House panel approves GUIDE bill
THE HOUSE Committee on Banks and Financial Intermediaries on Monday approved a measure that would expand the government’s lending programs to help small businesses recover from the coronavirus disease 2019 (COVID-19) pandemic.
The proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act is one of the priority bills mentioned by President Ferdinand R. Marcos, Jr. at his State of the Nation Address (SONA) last month.
During a hearing on Monday, the House Committee on Banks approved the measure, which would consolidate House Bill No. (HB) 1, 685, 3460, and 3700. The measure will be referred to the House Committee on Appropriations for funding, and the Ways and Means panel for the tax provisions.
The GUIDE measure was approved quickly by the House Committee on Banks, since the rules allow the expedited approval of any priority measure that was passed on third reading by the immediately preceding Congress.
HB No. 1, co-authored by House Speaker Ferdinand Martin G. Romualdez, is the refiled version of the GUIDE bill approved by the House on third reading during the 18th Congress. The Senate failed to pass the counterpart measure.
The bill will mandate the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) to expand their credit and rediscounting facilities to affected micro, small, and medium enterprises (MSMEs), and other strategically important companies (SICs).
Under the measure, LANDBANK and DBP would be allocated P7.5 billion and P2.5 billion, respectively, appropriated from the National Treasury, to boost their credit programs.
“Our micro, small and medium enterprises remain struggling to survive the deleterious effects of the pandemic. In view of the foregoing, it is our humble but firm belief that we need to create more enabling environment for financial access for our MSMEs,” Tingog Party-list Rep. Jude A. Acidre, who co-authored HB No. 1, said.
ACT-CIS Party-list Rep. Jeffrey Soriano, who is one of the authors of HB No. 3460, said there is an immediate need to help MSMEs, which comprise 99.5% of business establishments in the Philippines.
“This proposed legislative measure seeks to strengthen the capacity of the government financial institutions through programs and initiatives to be implemented by the Philippine Guarantee Corp., LANDBANK, and DBP. In the provision of much needed assistance in the recovery of our MSMEs, the measure will also grant tax exemptions, registration and transfer fees discounts, and loan and credit accommodation to the aforementioned financial institutions,” Mr. Soriano said.
The GUIDE bill will also raise DBP’s capital stock to P100 billion, from P35 billion.
“We have done well, but the capital base of P35 billion is very much constraining specially as we see the challenges that we have to face… in the restructuring and rescuing the MSMEs,” DBP President and Chief Executive Officer Emmanuel G. Herbosa said during the hearing.
“We hope that our P35-billion authorized capital will finally now be increased to P100 billion. We’re very excited about this and DBP is ready to step to its critical role on MSME recovery,” he added.
The measure will also authorize LANDBANK and DBP to invest in or enter into a joint-venture agreement with a special holding company to rehabilitate SICs.
SICs should be investee companies that have high economic returns or job generation potential in industries such as construction, education, food industry, healthcare, infrastructure, low-cost and socialized housing, manufacturing, power and energy, product distributor/retailer, services, tourism and hospitality, transportation and logistics, and water and sanitation.
The special holding company will be allowed to invest in equities, execute convertible loans or purchase convertible bonds or other securities in SICs. — K.B.Ta-asan
