To help MSMEs, other firms recover from pandemic
THE House committee on banks and financial intermediaries on Tuesday morning approved a consolidated measure, including Speaker Martin G. Romualdez’s House Bill (HB) No. 1 which seeks to expand government’s lending programs to help small businesses throughout the country recover from the coronavirus disease-19 (COVID-19) pandemic.
Manila Rep. Irwin C. Tieng, panel chairman, led the approval of the several measures to strengthen the capacity of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) in providing the needed assistance to micro, small, and medium enterprises (MSMEs), and other strategically important companies.
“There is a motion duly seconded, the bills on GUIDE by virtue of Section 48 of the rules of the House of Representatives are hereby approved. The secretariat is directed to prepare the committee report,” Tieng said, adding that the consolidated measure will be referred to House committees on appropriations and ways and means for funding and tax provision requirements, respectively.
“As a matter of procedure, we have to submit our approved committee report to the appropriations for funding and of course for ways and means for tax provision,” Tieng said.
Romualdez, Representatives Yedda Marie K. Romualdez of party-list group Tingog, presidential son Ferdinand Alexander Marcos of Ilocos Norte and Jude Acidre, also of Tingog, are the principal authors of HB No. 1. Under Rule 10, Section 48, it authorizes the committees to dispose of priority measures already filed and approved on third reading in the immediately preceding Congress.
Rule 10 provides: “In case of bills or resolutions that are identified as priority measures of the House, which were previously filed in the immediately preceding Congress and have already been approved on third reading, the same may be disposed of as matters already reported upon the approval of the members of the committee present, there being a quorum.”
Acidre sponsored the measure. “The pandemic has placed a severe strain on our economy. The previous Congress successfully passed several versions of the Bayanihan to Heal as One Act to cushion the economic impact of the COVID-19. Nevertheless, 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 a more enabling environment for financial access for our MSMEs,” Acidre said.
Some authors of the consolidated measure include Albay Rep. Joey Sarte Salceda, Davao City Rep. Paolo Duterte, Benguet Rep. Eric Go Yap, and others.
Under HB No. 1, entitled, “An Act providing for government financial institutions unified initiatives to distressed enterprises for economic recovery (GUIDE),” it allocates P7.5 billion to Land Bank of the Philippines (LBP) and P2.5 billion to Development Bank of the Philippines (DBP) or a total of P10 billion to carry out their mandates.
“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,” the bill said.
Under the measure, the term MSME “refers to 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.”
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.