WITH an overwhelming 282 votes, the House of Representatives on Thursday approved on third and final reading a bill that seeks financing for small businesses, especially those crippled by the coronavirus disease-19 (COVID-19) pandemic and other significant economic challenges of national and international scope.

House Bill (HB) No. 1 was the first legislative proposal introduced by Speaker Martin G. Romualdez.

It is titled, “An Act providing for Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery,” or GUIDE Act.

According to the bill, the operation of micro, small and medium enterprises (MSMEs) has been severely restricted by pandemic-related community quarantine measures.

“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 measure states.

Romualdez’s original co-authors of the proposed GUIDE Act were Senior Majority Leader and Ilocos Norte Rep. Ferdinand Alexander Marcos, and Reps. Yedda Marie K. Romualdez and Jude Acidre of Tingog Party-list.

The list has since expanded to include scores of other House members as co-authors.

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 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.”

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.

The President may increase the bank’s capitalization upon recommended of its board and the concurrence of the secretary of finance.

Land Bank would be mandated to rediscount loans to eligible MSMEs.

The proposed law appropriates the amount of P10 billion for the expanded lending program: P2.5 billion for DPB and P7.5 billion for Land Bank.

The measure creates a joint congressional oversight committee composed of five House members and five senators to oversee its implementation.

The Department of Finance, together with Land Bank, DBP, Bureau of Internal Revenue, Bangko Sentral ng Pilipinas, and the Securities and Exchange Commission would be mandated to issue implementing rules and regulations.