BARANGAY MICRO BUSINESS ENTERPRISE ACT OF 2002

Case Overview and Summary

Barangay Micro Business Enterprises (BMBEs) Act of 2002

Declaration of Policy (Section 2):
- Promote economic development by encouraging BMBEs as seedbeds of entrepreneurship and integrating the informal sector into the mainstream economy.
- Rationalize bureaucratic restrictions and grant incentives/benefits to generate employment and alleviate poverty.

Definition of Terms (Section 3):
- BMBE: Business entity/enterprise with total assets (excluding land) not exceeding P3,000,000; excludes licensed professionals.
- Certificate of Authority: Certificate issued to registered BMBE to operate and receive benefits.
- Assets: Properties owned/used by BMBE for business, as defined by SMED Council.
- Registration: Inclusion of BMBE in city/municipality registry.
- Financing: Borrowings of BMBE from all sources after registration.

Registration and Operation of BMBEs (Sections 4-6):
- City/municipality treasurer to register BMBEs and issue Certificate of Authority within 15 working days; deemed registered if delayed.
- LGUs to establish One-Stop Registration Center and periodically evaluate BMBEs' financial status.
- Certificate of Authority issued free of charge but renewal fee allowed to cover administrative costs; valid for 2 years, renewable.
- Minimal bureaucratic requirements and reasonable fees/charges for BMBEs.
- Any natural/juridical person, cooperative, or association meeting qualifications can register as BMBE.
- BMBEs to report ownership changes and surrender Certificate for notation.

Incentives and Benefits (Sections 7-11):
- BMBEs exempt from income tax arising from operations (Section 7).
- LGUs encouraged to reduce/exempt BMBEs from local taxes, fees, and charges (Section 7).
- BMBEs exempt from Minimum Wage Law; employees entitled to social security and healthcare benefits (Section 8).
- Financial institutions to set up special credit windows for BMBE financing needs (Section 9).
- BMBE loans considered alternative compliance to Agri-Agra Law and Magna Carta for SMEs; computed at twice face value (Section 9).
- SBGFC and QUEDANCOR to provide credit guarantee programs for BMBEs (Section 9).
- BMBE Development Fund of P300,000,000 from PAGCOR for technology transfer, training, and marketing assistance (Section 10).
- DTI to explore linking/matching BMBEs with SMEs and large enterprises, and establish incentives (Section 10).
- Business registration data accessible for trade/investment promotion (Section 11).

Information Dissemination (Section 12):
- PIA, DOLE, DILG, and DTI to ensure proper information dissemination of the Act's contents and benefits, especially at the barangay level.

Penalty (Section 13):
- Willful violation: Fine of P25,000 to P50,000 and imprisonment of 6 months to 2 years.
- Non-compliance with Section 9: BSP to impose administrative sanctions and fine of at least P500,000 on concerned government financial institutions.

Miscellaneous Provisions (Sections 14-18):
- DILG, DTI, and BSP to submit annual report to Congress on implementation status (Section 14).
- DTI, in consultation with DILG, DOF, and BSP, to issue implementing rules and regulations within 90 days (Section 15).
- Separability clause (Section 16).
- Repealing clause for inconsistent laws/regulations (Section 17).
- Effectivity 15 days after publication in Official Gazette or newspapers (Section 18).