Barangay Micro Business Enterprises

RA 9178 Barangay Micro Business Enterprises Act of 2002

Barangay Micro Business Enterprises are defined under the BMBE Law, RA. 9178 Act of 2002 as “any business enterprise engaged in production, processing, or manufacturing of products, including agro-processing, as well as trading and services, with total assets of not more than P3 million. Such assets shall include those arising from loans but not the land on which the plant and equipment are located.”

The BMBE Law

President Gloria Macapagal-Arroyo signed the Act into law on November 13, 2002, to encourage the formation and growth of BMBEs by granting them incentives and other benefits.

What is the law all about?

The “BMBEs Act of 2002” encourages the formation and growth of barangay micro business enterprises by granting them incentives and other benefits. President Gloria Macapagal-Arroyo signed the Act into law on November 13, 2002. On February 7, 2003, the DTI Department issued Administrative Order No. 1, Series of 2003, which served as the Implementing Rules and Regulations (IRR) for the Act. Subsequently, it appeared twice in the February 11 and 26, 2003 issues of the Manila Bulletin.

Barangay Micro Business Enterprises (BMBEs) engage in the production, processing, or manufacturing of products. This includes agro-processing, as well as trading and services, with total assets not exceeding P3 million. Such assets shall include those arising from loans but not the land on which the plant and equipment are located.

The Act excludes services rendered by anyone who is duly licensed by the government after having passed a government licensure examination.  This is in connection with the exercise of one’s profession (e.g., Accountant, Lawyer, Doctor, etc.).

DOF Department Order No. 17-04 specifies that an enterprise can only qualify for registration if it is not controlled by a large-scale enterprise.  This also applies to enterprises controlled by persons who are not owners or employees of the enterprise.

What is the objective of the law?

BMBEs are essential to the country’s economic development since they effectively serve as seedbeds of Filipino entrepreneurial talent. Thus, the Act primarily aims to integrate micro enterprises in the informal sector into the mainstream of the economy. Strengthening BMBEs would mean more jobs and livelihood, and a better quality of life for Filipinos.  The Act also aims to “integrate micro-enterprises in the informal sector into the mainstream of the economy.”