Manila: On Monday, the House of Representatives passed a bill establishing archipelagic sea lanes (ASLs)…
The House approves a bill to finance small enterprises.
A law to fund small enterprises, particularly those hampered by the coronavirus disease-19 (Covid-19) pandemic and other serious domestic and international economic issues, was passed by the House of Representatives on Thursday during its third and final reading.
Speaker Martin G. Romualdez proposed House Bill No. 1 or the “An Act providing for Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery” (GUIDE Act).
The bill asserts that community quarantine procedures related to the pandemic have significantly hindered the ability of micro, small, and medium-sized businesses (MSMEs) to operate.
“Therefore, it is crucial that small businesses have access to finance and financial support they require. The measure declares, “It is hereby declared the policy of the State to protect employment and aid struggling firms in reviving the economy.
Reps. Yedda Marie K. Romualdez and Jude Acidre of the Tingog Party list were the original co-authors of the proposed GUIDE Act with Senior Majority Leader and Ilocos Norte Representative Ferdinand Alexander Marcos.
The list of co-authors has subsequently grown to include dozens more House members due to the good intentions of the bill and its potential to have a positive impact on the nation’s economy.
The bill, according to its sponsors, would increase the Land Bank of the Philippines and the Development Bank of the Philippines’ (DBP) ability to support MSMEs.
In order to help MSMEs meet their liquidity demands, it is required that government financial institutions expand their credit programs. The LBP (Land Bank of the Philippines) and DBP (Development Bank of the Philippines) in particular are required to increase the availability of their credit and rediscounting facilities to impacted MSMEs in the agriculture, infrastructure, manufacturing, and service sectors, they stated.
MSMEs are described in the bill 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 exceeding P3 million; small, between PHP3 million and PHP15 mill; and micro-enterprise, not exceeding P15 mill.”
The capital stock of DBP is also increased by the GUIDE Act bill from PHP35 billion to PHP100 billion, divided into one billion shares of PHP100 each, to be completely subscribed by the national government.
Upon the board of the bank’s suggestion and with the approval of the secretary of finance, the president may raise the capitalization of the institution.
Loans to qualified MSMEs would be subject to rediscounting by Land Bank.
The proposed act appropriates PHP10 billion for the enlarged lending program, with PHP2.5 billion going to the DPB and PHP7.5 billion to the Land Bank.
Once passed into law, the legislation would establish a joint congressional oversight committee comprised of five members of the House and five members of the Senate to supervise its execution.
The Land Bank, DBP, Bureau of Internal Revenue, Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, and the Department of Finance would all be tasked with issuing the implementing rules and regulations.
Cebuano English Filipino
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