A proposed law that mandates government financial institutions (GFIs) to expand lending activities to micro, small- and medium-sized enterprises (MSMEs) to help them weather the lingering impact of the COVID-19 pandemic has been revived, with proponents citing the continuing need for support.
The committee on banks and financial intermediaries at the House of Representatives, chaired by Manila Rep. Irwin Tieng, approved the refiling of such a bill, intending to prepare a report and present this to the plenary for first reading.
At its first meeting held on Tuesday, the committee considered four proposals for “an act providing for government financial institutions unified initiatives to distressed enterprises for economic recovery.”
These were filed by a group that includes House Speaker Martin Romualdez and another that includes Davao City Rep. Paolo Duterte. There was also a separate version filed by Albay Rep. Joey Salceda and another by Quirino Rep. Midy Cua.
The committee noted that these were basically the same proposal as one that the House passed on third reading in the previous Congress, and which was transmitted to the Senate but “languished” in the Upper Chamber.
The proposed law seeks to strengthen the capacity of Philippine Guarantee Corp. (PGC), Land Bank of the Philippines and the Development Bank of the Philippines (DBP) in order to provide the needed assistance to MSME and “other strategically important companies.”
The rationale is that the onset of the pandemic had prompted the massive shutdown of the domestic economy, adversely affecting critical industries and triggering an economic downturn.
Thus, there is a need for law that is intended to support industries that are critical to economic recovery and maintaining employment levels.
“To this end, [GFIs] are mandated to expand their credit programs in order to assist affected MSMEs to meet their liquiity needs,” the bills state.
The proposal calls for LandBank and DBP to expand their credit facilities to affected MSMEs in the agriculture, infrastructure and manufacturing industries. INQ