The first measure tabled in the House of Representatives during the 19th Congress seeks to expand government loan programs to micro, small, and medium enterprises (MSMEs) to help them recover from the effects of the COVID-19 pandemic.
The Domestic Bill No. 1 or Government Financial Institutions Unified Initiatives for Distressed Enterprises for Economic Recovery (GUIDE) Bill charges the Land Bank of the Philippines (7.5 billion pesos) and the Development Bank of the Philippines (2.5 billion pesos) to allocate the need for funds for loans.
LBP would also be mandated to rediscount loans to eligible MSMEs.
Leyte representative Ferdinand Martin Romualdez, Tingog party list representatives Yedda Marie Romualdez and Jude Acidre and presidential son and Ilocos Norte representative Ferdinand Alexander Marcos authored the measure.
The GUIDE bill also seeks to increase DBP’s share capital from 35 billion pesos to 100 billion pesos divided into 1 billion shares of 100 pesos each to be fully subscribed by the national government.
The bill authorizes the two government banks to set up a special holding company to further reinvigorate MSMEs and Strategically Important Industries (SCIs) in agriculture, construction, education, manufacturing food, healthcare, infrastructure, social housing, manufacturing, power and energy, commodities distribution, retail, services, tourism and hospitality, transport and logistics, and water and sanitation .
LBP and DBP can invite the private sector to invest in the special holding company (SHC) but they must remain in the majority.
The proposed holding company is to be governed by a board of directors headed by the finance secretary as chairman, with the chairman of LBP DBP, SHC, two independent directors and three directors representing private sector investors as members. A Joint Congressional Oversight Committee will also be created.
In the 18th Congress, a similar proposal was approved by the House of Representatives but did not pass in the Senate.