Go refiles GUIDE bill

MANILA, Philippines — Senator Bong Go has reintroduced Senate Bill 1182 or the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act in a bid to strengthen the capacity of government financial institutions to provide the needed financial assistance to micro, small and medium enterprises (MSMEs) and other strategically important companies or SICs.

Go stressed that providing timely and sufficient support to MSMEs and SICs is crucial to ensuring a strong economic recovery.

He noted that many businesses in the country were hard hit by the ongoing global health crisis and that the government must step in to provide all necessary assistance for them to fully recover.

“No Filipino should be left behind in our road towards full and inclusive economic recovery,” Go said.

He explained that GUIDE aims to strengthen the capacity of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to provide access to credit and financial assistance by distressed businesses, including MSMEs, SICs and other establishments affected by the pandemic.

Under the proposed measure, the LBP and DBP will create a special holding company, which shall assist in the rehabilitation of SICs heavily affected by the COVID-19 pandemic.

To ensure that the policies and objectives under the proposed bill are effectively carried out, both banks are mandated to maintain at least a majority ownership over the special holding company until such time they have recovered or will be able to recover their investment.

The special holding company of SICs shall be authorized to invest or place funds in equity, execute convertible loans or purchase convertible bonds and/or other securities.

To ensure that investments are properly utilized as well as guarantee the successful rehabilitation of SICs, the measure imposes strict conditions on the investee company, such as requiring that the number of employees is not reduced beyond a certain level, limiting its ability to declare dividends, restricting the increase in salary and other benefits of the board and its senior executive officers and ensuring that investments of LBP and DBP are not diluted and are time bound with a definite exit mechanism.

The bill will also help lower the overall cost of borrowing for MSMEs. Government financial institutions shall be mandated to expand their credit programs in order to assist affected MSMEs in meeting their liquidity needs.

In particular, the LBP and DBP shall expand their loan programs as well as rediscount loans and other credit accommodations to affected MSMEs in the agriculture, infrastructure, service and manufacturing industries.

“MSME support is a critical job-saving intervention as these enterprises hire approximately nine million people or 63 percent of the workforce,” Go pointed out, adding that the proposed GUIDE is among the priority measures mentioned by President Ferdinand Marcos Jr. during the latter’s first State of the Nation Address.

Go has been constantly advocating for sustained government support for MSMEs.

At the height of the pandemic, he was instrumental in the implementation of the Small Business Wage Subsidy program, which provided eligible workers who were unable to work or get paid during the enhanced community quarantine period with two tranches of financial assistance.

The senator has also filed in the 19th Congress a measure institutionalizing the Department of Trade and Industry’s “One Town, One Product” (OTOP) program to help boost recovery and promote innovation among MSMEs.

The OTOP is a government-run program providing assistance for MSMEs and promoting the commodities and products of Filipino towns, cities and regions.