THE HOUSE of Representatives approved on final reading a proposed law that will provide state-run banks P10 billion to lend to distressed micro, small, and medium enterprises (MSMEs).
In their plenary session on Tuesday, lawmakers approved House Bill 7749 or the proposed Government Financial Institutions Unified Initiatives (GFI) to Distressed Enterprises for Economic Recovery or GUIDE Act.
If enacted, the GUIDE Act will give government banks Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) funding to expand their loan programs for qualified MSMEs affected by the coronavirus disease 2019 (COVID-19) pandemic.
Some P10 billion will be appropriated from the National Treasury to help boost the unified initiatives of both state-run lenders, broken down into P7.5 billion for LANDBANK and P2.5 billion for DBP.
The measure also authorizes LANDBANK and DBP to invest in or enter a joint venture agreement with a special holding company to rehabilitate Strategically Important Companies (SICs).
SICs should be investee companies that have high economic returns or job generation potential in industries such as construction, education, food industry, healthcare, infrastructure, low-cost and socialized housing, manufacturing, power and energy, product distributor/retailer, services, tourism and hospitality, transportation and logistics, and water and sanitation.
Gabriela Women’s Party Rep. Arlene Brosas said during the session that the passage of this bill does not provide real remedies to affected businesses, especially if the funds allocated to the two banks will only fund loans and not actual financial assistance.
“Bakit natin popondohan pa ang dagdag na puhunan sa mga malalaking korporasyon gayong higit na kailangan ang dagdag na ayuda sa mga manggagawa at mamamayan (Why would we fund the additional funding of big corporations especially now that we need additional funding for aid to workers and citizens)?” she said during her explanation of her negative vote.
Marikina 2nd District Rep. Stella Luz A. Quimbo also was among the lawmakers who voted against the measure, saying the bill does not provide fair competition since it exempts the special holding company from the provisions of the Philippine Competition Act for three years for the acquisition of the assets of the investee company.
“While I understand that such provisions expedites acquisitions of special holding companies for business continuity, I believe that such an objective must be backed by the balanced longer term objective of promoting and preserving market competition,” she said. — Gillian M. Cortez