MANILA, Philippines – In 2014, roughly 99.5% of establishments in the Philippines were considered micro, small, and medium enterprises (MSMEs) which employed about 61.6% of the labor force, making them the primary source of livelihoods and jobs in the country.
MSMEs are defined as registered businesses, enterprises, or startups that have total assets of less than P100 million in value and have at most 199 employees.
From these crucial numbers, unfortunately, they only contribute to about one-third of the county’s total income – the rest coming from large companies and conglomerates, merely 0.05% of the business population.
This is where Republic Act No. 9178, or the Baranggay Micro Business Enterprise (BMBE) Law, comes in.
Enacted in 2002, the BMBE Law aims to scale-up MSMEs – helping them drive the economy better – by giving them several benefits, such as tax exemption and market assistance, among others.
Perks of a BMBE beneficiary
If you are thinking of applying, here are some benefits your business enterprise may get upon being accredited as a BMBE:
Tax exemption. Accredited enterprises are waived of paying income taxes arising from their operating expenses. This, however, does not include the exemption in transaction taxes such as value-added tax (VAT) and other percentage taxes, among others. Furthermore, BMBE-accredited enterprises are still required to regularly file their regular income tax returns.
Minimum wage exemption. BMBE-registered enterprises are also allowed to pay below the statutory minimum wage which is otherwise not permitted by law. However, they are still required to pay for their employees' benefits such as PhilHeath, SSS, and HMDF.
Credit priority. Financial institutions are given incentives in providing loans to BMBE-registered business enterprises. They are also required to provide a special credit window for BMBEs.
Growth assistance. To provide technical support, the government has allotted funds to agencies supporting BMBEs such as DTI Negosyo Centers, UP Institute for Small Scale Industries (UP-ISSI), and the Department of Science and Technology (DOST).
Applying for BMBE accreditation
Being an MSME, however, does not automatically qualify your business enterprise to enjoy these benefits. Specifically, only enterprises with at most P3 million in total asset value are eligible to apply and need to get a BMBE Certificate of Authority.
Here is how to apply for the BMBE Certificate of Authority for the first time:
Things you should know
For the registration and issuance of the BMBE Certification of Authority, no fee shall be charged as per DTI Administrative Order No. 16-01.
Services provided by professionals licensed through the Professional Regulatory Commission and those businesses that are part of larger corporations are not qualified for the BMBE accreditation.
Furthermore, the BMBE Certificate of Authority may be revoked for certain reasons such as submission of falsified documents, transfer of the place of business, and/or having a total asset value exceeding P3 million.
For more detailed information on this and other opportunities for your business, consult your nearest Negosyo Center or visit the DTI website. – With reports from Filbert Ng Tsai/Rappler.com