House panel OKs bill providing financial assistance to enterprises
MANILA, Philippines — A special House panel approved Tuesday a substitute bill seeking to provide financial assistance to distressed enterprises through programs and initiatives to be implemented by the Philippine Guarantee Corporation (PGC), Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).
During the online hearing of the Defeat COVID-19 Committee (DCC), lawmakers approved the draft substitute bill of the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act which seeks to extend help to micro, small and medium enterprises (MSMEs) as well as strategically important industries to encourage their continued operations and maintain employment levels.
The measure strengthens the guarantee facility of PGC by increasing the maximum loan guarantee coverage per borrower, reducing guarantee fees, and other similar schemes to benefit MSMEs heavily affected by the COVID-19 pandemic.
Further, the measure expands the loan assistance programs, rediscounting and other credit accommodation facilities of LBP, DBP, Small Business Corporation (SBC) and Agriculture Credit Policy Council (DA-ACPC).
For the LBP, target beneficiaries include those in the agricultural supply chain such as farmers, fisherfolk, traders, suppliers, processors and aggregators. Meanwhile, DBP’s targeted sector include MSMEs engaged in infrastructure, services, service industry, and/or manufacturing business.
The bill also mandates the LBP and the DBP to create a special holding company to be known as Accelerate Recovery to Intensify Solidarity and Equity (ARISE) to reinvigorate strategically important industries experiencing liquidity issues due to the COVID-19 pandemic
Quirino Rep. Junie Cua, who sponsored the measure, said the bill is an “innovative way” of addressing the concerns of the national government in helping the millions of people working in the MSMEs and big strategic companies.
“We are going to capacitate the Land Bank, the DBP as well the Philippine Guarantee Corp. These three financial institutions of the government will have to work together and raise the necessary funding to be able to address the requirements of the MSMEs and the strategic companies impacted by the crisis,” Cua said in his sponsorship speech during the hearing.
“We’re going to do this by requiring them to expand their loan program and for them to be able to expand their loan program, we have to capacitate them by increasing their paid-up capital,” he added.
Cua noted that businesses were affected with the economic impact that the pandemic brought to the country.
“This bill is a simple bill, it’s actually a capacitation of our financial institutions. We propose to appropriate P55 billion among these three institutions. P35 billion will be given to the Land Bank, P15 billion will be given to the DBP and P5 billion will go to the PGC,” Cua said.
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