Philippine officials recently finalized the implementing rules and regulations of the Microfinance NGOs Act, a measure signed into law on November 3, 2015, by then-President Beigno Aquino III that: (1) calls for the establishment of a microenterprise development strategy; (2) creates a microfinance NGO regulatory council that will accredit NGOs that offer financial services to microentrepreneurs and small-business owners. Accredited microfinance NGOs will be obligated to pay a 2-percent tax on gross receipts in lieu of all national taxes. They also must agree to abide by principles including furthering the “prevention of over-indebtedness, promotion of transparency, practice of responsible pricing, fair and respectful treatment of clients, privacy of client data, and mechanisms for complaint resolution,” according to Republic Act number 10693.
Microfinance programs include microcredit and financial literacy programs, business leadership training, agricultural microfinance, electronic payment systems, microcredit and CBU microsavings. Microfinance NGOs are forbidden from accepting deposits or directly engaging in the insurance business, although they may act as agents.
By Petra Barbu, Research Associate
Sources and Additional Resources
[1] GMA News Online
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