Small and Medium Enterprises

Sen. Bam to BIR: Ensure zero harassment of small businesses in intensified inspections

While he welcomes the Bureau of Internal Revenue’s move to intensify inspection of businesses, Sen. Bam Aquino said the agency must ensure that this action will not be a tool for harassment and corruption.

“We laud the BIR’s effort to go after tax evaders, but the agency should also guarantee that they will target large businesses and not harass our micro, small and medium enterprises (MSMEs). Walang kalaban-laban ang mga maliliit na negosyo kung sila ay gipitin,” said Sen. Bam.

“Lalo na ngayong tumataas ang presyo ng bilihin, inaasahan ng mga pamilya ang kanilang maliit na negosyo, tulad ng sari-sari store at carenderia. Tiyakin dapat ng BIR na hindi papahirapan ng mga inspectors ang mga kababayan nating nasa laylayan,” added Sen. Bam.

Earlier, Sen. Bam pushed for the exemption of micro enterprises earning less than P250,000 annually from paying the required percentage taxes, on top of their income tax exemption, under the Tax Reform Acceleration and Inclusion Act (TRAIN) Act.

“Malaki ang naitutulong ng mga maliliit na negosyo at sideline sa mga mahihirap nating pamilya at komunidad. Dapat lang na suportahan sila ng gobyerno,” said Sen. Bam.

Sen. Bam is a former social entrepreneur and long-time advocate for MSME development.

His first law, Republic Act 10644 or the Go Negosyo Act, has established more than 800 Negosyo Centers around the Philippines to help Filipinos put up and manage successful businesses.

Sen. Bam also filed Senate Bill No. 169 or the Small Business Tax Reform Act, which seeks to provide small businesses with a lower income tax rate, VAT exemption and simplified filing of taxes.

Under the measure, all small businesses shall be exempt from payment of income tax for the first three years of its operation from date of establishment and will be subjected to lower income tax rates thereafter.

“This bill also proposes the lowering of the income tax rate for MSEs and an exemption from VAT, among other methods to help our small businesses grow,” said Sen. Bam.

Is crowdfunding the future of businesses in PH?

MANILA, Philippines – How does crowdfunding work? What solutions can it offer business startups and social enterprises in the Philippines?


According to Senator Bam Aquino, the current banking system makes it very difficult for small and medium enterprises (SMEs) and business startups to get the financing they need. But for large corporations, it is very easy to get loans – in fact, banks knock at their doors with offers.


“If you’re a micro to pre-medium business and you need around P500,000 to P5 million but you don’t have collateral – even if you have a contract, idea or a business model – you still won’t get the financing you need,” the senator added.


This is why Filipinos need to look for alternative finance sources like crowdfunding, Aquino noted.


During the 1st Philippine Crowdfunding Conference in Manila on Wednesday, March 18, business experts and successful entrepreneurs discussed crowdfunding and crowdsourcing and how these concepts can be applied in Philippine businesses.


Crowdfunding for small businesses


Crowdfunding is the thriving practice of funding a venture through raising monetary contributions from a group of people. The advancement of social media has particularly made this practice successful for business startups in other countries.


Aquino believes it can work for the Philippine economy.


“As we go around different areas, we find that putting up a small enterprise is becoming the best solution for Filipinos. But they need the right support to be able to turn their ideas into fruition. Crowdfunding might be the best way to move this sector forward,” Aquino said.


The senator, who authored the Go Negosyo Act of 2014, emphasized the importance of empowering social enterprises and SMEs in promoting inclusive growth in the country.


“If we will support our SMEs, who’s to say that we can’t enter the next phase of where the Philippines should be – a middle income economy where opportunities are (available) for more Filipinos?” Aquino said.


He added: “Each part of the chain of our countrymen should be able to get that opportunity to put up their business and turn their ideas into fruition. This is the best place for crowdfunding to come in.”


Crowdfunding and social media


Crowdsourcing Week Founder Epi Nekaj says crowdsourcing and crowd funding are causing disruptions in the world’s finance systems.

Epi Ludvik Nekaj, founder of Crowdsourcing Week, said crowdfunding started because of two major factors – social media and the world financial crisis in 2008, which gave birth to crowd companies.


“Millions of people right now are becoming bankers. That’s why banks right now are trying to figure out if their business model is broken or outdated,” he said.


The Internet continues to contribute to the growth of crowdsourcing and crowdfunding. According to experts, everyone will be connected to the Internet by 2035.


“This means the future of content is human-powered content. Who runs the Internet? There’s no single entity that runs it. You are the Internet. We are the Internet,” Nekaj said.


He added: “Crowdsourcing is about passion. It’s about talents, skills, and resources. When we talk about crowdsourcing and crowdfunding, we need to make sure that we’re really tapping the resources that the crowds have.


Crowdsourcing spawns innovation and social media spawns connection.”

Nekaj said that there are 4 types of crowdfunding platforms. These are:


  • Donation – the crowd gives money or other resources to support the cause.
  • Reward-based – the crowd gives money in exchange for a reward (a product or service) that the company will provide or produce
  • Equity-based – the members of the crowd become part-owners of the company raising funds
  • Lending – the company merely borrows the money from the crowd with a legally binding contract that the loan will be repaid


In Asia, Nekaj noted that crowdfunding is more inclined toward equity and lending. This is because these systems challenge founders to finish the project – since 70% of crowdfunding programs do not deliver on time.


“There is so much potential in Asia. By 2025, the volume of investment crowdfunding will be $92 billion, according to experts,” he added.


Harnessing the power of the crowds


Crowdsourcing efforts have actually been used in past projects in the Philippines. Rappler’s investigative desk editor Chay Hofilena discussed how the news website has utilized crowdsourcing in its past efforts.


In Football for Peace, Rappler and the Philippine marines were able to raise 2,400 indestructible balls for kids in conflict areas through donations.

Meanwhile, Project Agos constantly calls out for volunteers who help scan social media for calls of help during disasters.

All these campaigns were amplified by social media.


“We’ve seen that social media has the potential for social change. It’s a mobilization tool we can use to harness the good in people,” Hofilena said.


Crowdsourcing has also democratized the way media organizations cover news.

“It’s no longer a top-down editorial approach. Now, the public can set the news agenda by stating the issues that concern them and issues that matter to them. It has allowed the media to become real agents of change,” she added.


The way of the future


Nekaj believes crowdfunding will continue to change the world’s finance systems in the future.


“A bank is a place that will lend you money if you can prove that you don’t need it. Alternative financing is developing because of this. We don’t need more banks. We need more banking,” he added.


While social media has become a powerful tool in crowdsourcing and crowdfunding, people still need to wield it carefully he said.


“There’s nothing wrong with social media, but we have to be socially productive. You should be that entity that thinks forward. We need to be part of a socially productive ecosystem in crowdsourcing,” Nekaj stressed.


Source: Rappler



Easier Credit Access to Fuel Growth of MSMEs – Sen. Bam

Despite the key role they play in strengthening the economy, lack of access to financing remains as the biggest roadblock for the growth of Micro, Small and Medium Enterprises (MSMEs) in the country.

“The existing requirements for credit do not consider the nature and stature of these micro and small businesses,” said Senator Bam Aquino, chairman of the Committee on Trade Commerce and Entrepreneurship.

The senator pointed out that current prerequisites for financing are marginalizing the MSME sector, which accounts for 99.6% of all enterprise in the country and employs about 62% of the workforce in the country.

To address this, Aquino has filed Senate Bill No. 2218 expanding and strengthening the current Credit Surety Fund (CSF) program of the Bangko Sentral ng Pilipinas (BSP) to enable it to extend financial help to more micro and small enterprises all over the country.

“The CSF is seen as an effective program to address the financing gap that is affecting many entrepreneurs in the country,” Aquino said, referring to the BSP’s credit enhancement scheme that allows MSMEs, which are members of cooperatives to borrow from banks without collateral.

He emphasized that CSF must be supported by passing laws that will augment and enable it to help more small businesses who lack access to capital and other assistance.

“With our bill, we will institutionalize CSF and give it more funding to enable it to provide help to more MSMEs,” Aquino added.

The BSP recently launched three CSF programs in Cagayan de Oro, Aklan, and Tarlac, bringing the total number of credit surety funds established nationwide to 29 from 26 in the previous year.

In addition, the bill is aimed at aimed at building the capability of MSMEs, cooperatives and non-government organizations in the areas of credit evaluation, loan and risk management, and good governance.

Also, the bill seeks to enhance the MSMEs’ credit worthiness and broaden access to credit facilities, and sustain the continuous flow of credit in the countryside.

“This will generate more employment and alleviate poverty through increased investments and economic activities,” added Aquino, stressing that the challenge is to grow the micro businesses into small enterprises and the small enterprises to medium enterprises.

“If it this is done, growth would not only be for the few rich, rather, it would be for everyone, even to the poorest Filipino,” Aquino said.



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