THE very first bill, which proposes the expansion of the government’s lending programs for Micro, Small, and Medium-Sized Enterprise (MSMEs) was filed today in the 19th Congress.
House Bill No. 1 or “Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery” or GUIDE Bill authored by Leyte Rep. Ferdinand Martin Romualdez, aims to assist businesses be able to recover from the effects of the COVID-19 pandemic.
Under the GUIDE Bill, the government will allot P10 billion worth of funds – P7.5 billion for Land Bank of the Philippines (LBP) and P2.5 billion for the Development Bank of the Philippines (DBP) for the lending program.
The LBP is also tasked to implement rediscount loans for eligible MSMEs.
The proposed measure added that the two banks may create a special holding company to strengthen the MSMEs and also strategically important industries (SICs) that were severely impacted by the pandemic.
This means that aside from MSMEs, the agriculture, infrastructure, education, health care, tourism, transportation, manufacturing, service industries and others are expected to benefit from the measure once it becomes a law.
The LBP and the DBP also have the optin to invite the private sector to invest in the proposed holding company. However, it must be assured that majority ownership should remain in the two banks until it is able to recover its investment.
Under the House Bill, it also proposes that the LBP, DBP and the holding company be provided tax exemptions, while a joint congressional oversight committee will be formed to monitor its implementation once the proposed bill is enacted into law.