The House Committee on Appropriations approved “in principle” on Tuesday the funding provision of the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act, which now seeks to grant additional paid up capital of P7.5 billion and P2.5 billion to the Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) to assist the country’s micro, small, and medium enterprises (MSMEs) unfavorably affected by the COVID-19 crisis.
In a virtual meeting, the House panel gave in to the motion made by Quirino lone District Rep. Junie Cua to approve the substitute measure to House Bill No. 6795, the proposed GUIDE Act, while waiting for the “revised language” of Section 20 or the funding provision, which is expected to be submitted by the Department of Budget and Management (DBM) and the Bureau of Treasury (BTr).
“May I move that in view of the agreement between the Department of Finance, Department of Budget and Management, and our Committee, with respect to the funding requirement of an amount of P10 billion to be shared between Land Bank in the amount of P7.5 billion and P2.5 billion for DBP, this appropriations provision be approved in principle subject to languaging and style,” Cua said.
Cua is the chairperson of the House Committee on Banks and Financial Intermediaries and the main proponent of the GUIDE measure which seeks to grant incentives and exemption privileges to government financial institutions, including the LBP and the DBP, to further strengthen their capacity to financially aid the country’s MSMEs.
National Treasurer Rosalia De Leon and DBM Assistant Secretary Rolly Toledo cited the need to “revise” the language of Section 20 or the appropriations provision of the measure.
During the virtual deliberations presided by panel vice chairperson, Davao de Oro 2nd District Rep. Ruwel Peter Gonzaga, De Leon said they are proposing additional P7.5 billion equity infusion for the Land Bank and P2.5 billion for the DBP.
“So in the proposed GUIDE Bill, formerly the amount for Land Bank that is envisioned as equity infusion is P35 billion. In the Bayanihan 2, together with the standby provisions, what has already been provided under the bill is P27.5 billion. So our intention, Mr Chair, is able fill up the P35 billion that is originally incorporated under GUDE bill for Land Bank, so for this provision in the GUIDE bill , we are proposing an additional P7.5 billion for Land Bank so that will take the total amount of equity infusion to P35 billion as originally intented under the GUIDE bill,” the National Treasurer said.
“In the case of the DBP , the GUIDE bill provides for P15 billion under the Bayanihan 2 and standby provision. There is about P12.5 billion that is earmarked for the DBP, so we just need P2.5 billion under the GUIDE bill for the DBP. Right now, if we add more equity to DBP, we will already reach the remaining authorised capital of just about P15 billion for the DBP,” De Leon said.
She noted that there is also a provision that will increase DBP’s authorised capitalisation to P100 billion which the BTr also supports.
“As for Philippine Guarantee [Corporation], the P5 billion that is already incorporated in the GUIDE bill has already been provided under the Bayanihan 2 bill, so there is no need for additional equity infusion for Phil Guarantee under the GUIDE bill,” she said.
Toledo said since the additional paid up capital of PGC amounting to P5 billion was included in the Bayanihan 2, there is no need for the panel to include it in the GUIDE Bill.
“This seems not necessary anymore, we really have to delete this one given the fact that it is already provided in the Bayanihan 2,” he said.
De Leon and Toledo committed to the panel to submit the revised language of the appropriations provision of the bill on Tuesday, August 25.