GOVERNMENT PROGRAMS FOR ENTREPRENEURS

Both governmental and non- governmental organization, as well as foreign agencies, offer financial
and technical assistance to micro and small entrepreneurs, particularly for those in the rural
communities.
The magna carta for small enterprise, “kalakalan 20” “micro enterprise development Program” “Self-
Employment Loan Assistance program” and “Training Programs for Small and Medium Enterprise”. All
these informative materials of the DTI are envisioned to promote entrepreneurship in order to create
more jobs and incomes, thus alleviating poverty which is the major thrusts of the present administration.
“Magna Carta for Small Enterprises.
1. WHAT IS R. A. 6977, OTHERWISE KNOWN AS MAGA CARTA FOR SMALL
ENTERPRISE?
AN ACT TO PROMOTE, DEVELOP AND ASSIST SMALL AND MEDIUM SCALE ENTERPRISES
THROUGH THE CREATION OF A SMALL AND MEDIUM ENTERPRISE DEVELOPMENT (SMED)
COUNCIL, AND THE RATIONALIZATION OF GOVERNMENT ASSISTANCE PROGRAMS AND
AGENCIES CONCERNED WITH THE DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES,
AND FOR OTHER PURPOSES.
The establishment of a Small Business Guarantee and Finance Corporation (SBGFC), the mandatory
allocation of credit resources to small enterprises and the rationalization of government assistance
programs and agencies concerned with the development of SMEs.
2. WHO WILL BENEFIT FROM THE MAGNA CARTA FOR SMALL ENTERPRISE?
Small and medium enterprise will benefit from the Magna carta for Small Enterprise.
3. WHAT IS A SMALL AND MEDIUM ENTERPRISE?
Small and medium enterprise” shall be defined as any business activity or enterprise engaged in
industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or
corporation whose total assets, inclusive of those arising from loans but exclusive of the land on
which the particular business entity’s office, plant and equipment are situated, must have value falling
under the following categories:
micro: less than P 50,000
cottage: P50,001 – P500,000
small: P500,001 – P5,000,000
medium: P5,000,001 – P20,000,000
4. WHAT IS THE SMALL AND MEDIUM ENTERPRISE DEVELOPMENT COUNCIL?
The Council shall be the primary agency responsible for the promotion, growth and development of
small and medium enterprises in the country by way of facilitating and closely coordinating national
efforts to promote the viability and growth of small and medium enterprises, including assisting
relevant agencies in the tapping of local and foreign funds for small and medium enterprise
development, as well as promoting the use of existing guarantee programs.
5. WHO ARE THE MEMBERS OF THE SMED COUNCIL?
The Council shall be headed by the Secretary of Trade and Industry as Chairman. The members
shall be the following:
a) Director General of the National Economic and Development Authority;
b) Secretary of Agriculture;
c) Secretary of Labor and Employment;

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d) Secretary of Environment and Natural Resources;
e) Secretary of Science and Technology;
f) Chairman of Small Business Finance and Guarantee Corporation;
g) Chairman of the small and medium enterprises promotion body which the President shall
undertake to establish under this Act; and
h) Three (3) representatives from the private sector, all Filipino citizens, to represent Luzon, Visayas
and Mindanao to be appointed by the President, one of whom shall come from the banking industry.
6. WHAT ARE THE POWERS AND FUNCTION OF THE SMED COUNCIL
The Small and Medium Enterprise Development (SMED) Council shall have the following
powers, duties and functions:

a) To help establish the needed environment and opportunities conducive to the growth and
development of the small and medium enterprise sector;

b) To recommend to the President and the Congress all policy matters affecting small and medium
scale enterprises;

c) To formulate a comprehensive small and medium enterprise development plan to be integrated

into the National Economic and Development Authority Development Plans;

d) To coordinate and integrate various government and private sector activities relating to small and
medium enterprise development;

e) To review existing policies of government agencies that would affect the growth and development
of small and medium enterprises and recommend changes to the President and/or to the Congress
whenever deemed necessary. This shall include efforts to simplify rules and regulations as well as
procedural and documentary requirements in the registration, financing, and other activities relevant
to small and medium enterprises;

f) To monitor and determine the progress of various agencies geared towards the development of the
sector. This shall include overseeing, in coordination with local government units and the Department
of Local Government as well as private sector groups/associations, the developments among small
and medium enterprises, particularly the cottage and micro-sized firms;

g) To promulgate implementing guidelines, programs, and operating principles as may be deemed

proper and necessary in the light of government policies and objectives of this Act;

h) To provide the appropriate policy and coordinative framework in assisting relevant government
agencies, in coordination with the National Economic and Development Authority and the
Coordinating Council for the Philippine Assistance Program, as may be necessary, in the tapping of
local and foreign funds for small and medium enterprise development;

i) To promote the productivity and viability of small and medium enterprises by way of directing and/or
assisting relevant government agencies and institutions at the national, regional and provincial levels
towards the:

1) Provision of business training courses, technical training for technicians and skilled laborers and
continuing skills upgrading programs;

2) Provision of labor-management guidance, assistance and improvement of the working conditions

of employees in small and medium-sized firms;

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3) Provision of guidance and assistance regarding product quality/product development and product
diversification;

4) Provision of guidance and assistance for the adoption of improved production techniques and
commercialization of appropriate technologies for the product development and for increased
utilization of indigenous raw materials;

5) Provision of assistance in marketing and distribution of products of small and medium scale
enterprise through local supply-demand information, industry and provincial profiles, overseas
marketing promotion, domestic market linkaging and the establishment of common service facilities
such as common and/or cooperative bonded warehouse, grains storage, agro-processing and drying
facilities., ice plants, refrigerated storage, cooperative trucking facilities, etc.;

6) Intensification of assistance and guidance to enable greater access to credit through a simplified
multi-agency financing program; to encourage development of other modes of financing such as
leasing and venture capital activities; to provide effective credit guarantee systems, and encourage
the formation of credit guarantee associations, including setting up of credit records and information
systems and to decentralize loan approval mechanisms;

7) Provision of concessional interest rates, lower financing fees, which. may include incentives for
prompt credit payments, arrangements tying amortizations to business cash flows, effective
substitution of government guarantee cover on loans for the borrower’s lack of collateral;

8) Provision of bankruptcy preventive measures through the setting up of a mutual relief system for
distressed enterprises, and the establishment of measures such as insurance against extraordinary
disasters;

9) Intensification of information dissemination campaigns and entrepreneurship education activities;

10) Easier access to and availment of tax credits and other tax and duty incentives as provided by the
Omnibus Investment Code and other laws;

11) Provision of support for product experimentation and research and development activities as well
as access to information on commercialized technologies; and

12) Provision of more infrastructure facilities and public utilities to support operations of small and
medium enterprises;

7. WHAT IS THE SMALL BUSINESS GUARANTEE AND FINANCE CORPORATION

( SBGFC) ?
Creation of Small Business Guarantee and Finance Corporation.—There is hereby created a body
corporate to be known as the Small Business Guarantee and Finance Corporation, hereinafter
referred to as SBGFC, which shall provide, promote, develop and widen in both scope and service
reach various alternative modes of financing for small enterprises, including, but not limited to, direct
and indirect project lending, venture capital, financial leasing, secondary mortgage and/or
rediscounting of loan papers to small businesses, secondary/regional stock markets: Provided, That
crop production financing shall not be serviced by the Corporation.
The corporation shall guarantee loans obtained by qualified borrowers.

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 8. WHAT LOANS CAN BE GUARANTEED BY THE SBGFC?
The Corporation shall guarantee loans obtained by qualified small enterprises, local and/or
regional associations small enterprises and industries, private voluntary organizations and/or
cooperatives, under such terms and conditions adopted by its Board.
9. WHAT ARE THE GUARANTEE SCHEMES THAT MAY BE PROVIDED BY THE SBGFC?
It may guarantee loans up to one hundred percent (100%). It may also provide second level
guarantee (i.e., re-insurance) on the credit and/or investment guarantees made by credit guarantee
associations and other institutions in support of small entrepreneurs.
10. WHAT DOES THE PROVISION ON THE MANDATORY ALLOCATION OF CREDIT
RESOURCES TO SMALL ENTERPRISE PROVIDE FOR?
All lending institutions as defined under Central Bank rules, whether public or private, shall set aside
a portion of their total loan portfolio based on their balance sheet as of the end of the previous
quarter, and make it available for small enterprise credit as herein contemplated. The portion
mandated to be so set aside shall at least be, five percent (5%) by the end of the first year of the
effectivity of this Act, ten percent (10%) by the end of the second year through the end of the fifth
year, and five percent (5%) by the end of sixth year and may come down to zero by the end of the
seventh year.
That the purchase of government notes, securities, and other negotiable instruments, with the
exception of such instruments as may be offered by the SBGFC, shall not be deemed compliance
with the foregoing provision.
SMALL -MEDIUM ENTERPRISE SKILLS TRAINING
This program focuses on the development and training of existing and/ or would be small and
medium entrepreneurs so that they can effectively contribute to the growth and stability of their
business and/ or start a small medium business. This program provides continuing training of existing
entrepreneurs, their supervisor and workers in the improvement and development of production
process.
• Types of SME Skills Training:
• Meat processing
• Fish processing
• Peanut processing
• Wine and vinegar processing
• Mango chips processing
• Skills upgrading on knitting
• Skill upgrading on leathercraft
• Skills upgrading on shellcraft
• Skills upgrading in ceramics
• Skill upgrading on pottery
• Bamboo furniture training
• Duck raising and hatchery
• Speed sewing
• Salt and tile making
• Basic carpentry training
• Skills training on rope making
• Bamboo craft ( basketry)
• Embroidery
• Soft broom making
• Stuffed toy making
• Sawali making

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 • Loom weaving
• Clay hallow block making
• Seagrass basketry
• Rattan basketry
• Christmas décor making
• Fruit processing
• Candle making
• Banana processing

SMALL MEDIUM ENTERPRISE MANAGEMENT TRAINING

This program focuses on the development and training of existing and/or would be small and
medium entrepreneurs so that they can effectively contribute to the growth and stability of their
business and/or start a small and medium business.
Types of SME management Training:
• Simplified bookkeeping
• Financial management
• Business management
• Marketing management
• Production management
• Product planning and development
• Furniture business development
• Strategic marketing
• Product costing and pricing
• Basic exporting
• Consumer education
• Productivity quality improvement
• Improve your business training
• Symposium on livelihood projects
• Starting a small business
• Subcontracting with exporters
• Organizing a corporation
• Value formation seminar
• Teambuilding
• Store/design merchandizing
• Effective time management
• Leadership training for farmers leader
• Management extension and consultancy
• Advertising and promotion
• How to get started in exports
• How to negotiate with buyers
• Export management
• Entrepreneurship development seminar
• Seminar on bookkeeping and accounting
• Seminar on management and simple bookkeeping
• Cooperative management and simple bookkeeping

SOURCE: FAJARDO, F.R.,1994. ENTREPRENUERSHIP.Published by National book store

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