Guide to the Magna Carta for Micro Small and Medium Enterprises

“(3) a representative from each of the five (5)government financial institutions mandated in thisAct to provide the initial capital of the Corporation,who shall be designated, under guidelines agreedupon by the Board Chairmen of said institutions;“(e) Notwithstanding the provisions of Republic Act No. 6758,and Compensation Circular No. 10, series of 1989 issued bythe Department of Budget and Management, the Board ofDirectors of SBGFC shall have the authority to extend to theemployees and personnel thereof the allowance and fringesimilar to those extended to and currently enjoyed by theemployees and personnel of other government financialinstitutions.”Sec. 9. Sec. 13 of Republic Act No. 6977 is hereby amended toread as follows:“SEC. 13. Mandatory Allocation of Credit Resource toSmall and Medium Enterprises. - For the period of ten (10) yearsfrom the date of the effectivity of this Act, all lending institutions asdefined under Bangko Sentral ng Pilipinas rules, whether public ofprivate, shall set aside at least six (6%) and at least two percent(2%) for small and medium enterprises, respectively, of their totalloan portfolio based on their balance sheet as of the end of theprevious quarter, and make it available for small and mediumenterprises credit as herein contemplated.“The Bangko Sentral ng Pilipinas, in consultation with theCouncil, shall formulate rules for the effective implementation of thisprovision: Provided, That the purchase of government notes,securities and other negotiable instruments, with the exemptions ofsuch instruments as may be offered by the SBGFC which do not paymarket rates, shall not be deemed compliance with the foregoingprovision: Provided, further, That the Bangko Sentral ng Pilipinasshall establish an incentive program to encourage lending to smalland medium industries beyond mandatory credit allocation to saidenterprises, such as possible reduction in bank’s reserve requirement.“The SMED Council shall set up the appropriate systems tomonitor all loan applications of small and medium enterprises in orderto account for the absorptive capacity of the small and mediumenterprises sector.“The Bangko Sentral ng Pilipinas shall require lendinginstitutions covered by this Act to furnish to the Small and100