Arroyo signs MSME law; redefines micro, small traders
The law aims to strengthen financial support to small businesses by addressing the problem of lack of capital and access to credit and is part of the priority legislative agenda crafted by the Legislative Executive Development Advisory Council (LEDAC) for the remaining session days of Congress.
RA 9501 requires banks and lending institutions to allocate at least eight percent of their loan portfolio to micro and small enterprises.
The present law requires only a six percent minimum allocation for micro and small enterprises and a minimum of two percent for medium enterprises.
It also adjusted the definition of MSMEs.
Firms will now be considered as micro enterprises when they have total assets of not more than P3 million, up from the previous threshold amount of P1.5 million.
Small enterprises will be those with total assets of P3 million to not more than P15 million.
Medium enterprises are those with total assets of P15 million to P100 million, from the previous threshold amount of P60 million.
The new law increased the capital stock of the Small Business Corp., the government agency created to help MSMEs, to P10 billion.
RA 9501 also requires government to provide adequate support to MSMEs through effective credit facilities that do away with burdensome collateral requirements, access to new technologies and regular entrepreneurship training programs for workers and a comprehensive development plan that would ensure the viability and growth of small and medium businesses in the country.
Opposition Sen. Loren Legarda, who headed the Senate panel in the bicameral committee, which helped craft the law, said that MSMEs make up 99 percent of economic activity, with micro enterprises comprising 92 percent.
Her presence at the ceremony drew questions, specially after a beso-beso with Mrs Arroyo.
Legarda said her "beso-beso" with President Arroyo after the signing ceremonies does not mean she is reconciling with the head of the administration coalition.
"Ang beso sa Philippine tradition that is etika, sa tradisyon di lang sa Pilipinas at sa ibang bansa. Si (Vice President) Noli (de Castro) rin pag nakita ko beso-beso rin. Yun ay etika...Trabaho walang pulitika," she said.
"It's not a matter of collaborating. Ako I just do my work so as not to be misunderstood and not to be misquoted so para walang anggulo na malagay. This is just work for me," she added. - GMANews.TV