The House of Representatives has unanimously approved on third and final reading a bill that seeks financing for small businesses, especially those crippled by the Covid-19 pandemic and other significant economic challenges of national and international scope.
House Bill (HB) No.1, or the proposed Act providing for Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE), received 282 affirmative votes during nominal voting Thursday, Dec. 15.
Depputy Speaker and Davao City 3rd district Rep. Isidro Ungab, the presiding officer during Thursday's plenary session, said there were no negative votes or abstentions.
Introduced by House Speaker and Leyte 1st district Rep. Martin Romualdez, the proposed GUIDE Act was the first ever bill filed in the 19th Congress.
According to the bill, the operation of micro, small and medium enterprises (MSMEs) has been severely restricted by pandemic-related community quarantine measures.
The bill defines MSMEs 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".
“Thus, it is essential that these enterprises are given necessary access to credit and financial assistance. It is hereby declared the policy of the State to protect employment and assist distressed enterprises to reinvigorate the economy,” the bill stated.
The authors said the bill would strengthen the capacity of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to provide the needed assistance to MSMEs.
“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,” they said.
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.
As per the bill, the President may increase the bank’s capitalization upon recommended of its board and the concurrence of the Department of Finance (DOF) secretary. LBP will be mandated to rediscount loans to eligible MSMEs.
The proposed law appropriates a total of P10 billion for the expanded lending program: P2.5 billion from DPB and P7.5 billion from LBP.
Romualdez’s original co-authors of the proposed GUIDE Act are Senior Majority Leader and Ilocos Norte 1st district Rep. Ferdinand Alexander Marcos, and Tingog Party-list Reps. Yedda Marie Romualdez and Jude Acidre.