House panel endorses GUIDE bill to plenary
TO provide the needed assistance to micro, small and medium enterprises and other strategically important companies affected by Covid-19, the House Defeat Covid-19 Committee on Tuesday endorsed for plenary approval the economic managersbacked bill seeking to strengthen the capacity of the government financial institutions. This will be done by increasing the paid-up capital of Philippine Guarantee Corp., the Land Bank of the Philippines, and the Development Bank of the Philippines.
House Defeat Covid-19 Committee Chairman and Majority Leader Martin Romualdez said the committee report of the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act (GUIDE) will be transmitted to the plenary for another round of deliberation.
“We really have no choice but to fast-track the approval of this measure if we want to spare millions of jobs threatened by this global pandemic,” said Romualdez.
The chairman of the House Committee on Banks and Financial Intermediaries, Rep. Junie Cua, is also the principal author of the proposed GUIDE. He noted that with the imposition of the quarantine in Luzon, and in several provinces cities and municipalities in Visayas and Mindanao, only private establishments providing basic necessities and essentials services were allowed to remain open.
According to Cua, the bill provides for a total P55-billion appropriation for the three financial institutions.
“This P55 billion—because of the multiplier effect of a peso capital invested in these banks and guarantee corporation and based on empirical study and based on the experience of these banks— can raise a minimum of P600 billion to address the credit needs of MSMES and strategic companies,” he added.
“We feel that this is one creative and innovative way to raise the money without really spending too much or borrowing too much,” Cua added.
Under the bill, the funding includes:
P5 billion for PGC, as paid-up capital for the increase in the subscription of the national government in PGC’S authorized capital stock, to be paid upon the effectivity of the GUIDE Act, with the balance payable from succeeding appropriations;
P35 billion to be allocated to LBP as additional paid-up capital of the government to be used for loans and other specified purposes; and
P15 billion to be allocated to DBP to be likewise applied as additional paid-up capital of the national government in the bank’s authorized capital stock, which shall be increased to P100 billion to absorb such capital infusion.
These funds shall be deemed automatically appropriated pursuant to the Bayanihan to Heal as One Act.
“We are confronted by the crisis at the same time we are restricted, we are limited by the meager resources of our government. This bill proposes a very innovative way of addressing the concern of the national government in helping the millions of people working in MSMES and big strategic compnies,” he said.
“We also reiterate our call for the passage of the E-government Act to make government services accessible online,” says Poe, adding this will establish real-time service and streamline business registration with government agencies, while ensuring transparency of dealings. “To fully implement this when passed, internet connection is crucial,” the senator stressed, noting that both the government and telcos should work double time to give our millions of Filipinos better and cheaper connectivity by the end of the year. We expect them to act with urgency and sense of duty for the sake of our people.”