Barangay micro enterprises get P300-M subsidy

A new law has set aside an initial P300 million to subsidize barangay micro business enterprises (BMBEs).

Negros Oriental Rep. Herminio Teves said the P300-million BMBE Development Fund shall be put up with a mandatory endowment from the state-run Philippine Amusement and Gaming Corp.

Teves is one of the principal authors of the Barangay Micro Business Enterprises Act, which President Arroyo signed into law recently.

Teves said the P300-million seed funding, to be administered by the Small and Medium Enterprises Development Council, shall be used to support BMBEs through technology transfer, production and management training and marketing assistance.

Teves said the new law also grants a whole set of tax and non-tax incentives to BMBEs, defined as those business entities with total assets not exceeding P3 million, and which are engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services.

Under what is now Republic Act 9178, Teves said BMBEs shall be exempt from income taxes and minimum wage rates.

They shall be also subject only to minimal local government taxes and fees, and shall enjoy prompt registration, the Negros Oriental lawmaker said.

BMBEs shall likewise enjoy special credit windows from government financial institutions and state-run credit guarantee and pension funds, he added.

He said private financial institutions involved in credit support mechanisms for BMBEs shall enjoy tax breaks and other and other incentives.

Three lead agencies – the Department of the Interior and Local Government, Department of Trade and Industry and the Bangko Sentral ng Pilipinas – shall oversee the implementation of the new law.

"Promoting the establishment of small, particularly rural-based BMBEs, will help boost local economies," Teves pointed out.

"This is one sure way to create new jobs, boost household incomes, alleviate rural poverty and ease urban migration and congestion," Teves concluded.