Guide to the Magna Carta for Micro Small and Medium Enterprises

(b) one hundred percent (100%) owned and capitalized by Filipinocitizens if single proprietorship or partnership. If the enterprise is ajuridical entity at least 60% of its capital or outstanding stocks mustbe owned by Filipino citizens;(c) primarily engaged in manufacturing, processing, and/or productionexcluding farm level agricultural/crop production; and(d) it must not be a branch, subsidiary or division of a large scaleenterprise nor may its policies be determined by a large scaleenterprise or by persons who are not owners or employees of theenterprise.However, this requirement shall not preclude a small and mediumenterprise from accepting subcontracts from large enterprises or firms joiningin cooperative activities with other small and medium enterprises.Programs of the financing corporation as provided in subsequentSections of this Act shall be exclusively targeted to small, cottage and microsizedenterprises. Financing from the Philippine National Bank, DevelopmentBank of the Philippines, Land Bank of the Philippines and other financialinstitutions shall be made available to medium enterprises.Medium enterprises, however, shall be entitled to avail of the otherincentives, programs and services as provided for in this Act.Sec. 5. Guiding Principles. — To set the pace for small and mediumenterprise development, the State shall be guided by the following principles:(a) Minimal set of rules and simplification of procedures andrequirements. All government agencies having to do with smallenterprises shall pursue the principles of minimum regulation to ensurestability of rules and to encourage entrepreneurial spirit among thecitizenry. The agencies shall see to it that procedural rules andrequirements, within their respective offices and in coordination withother agencies, are minimized in the act of registration, availment offinancing and accessing other government services and assistance.(b) Role of the private sector. In order to hasten growth and expansionof small and medium enterprises, the private sector throughout thecountry shall be encouraged to assist in the effective implementationof this Act by constantly policing their ranks; and by participating ingovernment programs for small and medium enterprises strictly inaccordance with law, and consistent with the attainment of thepurposes hereof. The government shall encourage the organizationand establishment of small and medium enterprise industry104