The House of Representatives approved on third and final reading a bill expanding state-run banks’ authority to assist pandemic-hit micro, small and medium enterprises (MSMEs), including infusing at least P107.5 billion additional capital to two state-run banks.
House Bill No. 1 or the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill got 282 affirmative votes on Thursday’s session.
The bill mandates the Development Bank of the Philippines (DBP) and LandBank of the Philippines (LBP) to expand their loan assistance programs to MSMEs engaged in infrastructure, service industry, and/or manufacturing business, as well as grant loans to local government units.
One of the priority legislations of the administration, the GUIDE bill also provides a P100 billion capital stock to DBP to be divided into one billion common shares with a value of P100 per share, which will be fully subscribed by the national government.
Likewise, the bill provides that an amount of P10 billion from the National Treasury will fund the following:
- P2.5 billion as additional paid-up capital of the DBP, for the purposes of lending under the loan assistance program to qualified MSMEs, its rediscounting and other programs
- P7.5 billion as additional paid-up capital of LandBank, for the purposes of lending under the loan assistance program to qualified MSMEs, rediscounting and other programs of LandBank
The measure also requires DBP and LBP to rediscount loans and credit accommodations subject to applicable prudential standards and regulations of government agencies.
It authorizes the President “to approve the increase in capitalization of DBP upon the recommendation of the DBP Board and the concurrence of the Finance Secretary, up to such an amount as may be necessary to attain objectives of this charter.”
The request for assistance under the GUIDE bill, at the minimum, should include:
- schedule of the debtor’s debts and liabilities;
- inventory of the debtor’s assets;
- pre-negotiated voluntary financial rehabilitation plan, including the names of at least three qualified nominees for rehabilitation receiver; and,
- summary of disputed claims against the debtor and a report on the provisioning of funds to account for appropriate payments should any such claims be ruled valid or their amounts adjusted
Tingog party-list representative Jude Acidre, one of the authors of the bill, accepted all the amendments put forward by House Assistant Minority Leader Arlene Brosas of Gabriela party-list.
These include the deletion of provisions on strategically important companies and the entire chapter on Special Holding Company (SHC). The proposal allowing DBP and LandBank to invest in SHC was also removed, as well as the one providing incentives, exemption and privileges for DBP, LandBank and SHC.—LDF, GMA Integrated News
House gives final OK to bill expanding lending aid to MSMEs
Source: Balita News
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