.
I. PRELIMINARY PROVISIONS
Sec. 1. Declaration of Policy. – As stated in Sec. 2 of R.A. 9178, it is the

policy of the State to hasten the country’s economic development by
encouraging the formation and growth of barangay micro business enterprises
which effectively serve as seedbeds of Filipino entrepreneurial talents, and
integrating those in the informal sector with the mainstream economy, through
the rationalization of bureaucratic restrictions, the active intervention of the
government specially in the local level, and the granting of incentives and
benefits to generate much-needed employment and alleviate poverty.
Sec. 2. Definition of Terms. – When used herein, the term:
a. Act- shall refer to the “Barangay Micro Business Enterprises Act of

2002”.
b. Barangay Micro Business Enterprise (BMBE) – as defined in Sec.

3a of the Act, shall refer to any business entity or enterprise engaged
in the production, processing or manufacturing of products or
commodities, including agro-processing, trading and services, whose
total assets including those arising from loans but exclusive of the
land on which the particular business entity’s office, plant and
equipment are situated, shall not be more than Three Million Pesos
(P3,000,000.00) subject to review and upward adjustment by the
SMED Council, as mandated under Republic Act 6977, as amended
by Republic Act 8289. A BMBE shall include any individual owning
such business entity/enterprise, partnership, cooperative, corporation,
association or other entity incorporated and/or organized and existing
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under Philippine laws; and registered with the office of the treasurer of
a city or municipality in accordance with this implementing rules and
regulations.
“Services” shall exclude those rendered by any one, who is duly

licensed by the government after having passed a government licensure
examination, in connection with the exercise of one’s profession as
stated in Paragraph 2 Sec. 3(a), R.A. 9178.
c. Certificate of Authority (CA) – shall refer to the certificate issued to

an applicant authorizing the same to operate as a BMBE and to be
entitled to the benefits and privileges accorded to a registered BMBE.
d. Assets – shall refer to all kinds of properties, real or personal, owned

by the BMBE and used for the conduct of its business as defined by
the SMED Council: Provided, That for the purpose of exemption from
taxes and fees under the Act, this term shall mean all kinds of
properties, real or personal, owned and/or used by the BMBE for the
conduct of its business as defined by the SMED Council.
e. Registration – shall mean the inclusion of a BMBE in the BMBE

Registry of a city or municipality.
f. Financing – shall refer to all borrowings of the BMBE from all sources
after registration.
II. REGISTRATION OF BMBE
Sec. 3. Place of Registration. – The Office of the Treasurer of each city or

municipality shall register BMBEs and issue a Certificate of Authority (CA) to
enable the BMBE to avail of incentives under the Act; Provided, That only one
Certificate of Authority shall be issued for each BMBE and only by the Office
of the Treasurer of the city or municipality that has jurisdiction over the principal
place of business of the BMBE.
Sec. 4. Who are eligible to register. – Any person, natural or juridical,

cooperative or association, having the qualifications herein below enumerated,
may apply for registration as BMBE:
a. Have an asset size of not more than three million pesos (P3,000,000.00)
excluding land, before applying for BMBE registration; and
b. Engaged in the business activities as defined in Sec. 2(b) of this IRR.
Sec. 5. Requirements for Registration. The applicant for BMBE

registration shall submit the duly filled up application (BMBE Form 01) in
triplicate, signed by the owner or manager of the entity applying for registration.
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Sec. 6. Procedures for Registration. The following are the procedures
when applying for registration as BMBE:
a. An applicant for BMBE shall go to the Office of the Municipal or City

Treasurer where the business is located;
b. The applicant shall accomplish BMBE Form 01 in triplicate and submit

to the Office of the Municipal or City Treasurer;
c. The Municipal or City Treasurer evaluates the application. Application

shall be processed within fifteen (15) working days upon submission
of complete documents. Otherwise, the BMBEs shall be deemed
registered; and
d. A registered BMBE shall be issued a CA as proof of registration,

which will be effective for a period of two (2) years, renewable for a
period of two (2) years for every renewal.
Sec. 7. Fees and Charges. – The LGUs shall issue the CA promptly and
free of charge. However, to defray the administrative costs of registering and
monitoring the BMBEs, the LGU may charge a fee not exceeding One Thousand
Pesos (P1,000.00).
Sec. 8. Transfer of Ownership. – The BMBE shall report to the city or

municipality of any change in the status of its ownership structure, and shall
surrender the original copy of the BMBE Certificate of Authority for notation of
the transfer.
III. INCENTIVES AND BENEFITS
Sec. 9. Exemption from taxes and fees. – All BMBEs shall be exempted
from income tax for income arising from the operation of the enterprise.
The Local Government Units (LGUs) are encouraged either to reduce the
amount of local taxes, fees and charges imposed or to exempt the BMBE
from local taxes, fees and charges.
Sec. 10. Exemption from the Coverage of the Minimum Wage Law. – The
BMBEs shall be exempt from the coverage of the Minimum Wage Law:
Provided, That all employees covered under the Act shall be entitled to the
same benefits given to any regular employee such as social security and
healthcare benefits.
Sec. 11. Credit Delivery. – As stated in Sec. 9 of the Act, the Land Bank
of the Philippines (LBP), the Development Bank of the Philippines (DBP),
Small Business Guarantee and Finance Corporation (SBGFC), and People’s
16
Credit and Finance Corporation (PCFC) shall set up a special credit window
that will service the financing needs of BMBEs registered under the Act
consistent with the BSP policies, rules and regulations. The Government Service
Insurance System (GSIS) and Social Security System (SSS) shall likewise
set up a special credit window that will serve the financing needs of their
respective members who wish to establish a BMBE. The concerned financial
institutions (FIs) are encouraged to wholesale the funds to accredited private
financial institutions including community-based organizations such as
cooperatives, non-government organizations (NGOs) and people’s
organizations, which will in turn, directly provide credit support to BMBEs.
All loans from whatever sources granted to BMBEs under the Act shall be
considered as part of alternative compliance to Presidential Decree No. 717,
otherwise known as the Agri-Agra Law, or to Republic Act No. 6977, otherwise
known as the Magna Carta for Small and Medium Enterprises, as amended.
For purposes of compliance with Presidential Decree No. 717 and Republic
Act No. 6977, as amended, loans granted to BMBEs under the Act shall be
computed at twice the amount of the face value of the loans.
Any existing laws to the contrary notwithstanding, interests, commissions

and discounts derived from the loans by the LBP, DBP, PCFC and SBGFC
granted to BMBEs as well as loans extended by the GSIS and SSS to their
respective member- employees under the Act shall be exempt from gross
receipts tax (GRT).
To minimize the risks in lending to the BMBEs, the SBGFC and the Quedan
and Rural Credit Guarantee Corporation (QUEDANCOR) under the Department
of Agriculture, in case of agribusiness activities, shall set up a special guarantee
window to provide the necessary credit guarantee to BMBEs under their
respective guarantee programs.
The LBP, DBP, PCFC, SBGFC, SSS, GSIS, and QUEDANCOR shall
annually report to the appropriate Committees of both Houses of Congress on
the status of the implementation of this provision.
The BSP shall formulate the rules for the implementation of this provision
and shall likewise establish incentive programs to encourage and improve
credit delivery to the BMBEs.
Sec. 12. Technology Transfer, Production and Management Training, and

Marketing Assistance. – BMBEs can avail of technology transfer, production,
management training programs and marketing assistance of the DTI, DOST,
UP-ISSI, CDA, TESDA, TLRC and other concerned agencies.
17
Sec. 13. BMBE Development Fund. – As stated in Sec. 10 of the Act, a
BMBE Development Fund shall be set up with an endowment of Three Hundred
Million Pesos (P300, 000,000.00) from the PAGCOR and shall be administered
by the SMED Council.
The DTI, DOST, UP ISSI, CDA, TESDA, and TLRC may avail of the said
Fund for technology transfer, production and management training and marketing
assistance to BMBEs.
Sec. 14. Trade and Investment Promotion. – The data gathered from
business registration shall be made accessible to and shall be utilized by
private sector organizations and non-government organizations for purposes
of business matching, trade and investment promotion.
Sec. 15. One-Stop Business Registration Center. – LGUs are encouraged

to establish a One- Stop Business Registration to handle the efficient registration
and processing of permits/licenses of BMBEs.
IV. INFORMATION DISSEMINATION
Sec. 16. Information Dissemination. – The Philippine Information Agency

(PIA) in coordination with the concerned agencies (DOLE, the DILG, and the
DTI) shall ensure the proper and adequate information dissemination of the
contents and benefits of the Act to the general public especially to its intended
beneficiaries in the barangay level.
V. PENALTY
Sec. 17. Penalty. – Any person who shall willfully violate any provision of
the Act or who shall in any manner commit any act to defeat any provision of
the Act shall, upon conviction, be punished by a fine of not less than Twenty-
five Thousand Pesos (P25, 000.00) but not more than Fifty Thousand Pesos
(P50, 000.00) and suffer imprisonment of not less than six (6) months but not
more than two (2) years.
In case of non-compliance with the provisions of Section 9 of the Act, the

BSP shall impose administrative sanctions and other penalties on the concerned
government financial institutions, including a fine of not less than Five Hundred
VI. MISCELLANEOUS PROVISIONS
Sec. 18. Annual Report. – The DILG, DTI, and BSP shall submit Annual
Reports to Congress on the status of the implementation of the Act.
18
Sec. 19. Effectivity. – These rules shall take effect fifteen (15) days after
its publication in a newspaper of general circulation.
APPROVED: 07 February 2003.
Secretary of Trade and Industry
(Published in Manila Bulletin February 11 and 26, 2003)
19
APPLICATIONFORREG
APP EGIIST
STR RATIONA S
AS
BARANGAYMICROBU
BAR BUSSINESSE NTE
EN TERRPRISES
BMBE
UNDERR.A.9178
PASSPORT SIZE
BMBE Form 01 To be accomplished in triplicate ID PICTURE OF
OWNER/HEAD
Date Application Filed:_______ OF BUSINESS
ENTERPRISE
Application No.____________
New Renewal
Name of Business Enterprises
Name of Owner or Head of Enterprise
_______________________________________________________ Male Female
(Last Name) (First Name) (Middle Name)
Business Address __________________________________ Tel. No.:________________
________________________________________________ Fax. No.:_______________
Owner’s Business’ Tax Identification Number ______________________________
E
Type of Business Organization Single Propriertorship Partneship Corporation Cooperative
Association Others____________
L
Status of Business New Existing
Principal Business Activity Production Processing Manufacturing Trading

Services Others____________
Partners/Directos/Officers
M P
Product Lines/Services __________________________________________________________________________
Total Assets (To the Nearest Thousand Pesos) _______________________________________________________
Total Number of Employees__________ (No. of Males__________No. of Females_________
For Partnership Corporation/Cooperatves/Associations

Address
S A
Branches, if any
Address/es Tel. No.
I/We hereby declare that all information supplied in this application are true and correct to the best of my belief and
knowledge, and any false or misleading information supplied, or production of materially false or misleading
documents to support this application shall be a ground for the appropriate criminal, civil and/or administrative
action against our enterprise.
I/We undertake to advise the Office of the Treasure of the Municipality/City of any change in the status of its
structure and shall surrender the original copy of the BMBE Certificate of Authority for notation of the transfer.
________________________________
Applicant’s/Authorized Representative’s Signature
Over Printed Name
20
BMBE Form 02 BMBE Registration No._______
REPUBLICOFTHEPHILIPPINES
_______________________________
(City/Municipality)
BMBE Certificat
rtificatee ooff Authorit
Au y
rity
(Registered Barangay Micro Business Enterprises)
THIS CERTIFICATE, which is effective for two (2) years, entitles the registered
L E
Barangay Micro Business Enterprises (BMBE) to all benefits and incentives, subject
to the terms and conditions, of Republic Act No. 9178, signed by President Gloria
Macapagal-Arroyo on 13 November 2002, and the implementing rules and regulations
thereof issued by Secretary of Trade and Industry Mar Roxas on 07 February 2003.
P
This certificate will expire on__________.
M
Granted to:
______________________________________
A
Name of Enterprise
S Owner/Manager:
Address:
_________________________
_________________________
_________________________
IN TESTIMONY WHEREOF, I have set my hand and caused the seal

of the Municipality/City to be affixed at __________ this_________day of
________________in the year of our Lord, twenty hundred and_______.
________________________________
City/Municipal Treasurer
Attested:
______________
Mayor
21
Republic of the Philippines
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Vito Cruz, Manila
Department Order No. 17-04
GUIDELINES TO IMPLEMENT THE REGISTRATION OF BARANGAY

MICRO BUSINESS ENTERPRISES AND THE AVAILMENT OF TAX
INCENTIVES UNDER R.A. 9178, OTHERWISE KNOWN AS THE
“BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs)
ACT OF 2002”
RULE 1.
PRELIMINARY PROVISIONS
Section 1. Declaration of Policy. As stated in Section 2 of R.A. 9178

(the “Act”). it is the policy of the State to hasten the country’s economic
development by encouraging the formation and growth of barangay micro
business enterprises which effectively serve as seedbeds of Filipino
entrepreneurial talents, and integrating those in the informal sector with the
mainstream economy, through the rationalization of bureaucratic restrictions,
the active intervention of the government specially in the local level, and the
granting of incentives and benefits to generate much-needed employment and
alleviate poverty.
Sec. 2. Supplementary Rules and Regulations. Pursuant to Section 15

of the Act, the Secretary of Trade and Industry issued Department Administrative
Order No. 01, Series of 2003, prescribing the Rules and Regulations
Implementing the Act (the “Implementing Rules”). Among others, the
Implementing Rules provide:
“Sec. 3. Place of Registration. – The Office of the Treasurer of each City

or Municipality shall register BMBEs and issue a Certificate of Authority (CA)
to enable the BMBE to avail of incentives under the Act; Provided that only
one Certificate of Authority shall be issued for each BMBE and only by the
Office of the Treasurer of the City or Municipality that has jurisdiction over the
principal place of business of the BMBE.”
x x x
“Sec. 9. Exemption From Taxes and Fees. – All BMBEs shall be exempted
from income tax for income arising from the operation of the enterprise.”
Interest, commissions and discounts derived from the loans by the Land
Bank of the Philippines (LBP), Development Bank of the Philippines (DBP),
22
People’s Credit and Finance Corporation (PCFC) and Small Business
Guarantee and Finance Corporation (SBGFC) granted to BMBEs as well as
loans extended by the Government Service Insurance System (GSIS) and
Social Security System (SSS) to their respective member-employees under
the Act shall also be exempt from gross receipts tax (“GRT”).
Sec. 3. Objective. The Office of the Treasurer and the Bureau of Internal
Revenue are under the supervisory authority of the Department of Finance.
Accordingly, this Department Order is hereby issued to provide guidelines and
procedures in:
(a) The registration of barangay micro business enterprises (BMBEs) by

the Office of the Treasurer of each city or municipality and the issuance
of a Certificate of Authority;
(b) The periodic evaluation of the BMBEs’ financial status for monitoring
and reporting purposes;
(c) The exemption from income tax of BMBEs for income arising from the
operations of the enterprise; and
(d) The exemption from gross receipts tax (GRT) of interests, commissions
and discounts derived from the loans by the LBP, DBP, PCFC and
SBGFC granted to BMBEs as well as loans extended by the GSIS
and SSS to their respective member-employees who wish to establish
BMBEs.
RULE 2.
REGISTRATION OF BMBEs
Sec.1. Who Can Register as a BMBE – One can register as a BMBE if it

is a business entity or enterprise, whether operated as a sole proprietorship or
a corporation, partnership, cooperative or association, organized/incorporated
and existing under Philippine laws:
(a) Engaged in the production, processing or manufacturing of products

or commodities, including agro-processing, trading and services, and
which activities are barangay-based and micro-business in nature and
scope: Provided, That “services” shall exclude those rendered by (i)
natural persons who are duly licensed by the government after having
passed a government licensure examination in connection with the
exercise of one’s profession, and (ii) juridical persons such as
partnerships or corporations engaged in consultancy, advisory and
similar services where the performance of such services are essentially
carried out through licensed professionals; and
23
(b) Whose total assets, real or personal, inclusive of those arising from
loans but exclusive of the land on which the particular business entity’s
office, plant and equipment are situated, shall not be more than Three
Million Pesos (P3,000,000.00) or as may be adjusted by the Small
and Medium Enterprises Development (SMED) Council as mandated
under R.A. 6977 as amended by R.A. 8289: Provided, That for the
purpose of registering as a BMBE, the assets must be owned and
used for the conduct of its business as such BMBE.
A business enterprise shall be considered “barangay-based” if (i) the

majority of its employees are residents of the municipality where its principal
place of business is located; or (ii) its principal activity consists in the
application/use of a particular skill peculiar to the locality or of raw materials
predominantly sourced from the area; or (iii) its business operations are confined
within the territorial jurisdiction of the municipality or LGU in which its principal
place of business is located: Provided, however, That the enterprise may
establish warehouses, buying stations, sales outlets, and booking or
administrative offices anywhere in the Philippines, subject to pertinent rules
and registration requirements of the concerned LGUs and other government
agencies where such warehouses, outlets, stations or offices are established.
It shall be considered “micro-business in nature and scope” if: (i) its principal
activity is primarily for livelihood, or determined by the SMED Council or DTI
as a priority area for development or government assistance; (ii) the enterprise
is not a branch, subsidiary, division or office of a large scale enterprise; and
(iii) its policies and business modus operandi are not determined by a large
scale enterprise or by persons who are not owners or employees of the
enterprise.
Sec. 2. Valuation of Assets – Cash consisting of Philippine currency

shall be valued at actual currency value; if in foreign currency, it shall be valued
at the official exchange rate as prescribed by the Bangko Sentral ng Pilipinas.
Other assets shall be generally valued at acquisition or historical cost, net of
a reasonable amount for depreciation as determined under GAAP if the asset
is depreciable, or book value, whichever is higher. Real property shall be
valued at acquisition cost, net of depreciation; however, if no sufficient proof is
submitted as to its acquisition cost, the same shall be valued at current zonal
value as established by the BIR.
Sec. 3. Documents to be Submitted by the Applicant-Business Entity or

Enterprise – To determine the value of the assets of the business entity or
enterprise applying for registration as a BMBE, the Office of the City or Municipal
Treasurer shall require the submission of the following documents, together
with the duly-accomplished Application for Registration or BMBE Form 01:
24
(a) For a new applicant:
1. Registration as a business entity or enterprise from the appropriate

government agency [e.g., Securities and Exchange Commission (SEC)
registration in the case of corporation, partnership or association; or
Cooperatives Development Authority (CDA) registration in the case of
cooperative; Department of Trade and Industry (DTI) business name
registration in the case of sole proprietorship)];
2. Taxpayer Identification Number (TIN);
3. Certificate of Registration from the Bureau of Internal Revenue (BIR);
4. Mayor’s Permit or City/Municipal Business Permit;
5. Sworn affidavit executed by the sole proprietor or the President of the

enterprise, as the case may be, that the enterprise is barangay-based
and micro-business in nature and scope, in substantially the form
attached as Annex “A”;
6. Sworn Statement of Assets and Liabilities showing the values of assets

owned and to be used in the conduct of business, which shall be
supported by pertinent information such as the date of acquisition,
acquisition cost and depreciated value. In case of asset acquired during
the year of registration, it shall be supported by any of the following:
I) invoice
II) official receipt
III) contract document or deed
7. Pictures of the place of business and its assets, other than cash,
receivables and intangibles;
8. Copy of Loan Contract/s, if any, and Duly-Notarized Certification of

Amortization Payments on the Loan; and
9. Income Tax Return (ITR) with proof that it has been duly filed with the
BIR, including attachments, if any, (for an existing business only).
(b) For renewal of registration:
1. Documents listed in Section 3(a)(1) to (8), inclusive; and
2. Annual Information Return (for the year immediately preceding the

renewal of registration) duly filed with the BIR, together with its
attachments.
25
The application for registration shall not be processed by the Office
of the Treasurer until all documentary requirements as above set
forth have been submitted.
Sec. 4. Verification of Qualifications. – The City or Municipal Treasurer

must conduct a verification of the physical existence of the business and the
true amount of its assets. A sworn certification that such a verification has
been conducted shall be executed by the Treasurer and shall form part of the
records of each application for registration.
Sec. 5. Issuance of Certification of Authority – After determining the

eligibility of the business entity or enterprise, the Office of the City or Municipal
Treasurer shall register the business entity or enterprise as a BMBE and
issue a Certificate of Authority using BMBE Form 02. The CA shall be effective
for a period of two (2) years, subject, however, to Sec. 8 of this Rule, and
renewable for a period of two (2) years for every renewal. The Treasurer shall
indicate in the CA the date when the registration of the BMBE commences.
The Office of the Treasurer shall issue the CA promptly and free of charge,
unless a fee therefore, not exceeding One Thousand Pesos (P1,000.00), is
imposed by the LGU concerned through a properly enacted ordinance.
Sec. 6. List of Registered BMBEs to be Furnished to the BIR. – The

Office of the City or Municipal Treasurer shall furnish the Revenue District
Officer/s of the Bureau of Internal Revenue (BIR) in the locality concerned, on
a quarterly basis, using a form prescribed by the Bureau, a list of all registered
BMBEs of good standing. The List of Registered BMBEs shall be one of the
bases of the BIR in granting income tax exemption to a BMBE.
Sec. 7. Periodic Evaluation – The Office of the City or Municipal Treasurer

shall conduct an evaluation and verification of the BMBE’s financial status,
including the actual amount and condition of its assets, for monitoring and
reporting purposes within 30 days from the close of the year after a BMBE’s
initial registration, and within 30 days from the close of each ensuing year.
The evaluation and verification of the BMBE’s financial condition shall include,
but not be limited to, the conduct of ocular inspection of the place of business
including its assets.
The respective officials of the City or Municipal Treasurer conducting the

verification must have written authority from the City or Municipal Treasurer.
The written authority should include, among others, the name of the official/s
who will conduct the verification, the address of the place of business to be
verified, and the duration of the written authority, which should not exceed a
period of one week from the date of its issuance.
26
Sec. 8. Cancellation of Registration – The Office of the City or Municipal
Treasurer shall cancel the registration of a BMBE for cause, such as:
(a) When the BMBE transfers its place of business to another locality;
(b) When the value of its total assets as determined pursuant to this
Order exceeds Three Million Pesos (P3,000,000.00);
(c) When the BMBE voluntarily surrenders its Certificate of Authority to

the Office of the City or Municipal Treasurer;
(d) In case of death of the registered individual owner of the BMBE, if it is

a sole proprietorship;
(e) In case of violation or non-compliance with the provisions of R.A. 9178,

the Implementing Rules and this Order;
(f) In case of merger or consolidation with an entity which is not eligible

to be a BMBE;
(g) In case of sale or transfer of the BMBE, if it is a sole proprietorship,

without prejudice to the transferee applying for registration should it
be qualified under the terms of this Order;
(h) Submission of fake or false or falsified documents;
(i) In case of retirement from business, or cessation/suspension of

operations for one year; and
(j) Making false or omitting required declarations or statements.
In cases of (a) violation or non-compliance with the provisions of R.A.

9178, (b) submission of fake or falsified documents, and/or (c) making false or
omitting required declarations or statements, the City or Municipal Treasurer
should initiate the filing of appropriate criminal complaints before the Office of
the Public Prosecutor.
In a cancellation of registration, the BMBE shall surrender its Certificate

of Authority to the Treasurer.
The Treasurer shall immediately notify the BIR of any cancellation of

registration of BMBE.
Sec. 9. Special Window – The Office of the City or Municipal Treasurer is

hereby directed to provide and clearly identify a special window or desk where
applications for registration as BMBEs should be filed.
27
RULE 3.
GUIDELINES IN THE AVAILMENT OF INCOME TAX EXEMPTION
Sec. 1. Exemption from Income Tax – A duly registered BMBE shall be

exempt from income tax on income arising purely from its operations as such
BMBE: Provided, That this income tax exemption shall not apply to the
following:
(a) Interest, including those from any currency bank deposit and yield or
any other monetary benefit from deposit substitutes and from trust
funds and similar arrangements;
(b) Royalties;
(c) Prizes and other winnings;
(d) Cash and/or property dividends;
(e) Capital gains from the sale of shares of stock not traded through the
stock exchange;
(f) Capital gains from the sale or other disposition of real property;
(g) The share of an individual in the net income after tax of an association,
a joint account, or a joint venture or consortium;
(h) The share of an individual in the distributable net income after tax of a
taxable partnership of which he is a partner;
(i) Income from the practice of profession received directly from the clients
or from the professional partnership of which the individual is a partner;
(j) Compensation; and
(k) All other forms of passive income and income from revenues not
effectively connected with or arising from operations of the BMBEs
as such.
Sec. 2. Determination of the Value of Assets of the BMBE for Income

Tax Exemption Purposes – For the purpose of exemption from income tax, the
total assets of the BMBE, which shall not exceed Three Million Pesos
(P3,000,000.00), shall include all kinds of properties, both personal properties
and real properties (but excluding land on which the particular business entity’s
office, plant and equipment are situated) that are owned and used/to be used
or even if not owned but used /to be used, by the BMBE and/or its affiliates for
28
the conduct of its/their business/es: Provided, That the term ”affiliate” shall
refer to any person or business enterprise/entity that, directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the BMBE concerned. The rules provided in Sec. 36 (B)
of the National Internal Revenue Code shall be used in determining whether
such affiliation exists, and the rules prescribed in Sec. 127 (B) of the same
Code for stock attribution shall be used in determining beneficial ownership of
an incorporated enterprise: Provided, further, That the value of the assets of
the BMBE for the purpose of this Section shall be determined in accordance
with the valuation rules set forth in Rule 2, Sec. 2 hereof.
Sec. 3. Availment of Tax Incentives. – For purposes of availing of the tax

incentives, the BMBE shall register as such BMBE with the BIR RDO where
the principal office or place of business of the BMBE is located. Its application
for registration shall be supported by the following documents:
a) Copy of the BMBE’s Certificate of Authority duly authenticated by the

Office of the City or Municipal Treasurer;
b) Sworn Statement of the values of assets owned and/or used/to be

used by the BMBE and/or its affiliates reflecting the current values
thereof. The Sworn Statement shall be supported by pertinent
information and documents such as:
1) Acquisition cost, date of acquisition and depreciated value for

existing assets
2) Invoices and/or official receipts for newly-acquired assets not yet

depreciated
3) Duly-notarized copy of Contract of Lease for assets used in the

conduct of business covered by lease agreement; and
4) Copy of Loan Contract/s, if any, and Duly-Notarized Certification

of Amortization Payments on the Loan
c) Certified list of branches, sales oulets, places of production, warehouse

and storage places, or such other facility owned and/or operated by
the BMBE indicating their respective addresses, whether located in
the same municipality or city where the principal place of business is
located, or elsewhere.
d) Certified list of affiliates, indicating addresses, line of business and

responsible officers thereof;
29
e) Latest Audited Financial Statement, or Account Information Form or
its equivalent containing data lifted from audited financial statements.
If the BMBE is currently registered with the BIR under or pursuant to

existing registration rules and regulations, its registration as a BMBE shall be
duly recorded by the BIR in the pertinent registration file of the BMBE, and its
registration certificate be accordingly amended to reflect its registration likewise
as a BMBE. If the BMBE has not been registered under or pursuant to existing
registration, the BMBE shall register for each type of internal revenue tax,
except income tax, but including withholding taxes for which it is liable.
For purposes of exemption from the creditable withholding tax on income

payments, the BMBE shall furnish its customers with a certificate true copy of
its amended BIR registration certificate.
If a BMBE is also entitled to exemption from income tax under any law
other than the Act, it shall so state this fact in its registration form and indicate
whether it shall avail itself thereof or the privilege under the Act. The choice so
made shall bind the BMBE for the entire period of validity of its registration
with the BIR. No BMBE shall be allowed double or multiple availment of
income tax exemption privileges.
An annual registration fee in the amount of Five Hundred Pesos (P500.00)

shall be paid by a BMBE upon its registration as such, and every year thereafter
on or before the last day of January: Provided, however, That a BMBE which
is in the form of a cooperative or a marginal income earner as defined in Revenue
Regulation No. 11-2000 shall be exempt from payment of this registration fee.
The registration fee shall be paid to an authorized agent bank (AAB) located
within the revenue district or, in places where there are no AABs, to the Revenue
Collection Officer (RCO), or duly authorized Treasurer of the City or Municipality
where the principal place of business is registered.
Sec. 4. Filing of Annual Information Return –
(a) Requirements. – Every BMBE entitled to full income tax exemption

is required to file an Annual Information Return, together with an Account
Information Form, or its equivalent, containing data lifted from audited
financial statements and a sworn statement of assets owned and/or
used in business.
(b) Where to File. – Except in cases where the Commissioner otherwise

permits, the return shall be filed with the Revenue District Officer or
the Revenue Collection Officer or the duly authorized Treasurer of the
city or municipality in which the BMBE has its principal place of
business.
30
(c) When to File. – The Return specified above shall be filed on or before
the fifteenth (15th) day of the fourth month following the close of the
taxable year.
Sec. 5. Revocation of Income Tax Exemption Privilege – The BIR shall

revoke the income tax exemption privilege of a BMBE for any of the causes
set forth in Rule 2, Sec. 8 hereof. The BIR shall notify the BMBE in writing of
its findings and require it to pay the corresponding income tax, without prejudice
to the filing of administrative or criminal complaints if warranted.
The BIR shall notify the Office of the City or Municipal Treasurer concerned
of its action, whereupon the City or Municipal Treasurer shall make a
determination within fifteen days from receipt of the BIR’s notice, whether the
BMBE’s Certificate of Registration issued by the Treasurer must likewise be
cancelled.
Sec. 6. Applicability of Other Internal Revenue Taxes and Compliance

Requirements. – A BMBE shall be subject to all other taxes and compliance
requirements prescribed under the National Internal Revenue Code (NIRC) of
1997, as amended, and its implementing rules and regulations. It shall also
update its registration information/status with the BIR in case it or any of its
affiliates transfers its principal place of business, any other offices, or branches.
RULE 4.
GUIDELINES ON THE AVAILMENT OF EXEMPTION
FROM GROSS RECEIPTS TAX
Sec. 1. Exemption from Gross Receipts Tax - Interests, commissions

and discounts derived from the loans granted by the LBP, DBP, PCFC AND
SBGFC to duly-registered BMBEs, as well as loans extended by the GSIS
and SSS to their respective member-employees for the purpose of establishing
BMBEs, shall be exempt from gross receipts tax (GRT).
Sec. 2. Disqualification from GRT Exemption. In case the amount of loan

extended by the above-mentioned credit institution/s to a BMBE borrower
resulted to the BMBE’s total assets exceeding the P3 million asset threshold,
the said institution/s is/are disqualified to enjoy exemption from GRT.
Sec. 3. Reportorial and Documentary Requirements – To avail of the

exemption, certified copy of the BMBE’s registration with the BIR as such
BMBE shall be submitted to the lending institution concerned. The BIR shall
also devise a reporting scheme to be followed by all concerned credit institutions
on all loan transactions with BMBEs for purposes of availing the GRT exemption
within thirty (30) days from the effectivity of this Order.
31
RULE 5.
PUBLIC INFORMATION CAMPAIGN
Sec. 1. Conduct of Public Information Campaign - The Bureau of Internal

Revenue and all its Revenue Region and District Officers, the Bureau of Local
Government Finance and all its Regional Directors, all District Treasurers of
Metropolitan Manila, and all City and Municipal Treasurers are hereby instructed
to hold public information campaigns to inform the BMBEs in their respective
jurisdictions about the specific provisions of this Order immediately after the
signing of this Order and until the time for the filing of the 2003 income tax
returns in April 2004.
Thereafter, said officials are encouraged to hold public information drives

as deemed necessary in order to promote the objectives of the Act and this
Order.
The Implementing agencies are instructed to provide public information

desks to address queries regarding the BMBE Act of 2002.
In addition, the agencies should coordinate with one another in coming up

with a standard leaflet or brochure containing, among other information, the
basic features of the BMBE Act of 2002, frequently asked questions and
answers on the implementation thereof, and the flow of processing of documents
including the list of requirements for registration as a BMBE.
RULE 6.
FINAL PROVISIONS
Sec. 1. Repealing Clause – All existing rules and regulations or parts

thereof which are inconsistent with the provisions of this Order are hereby
repealed, modified or amended accordingly.
Sec. 2. Reports – The Treasurers and the BIR shall strictly enforce the
provisions of this Order. They shall render an annual report to the Secretary of
Finance, copy furnished the Secretary of Trade and Industry, on their
implementation of the Act, conformably with this Order. Such report shall
contain, among others, the following:
(a) The names and addresses of BMBEs so accredited or registered for

the period; their line of business; their owners or stockholders, and
key officers: and their asset base;
(b) The amount of income for which exemption from income tax was availed
of;
(c) The amount of interest, commissions and discounts from which
exemption from the GRT was availed of; and
32
(d) The annual gross income derived by the BMBEs.
Sec. 3. Effectivity – This Order shall take effect after the 15th day following
its publication in a newspaper of general circulation.
Signed on this 20th day of April, 2004, Manila, Philippines.
(SGD) JUANITA D. AMATONG

Secretary of Finance
33
ANNEX A
REPUBLIC OF THE PHILIPPINES)
) S.S.
AFFIDAVIT
I, _______________________, (nationality), of legal age, with address at

______________________________________ after having been sworn in
accordance with law hereby depose and state:
1. I am the (sole proprietor/president) of (business name/corporate name)

which is duly registered with the (appropriate government agency) as being
involved in the (nature of business).
2. I hereby certify that (business name/corporate name) is “barangay –

based” and “micro – business” in nature and scope due to the following
reasons:
a) (business name/corporate name) is “barangay-based” because (cite
reasons why business is barangay –based e.g. (i) the majority of
employees are residents of the municipality where the principal place
of business is located; or (ii) the principal business activity consists
in the application/use of a particular skill peculiar to the locality or of
raw materials predominantly sourced from the area; or (iii) the business
operations are confined within the territorial jurisdiction of the
municipality or local government unit where principal place of business
is located); and
b) (business name/corporate name) is “micro business” in nature and

scope because its principal business activity is primarily for (livelihood
or as a priority area for development or government assistance as
determined by the SMED Council or the DTI); it is not a branch,
subsidiary, division or office of a large scale enterprise; and its policies
and business modus operandi are not determined by a large scale
enterprise or by persons who are not owners or employees of a large
scale enterprise.
3. I am executing this affidavit to attest to the truth of the foregoing and

for whatever legal purposes it may serve.
34
FURTHER AFFIANT SAYETH NAUGHT.
____________________________
Affiant
SUBSCRIBED AND SWORN to before me this _____ day of

__________________ 200_ affiant exhibiting to me his/her Community Tax
Certificate No. ____________issued at____________________on
___________________.
___________________________
NOTARY PUBLIC
Doc. No. ___;

Page No. ___;
Book No. ___;
Series of 200 ___.
35
Department of Finance
BUREAU OF INTERNAL REVENUE
Quezon City
May 26, 2004

REVENUE MEMORANDUM CIRCULAR NO. 40-2004
SUBJECT : Circularizing the full text of Department Order No. 17-

04 GUIDELINES TO IMPLEMENT THE REGISTRATION OF
BARANGAY MICRO BUSINESS ENTERPRISES AND THE
AVAILMENT OF TAX INCENTIVES UNDER R.A. 9178,
OTHERWISE KNOWN AS THE “BARANGAY MICRO
BUSINESS ENTERPRISES (BMBEs) ACT OF 2002”
TO : All Internal Revenue Officers, Employees and Others

Concerned
_______________________________________________________________
For the information and guidance of all internal revenue officers, employees
and others concerned, attached is the full text of Department Order No. 17-04
GUIDELINES TO IMPLEMENT THE REGISTRATION OF BARANGAY MICRO
BUSINESS ENTERPRISES AND THE AVAILMENT OF TAX INCENTIVES
UNDER R.A. 9178, OTHERWISE KNOWN AS THE “BARANGAY MICRO
BUSINESS ENTERPRISES (BMBEs) ACT OF 2002”.
All revenue officials and employees are enjoined to give this circular as
wide a publicity as possible.
(Sgd.) GUILLERMO L. PARAYNO

Commissioner of Internal Revenue
36
Department of Finance
BUREAU OF INTERNAL REVENUE
Quezon City
July 20, 2004
REVENUE MEMORANDUM CIRCULAR NO. 52- 2004
SUBJECT : Prescribing the Format of the Sworn Affidavit (Annex A)

of the Department Order No. 17-04 GUIDELINES TO
IMPLEMENT THE REGISTRATION OF BARANGAY MICRO
BUSINESS ENTERPRISES AND THE AVAILMENT OF TAX
INCENTIVES UNDER R.A. 9178, OTHERWISE KNOWN AS
THE “BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs)
ACT OF 2002”
TO : All Internal Revenue Officers, Employees and Others Concerned
For the information and guidance of all internal revenue officers, employees
and others concerned, attached is the Sworn Affidavit (Annex A) of Department
Order No. 17-04 GUIDELINES TO IMPLEMENT THE REGISTRATION OF
BARANGAY MICRO BUSINESS ENTERPRISES AND THE AVAILMENT OF
TAX INCENTIVES UNDER R.A. 9178, OTHERWISE KNOWN AS THE
“BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs) ACT OF 2002”. It
is referred to in Rule 2, Sec. 3(a) (5) as the form of the sworn affidavit to be
executed by the sole proprietor or the President of the enterprise, as the case
maybe that the applicant-enterprise is barangay- based and micro business in
nature and scope.
All revenue officials and employees are enjoined to give this circular as
wide as publicity as possible.
(Sgd.) GUILLERMO L. PARAYNO

Commissioner of Internal Revenue
37
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Vito Cruz, Manila
16 December 2005
Department Order No. 31-05
SIMPLYING THE DOCUMENTATION REQUIREMENT

FOR THE REGISTRATION OF BMBEs WITH ASSETS OF P300,000 OR
LESS, AMENDING FOR THE PURPOSE SECTION 3, RULE 2 OF
DEPARTMENT ORDER NO. 17-04 GOVERNING THE GUIDELINES TO
IMPLEMENT THE REGISTRATION OF BARANGAY MICRO BUSINESS
ENTERPRISES AND THE AVAILMENT OF TAX INCENTIVES
UNDER R.A. 9178.
SECTION 1. Section 3 of Rule of Department Order No. 17-04 is hereby

amended to read as follows:
“Sec. 3. Documents to be submitted by the Applicant-Business Entity or

Enterprise – To determine the value of the assets of the business entity or
enterprise applying for registration as a BMBE, the Office of the City of Municipal
Treasurer shall require the submission of the following documents, together
with the duly-accomplished Application for Registration or BMBE Form 01:
(a) FOR THOSE WITH ASSETS WORTH THREE HUNDRED THOUSAND

PESOS (P300,000) AND LESS –
(1) FOR A NEW APPLICANT:
i) REGISTRATION AS A BUSINESS ENTITY OR ENTERPRISE

FROM THE APPROPRIATE GOVERNMENT AGENCY (E.G.,
SECURITIES AND EXCHANGE COMMISSION (SEC)
REGISTRATION IN THE CASE OF CORPORATION,
PARTNERSHIP OR ASSOCIATION; COOPERATIVES
DEVELOPMENT AUTHORITY (CDA) REGISTRATION IN THE
CASE OF COOPERATIVE; DEPARTMENT OF TRADE AND
INDUSTRY (DTI) BUSINESS NAME REGISTRATION IN THE
CASE OF SOLE PROPRIETORSHIP); AND
ii) MAYOR’S PERMIT OR CITY/ MUNICIPAL BUSINESS

PERMIT.
38
(2) FOR RENEWAL OF REGISTRATION:
i) DOCUMENTS LISTED IN SECTIONS 3(a)(1)(i) TO (ii),

INCLUSIVE; AND
ii) ANNUAL INFORMATION RETURN (FOR THE YEAR

IMMEDIATELY PRECEDING THE RENEWAL OF
REGISTRATION) DULY FILED WITH THE BIR, TOGETHER
WITH ITS ATTACHMENTS).
(b) FOR THOSE WITH ASSETS WORTH MORE THAN THREE

HUNDRED THOUSAND PESOS (P300,000) UP TO THREE MILLION
PESOS (P3,000,000.00) -
[(a)] 1) For a new applicant:
[(1)] i) Registration as a business entity or enterprises from the

appropriate government agency [e.g., Securities and Exchange
Commission (SEC) registration in the case of corporation,
partnership or association; Cooperatives Development Authority
(CDA) registration in the case of cooperative; Department of Trade
and Industry (DTI) business name registration in the case of sole
proprietorship];
[2)] ii) Taxpayer identification Number (TIN);
[3)] iii) Certificate of Registration from the Bureau of Internal

Revenue (BIR);
[4)] iv) Mayor’s Permit or City/Municipal Business Permit;
[5)] v) Sworn affidavit executed by the sole proprietor or the

President of the enterprise, as the case may be, that the
enterprise is barangay-based and micro-business in nature and
scope, in substantially the form attached as Annex “A”;
[6)] vi) Sworn Statement of Assets and Liabilities showing the values
of assets owned and to be used in the conduct of business,
which shall be supported by pertinent information such as the
date of acquisition, acquisition cost and depreciated value. In
the case of asset acquired during the year of registration, it shall
be supported by any of the following:
[i)] vi).i) invoice

[ii)] vi.ii) official receipt
[iii)] vi.iii) contract document or deed
39
[7)] vii) Pictures of the place of business and its assets, other than
cash, receivables and intangibles;
[8)] viii) Copy of Loan Contract/s, if any, and Duly-Notarized Certification

of Amortization Payments on the load; and
[9] ix) Income Tax Return (ITR) with proof that it has been duly filed
with the BIR, including attachments, if any, (for an existing
business only).
[(b)] 2) For renewal of registration:

[1)] i) Documents listed in [Section 3(a)(1) to (8)] SECTION 3
(b)(1)(i) to (ix), inclusive; and
[2)]ii) Annual Information Return (for the year immediately
preceding the renewal of registration duly filed with the BIR,
together with its attachments.
The application for registration shall not be processed by the Office of the
Treasure until all documentary requirements as above set forth have been
submitted.
SEC. 2. This Order shall take effect after the 15th day following its publication
in a newspaper of general circulation.
Signed on this 20th day of December 2005, Manila, Philippines
(SGD) MARGARITO B. TEVES

Secretary of Finance
(Published in the December 22, 2005 issue of the Manila Standard)
40
DEPARTMENT OF LABOR AND EMPLOYMENT
Manila
Department Order No. 45-03 Series of 2003
Guidelines for the Implementation

of Section 8 of R.A. No. 9178
RA No. 9178, otherwise known as the Barangay Micro Business

Enterprises (BMBEs) Act of 2002, aims to hasten the country’s economic
development by encouraging the formation and growth of BMBEs through the
rationalization of bureaucratic requirements, the active support and assistance
of government specially in the local level, and the granting of incentives and
benefits to generate much-needed employment and alleviate poverty.
As defined in Section 31 of the Act, a BMBE shall refer to any business

entity or enterprise engaged in the production, processing or manufacturing of
products or commodities, including agro-processing, trading and services, whose
total assets including those arising from loans but exclusive of the land on
which the particular business entity’s office, plant and equipment are situated,
shall not be more than Three Million Pesos, subject to review and upward
adjustment by the SMED Council.
To operate as a BMBE and avail of the benefits provided by the Act, a

business enterprise must have a Certificate of Authority issued by the Office of
the Treasurer of the City or Municipality where the enterprise is located.
One of the incentives granted to registered BMBE is exemption from the

coverage of the Minimum Wage Law as provided under Section 8 of the Act.
This incentive, however, should be in harmony with the Constitution and the
Labor Code which mandate the State to regulate relations between workers
and employers and to protect workers from possible exploitation.
In order to ensure uniformity in the interpretation and implementation of

Section 8 of the Act, this Department Order is hereby issued for the proper
guidance and information of all concerned.
Section 1. Pursuant to Section 8 of RA No. 9178, BMBEs shall be exempt

from the coverage of the Minimum Wage Law: Provided, that all employees
covered under this Act shall be entitled to the same benefits given to any
regular employees such as social security and healthcare benefits.
Section 2. The Regional Tripartite Wages and Productivity Boards shall

issue a Wage Advisory for BMBEs based on guidelines to be issued by the
National Wages and Productivity Commission. The range of wage levels
41
proposed by the RTWPBs shall be advisory in nature, and may be used by
BMBE workers and employees in setting acceptable wage levels in their
enterprises.
Section 3. Workers in BMBEs shall continue to be covered by all applicable

labor laws and benefits under the Labor Code including the non-diminution of
wages.
Section 4. The DOLE in coordination with other government and private

agencies shall assist BMBEs by providing Technical Assistance Visits under
the DOLE’s National Labor Enforcement Framework. They shall also be given
preferential assistance in other DOLE programs and interventions, such as,
productivity, safety and health improvement, to help them grow and prosper
into small and medium enterprises.
Section 5. A DOLE Agency Committee on BMBEs composed of the

National Wages and Productivity Commission (lead agency), Technical
Education and Skills Development Authority, Bureau of Working Conditions,
Occupational Safety and Health Center, and Employees Compensation
Commission is hereby created to coordinate DOLE programs, for BMBEs.
Funding for the Committee shall be cost-shared by the member agencies.
Section 6. All rules and guidelines inconsistent herewith are hereby

repealed or modified accordingly.
Section 7. This guidelines shall take effect immediately after its publication
in a newspaper of general circulation.
(SGD) PATRICIA A. STO.TOMAS

Secretary
May 15, 2003
(Published in Philippine Star on May 24, 2003)
42
Department of Labor and Employment
NATIONAL WAGES AND PRODUCTIVITY
COMMISSION
NWPC Guidelines No. 01

Series of 2003
GUIDELINES ON THE ISSUANCE

OF WAGE ADVISORIES FOR
BARANGAY MICRO BUSINESS ENTERPRISES
Pursuant to Section 8 of RA No. 9178 and Section 2 of DOLE Department

Order No. 45-03, Series of 2003, the following guidelines are hereby adopted
for the proper guidance and information of all concerned.
Section 1. Rationale. RA No. 9178, known as the Barangay Micro

Business Enterprises (BMBEs) Act of 2002, aims to hasten the country’s
economic development and alleviate poverty by encouraging the formation and
growth of BMBEs through the rationalization of bureaucratic requirements, the
active support and assistance of government, and the granting of incentives
and benefits to generate employment.
One of the incentives granted to registered BMBEs is exemption from the

coverage of the Minimum Wage Law. The Constitution and the Labor Code,
however, mandate the State to regulate relations between workers and
employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns on investments,
and to expansion and growth. Guided by this Constitutional provision, the
workers and owners of BMBEs are encouraged to set the mutually acceptable
wage rates in their respective enterprises.
This Guidelines is intended to guide the Regional Tripartite Wages and

Productivity Boards (RTWPBs) in the issuance of Wage Advisories for BMBEs
that can assist workers and owners when they set mutually acceptable wage
levels and foster industrial peace and harmony.
Section 2. Definition of Terms. As used in this Guidelines:
(a) Barangay Micro Business Enterprise –hereinafter referred to as BMBE,

refers to any business entity or enterprise engaged in the production,
processing or manufacturing of products or commodities, including
agro-processing, trading and services, whose total assets including
those arising from loans but exclusive of land on which the particular
business entity’s office, plant and equipment are situated shall not be
more than Three Million Pesos (P3,000,000.00) subject to review and
43
upward adjustment by the SMED Council. A BMBE shall include any
individual owning such business entity/enterprise, partnership,
cooperative, corporation, association, or other entity incorporated and/
or organized and existing under Philippine laws, and registered with
the office of the treasurer of a city or municipality in accordance with
RA 9178.
“Services” shall exclude those rendered by anyone, who is duly

licensed by the government after having passed a government licensure
examination, in connection with the exercise of one’s profession.
(b) Acceptable Wage Rates – refer to the reasonable and agreed wage
rates set by the BMBE workers and owners taking into consideration
the Wage Advisories issued by the RTWPBs.
(c) Certificate of Authority – refer to the certificate issued to an applicant

authorizing the same to operate as a BMBE and to be entitled to the
benefits and privileges accorded to a registered BMBE.
Section 3. Guidelines.
A. Wage Advisories
1. Nature. The wage rates to be proposed in the Wage Advisories

shall be advisory and not mandatory in nature. They are intended
to exert a persuasive effect on BMBE owners and provide a
benchmark for workers. Nothing in this Guidelines or in the Wage
Advisories to be issued by the RTWPBs shall prevent workers
and employers of BMBEs from bargaining or negotiating for higher
wages and other benefits.
2. Compliance with Labor Laws and Regulations. The Wage

Advisories shall contain an express provision that, except for the
Minimum Wage, BMBE workers shall continue to be covered by
all other pertinent labor laws and regulations, including the non-
diminution of wages and the rights of workers to social and health
care benefits.
3. Criteria. In the determination of advisory wage rates of BMBEs,

the RTWPBs may consider factors which may significantly affect
BMBE workers and enterprises.
4. Applicable Wage Rate. To facilitate information dissemination

and awareness of concerned workers and employers, the RTWPBs
may propose a single wage rate applicable to all BMBEs in the
entire region.
44
B. Procedures in Setting Wage Advisories
1. The RTWPBs shall conduct studies of social and economic factors

that may affect BMBEs. In coordination with the DTI Regional
Offices, the RTWPBs shall maintain a data base of BMBEs with
valid Certificate of Authority.
2. The RTWPBs may enlist the assistance and cooperation of any

government agency or private person or organization to furnish
information in aid of its wage advisory function.
3. The RTWPBs shall conduct consultations / dialogues with affected

sectors, after which they shall decide on the merits of issuing a
Wage Advisory for BMBEs, and where appropriate, issue such
Wage Advisory within a reasonable period of time.
4. The RTWPBs shall disseminate to workers and owners of

registered BMBEs in their respective regions copies of their Wage
Advisories.
Section 4. Submission of Wage Advisories to the Commission. The

RTWPBs shall furnish the Commission copies of their Wage Advisories for
information and review.
Section 5. Counseling Assistance. Any issue that may arise in the

determination of acceptable wage rates in concerned BMBEs may be brought
by the workers and owners to the appropriate RTWPBs for counseling
assistance.
Section 6. Effectivity. This Guidelines shall take effect 15 days after its
publication in a newspaper of general circulation.
Manila, Philippines, October 20, 2003.
(SGD) PATRICIA A. STO. TOMAS (SGD) DAVID L. DIWA, JR.

Chairman
(SGD) ROMULO L. NERI (SGD) EDUARDO T. RONDAIN

Vice-Chairman Member
(SGD) CEDRIC R. BAGTAS (SGD) REBECCA J. CALZADO

Member Member
(SGD) FRANCISCO R. FLORO

Member
45
OFFICE OF THE GOVERNOR
Bangko Sentral ng Pilipinas
Circular No. 374

Series of 2003
Pursuant to Monetary Board Resolution No. 284 dated 27 February 2003,

the implementing rules and regulations of Section 9 and the second Paragraph
of Section 13 of R.A. No. 9178, otherwise known as the “Barangay Micro
Business Enterprises (BMBEs) Act of 2002” are hereby issued as follows:
Section 1. Credit Delivery – Pursuant to the provisions of Section 9 of

R.A. 9178, the Land Bank of the Philippines (LBP), the Development Bank of
the Philippines (DBP), the Small Business Guarantee and Finance Corporation
(SBGFC), and the Peoples Credit and Finance Corporation (PCFC) shall set
up a special credit window that will service the financing needs of duly registered
BMBEs consistent with BSP policies, rules and regulations. Said special
credit window shall service the credit needs of BMBEs either through retail or
wholesale lending, or both, as the concerned financial institutions may deem
consistent with their corporate policies and objectives. The Government Service
Insurance System (GSIS) and the Social Security System (SSS) shall likewise
set up special credit window that will serve the financing needs of their respective
members who may wish to establish a BMBE.
Said financial institutions are encouraged to wholesale funds to accredited

private financial institutions including community based organizations such
as cooperatives, non-government organizations (NGOs) and people’s
organizations engaged in granting credit, for relending to BMBEs.
Private banking and other financial institutions are hereby encouraged to

lend to BMBEs.
Section 2. Interest on loans to BMBEs – Interest on BMBE loans shall

be just and reasonable as may be determined by management of the concerned
entity to be consistent with its credit policies.
Section 3. Amortization of loans to BMBEs – The schedule of loan

amortization shall take into consideration the projected cash flow of the
borrowers. Thus, loans granted to BMBEs may, at the discretion of the lender,
be amortized daily, weekly, monthly or at such interval as the conditions of the
business of the BMBEs may warrant.
Section 4. Waiver of Documentary Requirements - Banks and other

financial institutions shall not require from duly registered BMBE borrowers
the submission of income tax returns as a condition to the grant of loans
46
considering that BMBEs are exempted from income tax for income arising
from their operations. They may, at their discretion, also waive the requirement
of submission of financial statements from BMBEs: Provided, That before
granting any loan, banks shall undertake reasonable measures to determine
that the borrower is capable of fulfilling his/its commitments.
Section 5. Incentives to Participating Financial Institutions – To encourage

BMBE lendings, the following incentives shall be granted to banks and other
financial institutions as may be applicable:
a. All loans from whatever sources granted to BMBEs under this Act
shall be considered as part of alternative compliance to Presidential
Decree No. 717 (Agri-Agra Law) or to Republic Act No. 6977, otherwise
known as the “Magna Carta for Small and Medium Enterprises”, as
amended. For purposes of compliance with Presidential Decree No.
717 and Republic Act No. 6977, as amended, loans granted to BMBEs
under R.A. No. 9178 shall be computed at twice the amount of the
outstanding balance of the loans: Provided, That loans used as
alternative compliance with PD 717 which were computed at twice
their outstanding balance shall no longer be eligible as compliance
with R.A. 6977 during the same period and vice versa: Provided,
further That said loans may be used as alternative compliance with
PD 717 and R.A. No. 6977, as amended at the same time at the
maximum amount of 100% of their outstanding balance: Provided,
still further, that funds loaned by government financial institutions to
accredited private banking and other financial institutions for relending
to BMBEs shall be eligible as part of alternative compliance to P.D.
717 or to R.A. No. 6977, as amended, at the maximum amount of
100% of their outstanding balance.
b. Any existing laws to the contrary notwithstanding, interests,

commission and discounts derived from the loans by the LBP, DBP,
PCFC, SBGFC granted to BMBEs as well as loans extended by the
GSIS and SSS to their respective member-employees under R.A.
No. 9178 and this Implementing Rules and Regulations shall be exempt
from gross receipt tax (GRT).
c. As an exception to the general moratorium on the establishment of

new banking offices, banks may, subject to compliance with applicable
BSP rules and regulations, also be allowed to establish branches
that will cater primarily to the credit needs of BMBEs: Provided, that
at least seventy percent (70%) of the deposits generated by said
branches shall be lent out to BMBEs and their outstanding loans to
BMBEs shall at all times be at least fifty percent (50%) of their gross
loan portfolio.
47
Section 6. Credit guarantee – The SBGFC and the Quedan and Rural
Credit Guarantee Corporation (Quedancor) under the Department of Agriculture,
in case of agri-business activities, shall set up a special guarantee window to
provide credit guarantee to BMBEs under their respective guarantee programs.
Section 7. Records – The LBP, DBP, PCFC and SBGFC shall maintain
separate records of loans granted to BMBEs and the GSIS and SSS shall
maintain records of loans extended to their respective members who wish to
establish BMBEs.
Section 8. Submission of Reports to BSP – Banks shall submit a quarterly

report on loans granted to BMBEs as attachment to the quarterly Report on
Compliance with the Mandatory Credit Allocation with Small and Medium
Enterprises and to the quarterly Report on the Utilization of Loanable Funds
Generated Which Were Set Aside for Agrarian Reform Credit/Agricultural Credit,
to the Supervisory Reports and Studies Office, within fifteen (15) banking days
after the end of each reference quarter (Annex “A” and “B”).
Section 9. Reports to Congress – As provided under Section 9 of R.A.

9178, the LBP, DBP, PCFC, SBGFC, SSS, GSIS and Quedancor shall report
annually to the appropriate Committees of both Houses of Congress the status
of their implementation of the provisions of Section 9 of R.A. No. 9178.
Section 10. Administrative sanctions – Pursuant to the provisions of the

second paragraph of Section 13 of R.A. No. 9178, any violation by the concerned
government financial institution of the provisions of Section 9 of said Act shall
be subject to a fine of not less than Five Hundred Thousand Pesos
(P500,000.00) to be imposed by the BSP and which shall be payable to the
BMBE Development Fund. In case of a banking institution, the foregoing fine
shall be without prejudice to the administrative sanctions provided for under
Section 37 of R.A. No. 7653 (The New Central Bank Act).
Section 11. Effectivity - This Circular shall take effect fifteen (15) days
after its publication in the Official Gazette or in at least two (2) newspapers of
general circulation.
FOR THE MONETARY BOARD:
(SGD) AMANDO M. TETANGCO, JR.

Officer-In-Charge
March 11, 2003
48
REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF THE INTERIOR
AND LOCAL GOVERNMENT
April 8, 2003
MEMORANDUM CIRCULAR
No. 2003-69
TO: ALL PROVINCIAL GOVERNORS, CITY/MUNICIPAL MAYORS,

DILG REGIONAL, PROVINCIAL,CITY DIRCTORS AND CITY/
MUNICIPAL LOCAL GOVERNMENT OPERATIONS OFFICERS
AND OTHER CONCERNED
SUBJECT: IMPLEMENTATION OF REPUBLIC ACT (R..A.) No. 9178

ENTITLED “AN ACT TO PROMOTE THE ESTABLISHMENT
OF BARANGAY MICRO BUISNESS ENTERPRISES (BMBEs)
PROVIDING INCENTIVES AND BENEFITS THEREFOR AND
FOR OTHER PURPOSES”
On November 13, 2002, Her Excellency President Gloria Macapagal-Arroyo

has signed into law Republic Act (R.A.) No. 9178 entitled “An Act To Promote
The Establishment Of Barangay Micro Business Enterprises (BMBEs) Providing
Incentives and Benefits Therefor And for Other Purposes” in line with the
government’s policy to hasten the country’s economic development by
encouraging the formation and growth of barangay micro-business enterprises.
The law seeks to establish BMBEs at the local level and to provide
incentives and benefits to generate the much-needed employment and alleviate
poverty that will hasten the country’s economic development. The implementing
Rules and Regulations of said R.A. was published on February 11 and 23
issue of the Manila Bulletin.
All Local Chief Executives (LCEs) are enjoined to ensure the full
implementation of said law by establishing a One-Stop Business Registration
Center in their areas to handle the efficient registration and processing of
permits and licenses of BMBEs. A Standard Registration Form and a Certificate
of Authority have been provided by DTI to be utilized for such purposes.
The DILG, in coordination with PIA, DOLE and DTI shall meet at the regional
level, to prepare an Action Plan to ensure proper dissemination of the law to
the general public, most especially the beneficiaries at the barangay level.
All DILG Regional Directors are hereby directed to cause its widest
dissemination in their region and furnish the following offices existing at the
regional level:
49
Department of Trade and Industry (DTI)
Department of Labor and Employment (DOLE)
Bangko Sentral ng Pilipinas (BSP)
Philippine Information Agency (PIA)
Philippine Amusement and Gaming Corporation (PAGCOR)
Government Service Insurance System (GSIS)
Social Security System (SSS)
Development Bank of the Philippines (DBP)
Land Bank of the Philippines (LBP)
People’s Credit and Financing Corporation (PCFC)
Small Business Guarantee and Finance Corporation (SBGFC)
The DILG Regional Offices are directed to submit a Semi-Annual Report

on the status of implementation of this law. The semi-annual report shall include
the list of approved/denied BMBE applications and shall also include the
Enterprise Location, Registration Date, Number of Employees, Assets and
other basic information.
All reports shall be submitted to the Office of the Secretary through the
Office of the Undersecretary for Local Governments. Said reports shall be the
bases for the submission by DILG and DTI of an Annual Report to Congress as
provided in Section 14 of said law.
For information, guidance and compliance.
(SGD) JOSE D. LINA, JR.

Secretary
Attested by:
(SGD) ATTY. ALLAN ROUELOM YAP

Head Executive Assistant
50
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT
August 23, 2003

MEMORANDUM
No. 2003- 172
TO : ALL PROVINCIAL GOVERNORS, CITY/ MUNICIPAL MAYORS,

DILG REGIONAL/PROVINCIAL/CITY DIRECTORS, CLGOOs,
MLGOOs, PROVINCIAL/CITY/ MUNICIPAL SANGGUNIANS
AND OTHER CONCERNED.
SUBJECT : CLARIFICATION ON THE IMPLEMENTATION OF SECTION 7

OF THE RULES AND REGULATIONS IMPLEMENTING R.A.
9178
Reference : Republic Act 9178, “An Act to Promote the Establishment

of Barangay Micro-Business Enterprises (BMBEs), Providing Incentives and
Benefits Therefore, and for other Purposes”.
The Department of Trade and Industry (DTI) has sought the assistance of
the Department on the implementation of the above-subject law at the city/
municipal levels, most particularly on the imposition of fees and charges on
the registration and monitoring of BMBEs, as provided in Section 7 of the
Rules and Regulations implementing R.A. 9178 which reads:
“Sec.7. Fees and Charges. – The LGUs shall issue the

Certificate of Authority (CA) promptly and free of charge. However,
to defray the administrative costs of registering and monitoring the
BMBEs, the LGU may charge a fee not exceeding One Thousand
Pesos (P1,000.00).”
The DTI, being the lead government agency tasked to implement the
mandate and objective of the said law, has brought to our attention the inaction
of some LGUs on the applications for CA as Barangay Micro-Business
Enterprises (BMBE) because of the absence of an enabling ordinance
implementing the law at the local levels. According to the DTI, neither the law
(R.A. 9178) nor its Implementing Rules and Regulations on the matter requires
or at least evinces a need for an enabling ordinance before qualified applicants
for BMBE can be entertained.
In view of the above, it is hereby clarified that as far as registration for

accreditation is concerned, an enabling ordinance is not prerequisite before
LGUs shall entertain applicants for CA under RA 9178. The Rules and
51
Regulations implementing R.A. 9178 has already detailed the procedures and
requirements for registration as BMBE.
Consistent with the settled principle that a national law prevails upon a
local legislation, local ordinances inconsistent with R.A. 9178, are deemed
amended or modified accordingly. Local Chief Executives, as well as their
respective local sanggunians, are hereby advised to be guided on the matter.
DILG Field Officers are hereby directed to monitor LGUs compliance with
the mandate and objective of the RA 9178 and its Implementing Rules and
Regulations.
For information, guidance and compliance.
(SGD.) JOSE D. LINA, JR.

Secretary
Attested by:
(SGD.) ATTY. ALAN ROULLO YAP

Head Executive Assistant
52
DEPARTMENT ADMINISTRATIVE ORDER NO. 02
Series of 2006
Subject: Implementing Guidelines for the Administration of the BMBE

Development Fund under Section 10 of Republic Act 9178,
otherwise known as the Barangay Micro Business Enterprises
Act of 2002.
The following guidelines, rules and regulations governing the effective and
proper administration and utilization of the BMBE Development Fund are hereby
prescribed and promulgated for the information, implementation and guidance
of all concerned:
Section 1. BMBE Development Fund. Pursuant to the provision of the

first paragraph of Section 10 of RA 9178, a BMBE Development Fund shall be
set up and to be administered by the SMED Council.
Section 2. Beneficiaries of the BMBE Development Fund. Pursuant to

the provision of the second paragraph of Section 10 of RA 9178, the following
government agencies may avail of the BMBE Development Funds so as to
execute projects related to technology transfer, production and management
training, and marketing assistance to BMBEs:
1. Department of Trade and Industry (DTI)

2. Department of Science and Technology (DOST)
3. University of the Philippines-Institute for Small Scale
Industries (UP-ISSI)
4. Cooperative Development Authority (CDA)
5. Technical Education and Skills Development Authority (TESDA)
6. Technology and Livelihood Resource Center (TLRC)
End beneficiaries of the BMBE Development Fund shall be BMBEs as

defined under section 3 of RA 9178.
Section 3. Qualified Projects. The following projects related to

technology transfer, production and management training, and marketing
assistance may qualify for funding under the BMBE Development Fund provided
that the same are not funded by the regular budget of the proponent agencies:
1. Entrepreneurship Development
2. Skills Training
3. Business Advisory Services
4. Technology Intervention
53
5. Technology Incubation/Commercialization
6. Policy Advocacy (activities and studies)
7. Database Development
8. Business Matching Activities
9. Trade Fairs and Missions
10. Other related activities that will benefit BMBEs
Section 4. Procedures in Availing of the BMBE Development Fund. The

following are the procedures for the availment of the BMBE Development Fund:
1. A beneficiary agency shall submit project proposals to the SMED

Council at least six months prior to the calendar year of target
implementation.
2. A Technical Working Group (TWG) composed of representatives from

BSP, NEDA, SBGFC, DOLE, and a representative from the SME
sector, as the head of the team, shall be created by the SMED Council
to pre-evaluate project proposals.
3. A point system based on merit shall be employed by the TWG in

prioritizing the project proposals which will be funded from the BMBE
Development Fund.
4. Project proposals must include the following information: project

name, proponent, responsible officials/designation, target beneficiaries,
employment to be created, existing funding agencies, deliverables,
total project cost, the reason for requesting financial assistance, and
the action taken by the concerned agency’s project screening
committee (Annex “A”).
5. The executing agency and the SMED Council shall enter into a
Memorandum of Agreement (MOA) before the transfer of approved
project funds can be effected (Annex “B”).
Section 5. Reporting System on the Fund Administration. The SMED

Council shall prepare annual accomplishment reports that will be submitted to
Congress and the Office of the President concerning the utilization of the
BMBE Development Fund.
The Small Business Guarantee and Finance Corporation (SB Corporation)

as the designated fund manager (per SMEDC Res. No. 7, Series of 2004
dated 29 October 2004), shall submit to the SMED Council semi-annual reports
(for period covering January-June and July-December) on the utilization and
status of the BMBE Development Fund, duly signed by the Chairman of the
SB Corporation and the COA Resident Auditor.
54
The Executing Agencies (DTI, DOST, UP-ISSI, CDA, TESDA, TLRC) shall
provide the SMED Council with a quarterly audited report on the utilization of
the BMBE Development Fund and status report on the progress of their
respective projects (Annex “C”).
Section 6. Effectivity. This order shall take effect fifteen (15) days after
publication in a newspaper of general circulation.
Accordingly, all parties concerned are hereby informed that copies of

Implementing Guidelines and proforma of project brief, MOA, and status report
may be secured from the Bureau of Small and Medium Enterprise Development
located at the 3/F Oppen Bldg., 349 Sen. Gil Puyat Avenue, Makati City.
Section 7. Separability Clause. If any provision or part hereof, is held

invalid or unconstitutional, the remainder of the law or the provision not otherwise
affected shall remain valid and subsisting.
APPROVED: February 24, 2006 PETER B. FAVILA

Secretary
Recommended by:
ZORAYDA AMELIA C. ALONZO

Undersecretary, SMED Group
55
ANNEX “A”
Serial Number: _______________________

(To be filled in by the SMEDC Secretariat)
Date Received by the Secretariat: ______________
PROJECT BRIEF
1. Title <Initiative/Project Title>
2. Executing Agency <Name of Executing Agency>

<Name, Title, Organization,
Postal Address and Contact
Numbers of Project Overseer>
3. Project Description < What does the project aim to

achieve? (e.g. business growth
expansion,employment
generation, new business
generation, etc.) What are the
reasons for proposing this project?
Why should it be considered a
priority? (Include links to
government objectives and
priorities and to Agency or Sector
Strategic Plans.)
4. Target Beneficiaries: Who and what places will benefit

from the project?
5. How will the success of Describe the measure(s) which

project be measured: will indicate that initiative has been
successfully completed or the
objectives realized.
6.Expected Outputs and What will be the expected

Results deliverable le outputs and results
at the end of the project?
7. Estimated Project Cost/ What will be the expected budget

Project Source required to carry out the project?
Include the details of required
budget.
56
8. Timelines: What are the starting and ending
dates of the project? Include
milestones.
9. Cooperating Agencies: Who are the partner agencies, if

any, in implementing the project?
Endorsement:
__________________ ____________________
Responsible Officer: Project Sponsor:
<Name>, <Title? <SMED Council>, <Title>
57
ANNEX “B”
MEMORANDUM OF AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Memorandum of Agreement made and entered into this ___day

of ___ 2006, in the City of Makati, by and between:
The SMALL AND MEDIUN ENTERPRISE DEVELOPMENT COUNCIL,

an inter-agency body attached to the Department of Trade and Industry (DTI)
duly organized and created under and by virtue of Republic Act 6977, as
amended by RA 8289, otherwise known as the “Magna Carta for Small
Enterprises,” with office address at the 3rd Floor, Oppen Bldg., 349 Sen. Gil
Puyat Avenue, City of Makati, Philippines, represented herein by the Department
of Trade and Industry Secretary, HON. PETER B. FAVILA, and hereinafter
referred to as “SMED Council”;
-and-
The _________________________, a government corporate body created
on __________by virtue of _________________, with office address at the
_____________________________________________________, Philippines,
represented herein by its___________, ___________________ , and hereinafter
referred to as “___________”;
WITHNESSETH: That__
WHEREAS, Section 10 of R.A. 9178, otherwise known as the “Barangay

Micro Business Enterprises of 2002”, states that “a BMBE Development Fund
shall be set up with an endownment of Three Hundred Million Pesos
(Php 300,000,000) from PAGCOR and shall be administered by the SMED
Council”;
WHEREAS, Section 10 of R.A. 9178 further provides that “the Department

of Trade and Industry (DTI), the Department of Science and Technology (DOST),
the University of the Philippines Institute for Small Scale Industries (UPISSI),
Cooperative Development Authority (CDA), Technical Education and Skills
Development Authority (TESDA), and Technology and Livelihood Resource
Center (TLRC) may avail of said Fund for technology transfer, production and
management training and marketing assistance to BMBEs”;
WHEREAS, in its____nth SMEDC meeting held on _____, the SMED

Council has approved the project proposal on ____________ by ________ ,
amounting to P_________;
58
NOW, THEREFORE, be it resolved, as it hereby resolved that the parties
hereto agree and bind themselves as follows:
DUTIES AND RESPONSIBILITIES
SMEDCOUNCIL
1. Release, through the SB Corporation as Fund Manager, the needed

project funds in the amount of _____________________.
2. Monitor the proper utilization of the project fund that was released to
the executing agency.
3. Submit annual (calendar year) accomplishment report to Congress

and the Office of the President concerning the utilization of the BMBE
Development Fund.
EXECUTING AGENCY
1. Implement the project in accordance with the proposal approved by

the SMED Council.
2. Submit to the SMED Council a quarterly audited report on the utilization

of project fund.
3. Submit to the SMED Council a quarterly status report on the progress

of the respective projects and such other reports as may be required.
4. Submit a terminal report to the SMED Council upon completion of the

project.
EFFECTIVITY
This agreement shall take effect as of the date of signing and shall remain
effective, unless otherwise terminated upon due and formal notice of both parties
involved herein at least thirty (30) days prior thereto.
The termination of this Agreement shall be without prejudice to the rights

of the parties which have accrued during the effectivity thereof.
SO AGREED.
IN WITNESS WHEREOF, the parties have hereto affixed their signature

on this ____ day of ____________, 2006 at _________.
59
SMALL AND MEDIUM BENEFICIARY AGENCY
ENTERPRISE (DTI, DOST, UP ISSI,
DEVELOPMENT COUNCIL/ TESDA, TLRC)
DEPARTMENT OF TRADE
AND INDUSTRY
_______________________
PETER B. FAVILA HEAD OF AGENCY
DTI Secretary/ SMEDC
Chairman
Signed in the Presence of:
___________________ ___________________
WITNESS WITNESS
ACKNOWLEDGMENT

CITY OF ____________________)
BEFORE ME, this ___day of ___2006, in the City of Makati, personally

appeared Secretary Peter B. Favila with Community Tax Certificate No. ____
issued on _______ at ______ and (Head of Executing Agency) with Community
Tax Certificate No. ______ issued on _______ at ____________,
_________________, both known to me to be the same person who executed
the herein Memorandum of Agreement and they Acknowledge to me that the
same is their free act and deed as well as the free act and deed of entity they
represent.
This memorandum of Agreement consists of three (3) pages including the

page where the acknowledgement is written and signed by the parties and the
witnesses on the left side of the portion of each and every page thereof.
WITNESS MY HAND AND SEAL on the day, year and place first above
written.
Doc. No.____
Page No.____
Book No.____
Series of _____
60
ANNEX “C”
(Name of Executing Agency)
Quarterly Status Report
Project Name:
Project Start Date:
Project End Date:
Summary Report:
Summary Report:
Activity Measures Target Actual Cost Remarks

of success Accomplishment Accomplishment Incurred
Plans for Next Period:
(Provide a bullet point summary of the most significant activities planned for
next period organized by active work plan segment.)
(Published in the March 9, 2006 issue of the Manila Standard)
61

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What is the objective of the law?

What is the objective of the law?

What are the incentives that BMBEs will be receiving?

What are the incentives that BMBEs will be receiving?

Q & A on

Republic Act No. 9178

1) What is the law all about?

The Act was signed into law by President Gloria Macapagal-Arroyo on

A BMBE is defined as any business enterprise engaged in production,

2) What is the objective of the law?

3) What are the incentives that BMBEs will be receiving?

4) What are the agencies mandated to provide assistance in the areas

5) What are the funding agencies designated to set up the special

6) Who may avail of the special credit window for BMBEs?

7) How does one register as a BMBE?

7.2 Additional requirements for new applicants:

7.3 Additional requirements for the renewal of BMBE registration:

8) How much will it cost to register?

10) What is the effect of the law on wages of existing/newly hired

16) Is the Income Tax Exemption privilege of a BMBE irrevocable?

Income Tax Exemption

Ms. Julia Valdez Ms. Livia Ramos

Technology Transfer, Production & Management Training,

Reportorial Requirements of LGUs

REPUBLIC ACT NO. 9178

AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY

Be it enacted by the Senate and House of Representatives of the

SEC. 2. Declaration of Policy. – It is hereby declared to be the policy of

SEC. 3. Definition of Terms. – As used in the Act, the following terms

(a) “Barangay Micro Business Enterprise,” hereinafter referred to as BMBE,

(c.) “Assets” refers to all kinds of properties, real or personal, owned by

(d) “Registration” refers to the inclusion of BMBE in the BMBE Registry of

REGISTRATION AND OPERATION OF BMBEs

As much as possible, BMBEs shall be subject to minimal bureaucratic

SEC. 5 Who are Eligible to Register. – Any person, natural or juridical, or

INCENTIVES AND BENEFITS

Any existing laws to the contrary notwithstanding, interests, commissions

SEC. 10. Technology Transfer, Production and Management Training, and

The Department of Trade and Industry (DTI), the Department of Science

The DTI, in coordination with the private sector and non-government

SEC. 12. Information Dissemination. – The Philippine Information Agency

In case of non-compliance with the provisions of Section 9 of the Act, the

SEC. 15. Implementing Rules and Regulations. – The Secretary of the

SEC. 16. Separability Clause. - – If any provision or part hereof, is held

SEC.17. Repealing Clause. – Existing laws, presidential decrees, executive

(Sgd.) JOSE DE VENECIA JR. (Sgd.) FRANKLIN M. DRILON

(Sgd.) ROBERTO P. NAZARENO (Sgd.) OSCAR G. YABES

Approved: November 13, 2002

(Sgd.) GLORIA MACAPAGAL-ARROYO

SUBJECT: Implementing Rules and Regulations of R.A. 9178,

Pursuant to Sec. 15 of R.A. 9178, otherwise known as the “Barangay

Sec. 1. Declaration of Policy. – As stated in Sec. 2 of R.A. 9178, it is the

Sec. 2. Definition of Terms. – When used herein, the term:

a. Act- shall refer to the “Barangay Micro Business Enterprises Act of

b. Barangay Micro Business Enterprise (BMBE) – as defined in Sec.

“Services” shall exclude those rendered by any one, who is duly

c. Certificate of Authority (CA) – shall refer to the certificate issued to

d. Assets – shall refer to all kinds of properties, real or personal, owned

e. Registration – shall mean the inclusion of a BMBE in the BMBE

II. REGISTRATION OF BMBE

Principal Business Activity Production Processing Manufacturing Trading