House approves bill to expand financing for small businesses

WITH an overwhelming 282 votes, the House of Representatives on Thursday approved on third and final reading a bill that seeks financing for small businesses, especially those crippled by the COVID-19 pandemic and other significant economic challenges of national and international scope.

House Bill (HB) 1 was the first legislative proposal introduced by Speaker Martin G. Romualdez. The bill is titled, “An Act providing for Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery,” or GUIDE Act.

According to the bill, the operations of micro, small and medium enterprises (MSMEs) have been severely restricted by pandemic-related community quarantine measures.

“Thus, it is essential that these enterprises are given necessary access to credit and financial assistance. It is hereby declared the policy of the State to protect employment and assist distressed enterprises to reinvigorate the economy,” the measure stated.

The authors said the bill would strengthen the capacity of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to provide the needed assistance to MSMEs.

The President may increase the bank’s capitalization upon recommended of its board and the concurrence of the secretary of finance. Land Bank would be mandated to rediscount loans to eligible MSMEs.

The proposed law appropriates the amount of P10 billion for the expanded lending program: P2.5 billion for DPB and P7.5 billion for Land Bank.

The Department of Finance, together with Land Bank, DBP, Bureau of Internal Revenue, Bangko Sentral ng Pilipinas, and the Securities and Exchange Commission would be mandated to issue implementing rules and regulations.