Small Business Benefits and Incentives in the Philippines

So you wanted to start a new business, you have considered your product or services, your location, your target customers, the people you wanted to work on it etc... Well a lot of us were wondering how to start your business here in the Philippines. As part of our government programs they are reinforcing the development of small businesses here by focusing on a smaller sector called the baranggays. They actually called it the BMBE Act of 2002 or Baranggay Micro Business Enterprises RA 9178. This act was signed into law by Pres. Gloria Macapagal Arroyo on  November 13, 2002. This Act does not necessarily give the businessmen a CAPITAL but they give nice form of BENEFITS and INCENTIVES. The primary objective of this is 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". 

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Here are Some of the Benefits and Incentives from the RA 9178:

1. Income tax exemption from income arising from the operations of the enterprise.
2. Exemption from the coverage of the Minimum Wage Law. ( But employees will still receive the same social security and health care benefits as other employees.
3. Priority to a special credit window set up specifically for the financing requirements of BMBEs; and
4. 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 atxes, fees, and charges imposed or exempt the BMBEs from local taxes, fees, and charges.

How to Register as BMBE:
Based on the guidelines issued by DTI under DTI DAO No. 01-03 and DOF under the DOF D.O. 17-04 any person, cooperative, or association owning an enterprise that fits the description of 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.

Agencies Mandated to provide assistance in areas of technology transfer, production and management training, and marketing assistance:

• Department of Trade and Industry (DTI)
• Department of Science and Technology (DOST)
• University of the Philippines Institute for Small Scale Industries (UP-ISS)
• Cooperative Development Authority (CDA)
• Technical Education and Skills Development Authority (TESDA)
• Technology and Livelihood Resource Center (TLRC)

Funding Agencies designated to Set-up the Special credit window for Registered BMBEs:

• Land bank of the Philippines
• Development Bank of the Philippines
• Small Business Guarantee and Finance Corporation
• Peoples Credit and Finance Corporation
• Government Service Insurance System ( members only)
• Social Security Services ( members only)

For more information regarding this article please refer to  R.A. 9178 Act of 2002.

Source: DTI BMSMED handouts.
            E-mail Add: bmsmed@dti.gov.ph
            Website: www.dti.gov.ph