A bill filed by Leyte Rep. Martin Romualdez is seeking a P10-billion aid to secure jobs on small farms.
The bill also calls for two government financial institutions to expand lending programs to help small businesses throughout the country recover from the COVID-19 pandemic.
House Bill No. 1, entitled, “An Act providing for government financial institutions unified initiatives to distressed enterprises for economic recovery (GUIDE),” allocates P7.5 billion to the Land Bank of the Philippines and P2.5 billion to the Development Bank of the Philippines or a total of P10 billion to carry out their mandates.
Romualdez, House majority leader in the recently concluded 18th Congress, co-authored the measure with Representatives Yedda Marie Romualdez of the Tingog party-list, presidential son Ferdinand Alexander Marcos of Ilocos Norte, and Jude Acidre, also of Tingog.
“The proposed legislative measure seeks to strengthen the capacity of the Land Bank of the Philippines and the Development Bank of the Philippines to provide the needed assistance to micro, small, and medium enterprises (MSMEs), and other strategically important companies,” the bill’s explanatory note read.
“To this end, the government financial institutions are mandated to expand their credit programs in order to assist MSMEs to meet their liquidity needs. In particular, the LBP and DBP are mandated to expand their credit and rediscounting facilities to affected MSMEs in the agriculture, infrastructure, manufacturing, and service industries,” it stated.
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 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 the Department of Finance.
Land Bank would be mandated to rediscount loans to eligible MSMEs. However, to ensure that the policies and objectives under the proposed bill are effectively carried out, the two state banks would maintain majority ownership of the special firm until they have recovered their investment.
The bill grants certain tax exemptions to the two government banks and their holding company.
It creates a joint congressional oversight committee composed of five House members and five senators to oversee its implementation.