Bill seeks to hike paid-up capital of Landbank, DBP

LEYTE Rep. Martin G. Romualdez has filed the first bill in the 19th Congress strengthening the capacity of the government financial institutions by increasing the paid-up capital of the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP).

Romualdez authored House Bill 1, titled “An Act providing for Government Financial Institutions (GFIS) Unified Initiatives to Distressed Enterprises for Economic Recovery, or Guide.” This bill seeks to allocate P7.5 billion to Landbank and P2.5 billion to the DBP, according to the lawmaker.

In the 18th Congress, the bill strengthening the three GFIS was filed by former Quirino Rep. Junie E. Cua. It was approved by the House but failed to pass through the Senate.

“The proposed legislative measure seeks to strengthen the capacity of the Landbank and the DBP to provide the needed assistance to micro, small and medium enterprises (MSMES) and other strategicallyimportant companies (SICS),” the bill’s explanatory note stated.

“To this end, the [GFIS] are mandated to expand their credit programs in order to assist MSMES to meet their liquidity needs. In particular, the [Landbank] and the DBP are mandated to expand their credit and rediscounting facilities to affected MSMES in the agriculture, infrastructure, manufacturing and service industries,” it said.

Under the bill, 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 proposed “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 recommendation of its board and the concurrence of the Secretary of Finance. Landbank would be mandated to rediscount loans to eligible MSMES.