The House committee on banks and financial intermediaries yesterday approved a consolidated version of the proposed “Government Financial Institutions (GFIs) Unified Initiatives to Distressed Enterprises for Economic Recovery Act” or GUIDE Act to help businesses and critical industries, including micro, small, and medium enterprises (MSMEs) get back on their feet after being disrupted by the new coronavirus disease 2019 pandemic.
The panel chaired by Manila Rep. Irwin Tieng approved House Bills Nos. 1, 685, 3460, and 3700 after invoking Section 48 of the House Rules, which allows the immediate approval of measures that have hurdled third reading in the previous Congress.
Speaker Martin Romualdez’ House Bill No. 1 mandates the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to expand their credit and rediscounting facilities to affected MSMEs in the agriculture, infrastructure, manufacturing, and service industries to help them meet their liquidity needs.
HB No. 1 seeks to allocate P7.5 billion to LBP and P2.5 billion to DBP or a total of P10 billion to carry out their mandates.
“To this end, the government financial institutions are mandated to expand their credit programs in order to assist MSMEs to meet their liquidity needs. In particular, the LBP and DBP are mandated to expand their credit and rediscounting facilities to affected MSMEs in the agriculture, infrastructure, manufacturing, and service industries,” the bill said.
Romualdez, his wife Rep. Yedda Marie Romualdez (PL, Tingog), his nephew presidential son Ilocos Norte Rep. Ferdinand Alexander Marcos and Rep. Jude Acidre, also of Tingog, are the other authors of HB No. 1.
The other authors of the consolidated measure include Albay Rep. Joey Sarte Salceda, Davao City Rep. Paolo Duterte and Benguet Rep. Eric Go Yap.
Under the measure, the LBP and the DBP would be authorized to create a special holding company, which the Speaker explained would provide support with solvency/liquidity issues caused by the health crisis to strategically important companies.
The bill defines an MSME as “any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value falling under the following categories: micro, not more than P3 million; small, P3 million to P15 million; and medium, P15 million to P100 million.”
The GUIDE bill also increases DBP’s capital stock from P35 billion to P100 billion divided into one billion shares of P100 each to be fully subscribed by the national government.
