Manufacturers group cheer review of PH corporate rehab law
MANILA -An association of local manufacturers is backing the review of the country’s corporate rehabilitation law, citing the need to update it at a time when businesses are likely to seek rehabilitation due to the adverse impact of the pandemic.
The Federation of Philippine Industries (FPI) said they welcomed the congressional review of Republic Act No. 10142 or the Financial Rehabilitation and Insolvency Act (FRIA), a law enacted in 2010 that governs the rehabilitation or liquidation of businesses that have gone into debt.
“We need this review of the efficacy of the country’s corporate rehab law to see the intricacies and learn from actual cases of how companies were successfully resuscitated or not,” FPI chair Jesus Arranza said in a statement.
“We need new investments but we also need a better batting average on rehabilitation cases because this will save us a lot of economic wastage,” he added.
To recall, The House Committee on Banks and Financial Intermediaries led by its chair, Manila 5th District Representative Irwin Tieng, launched an inquiry last March 23 on whether the country’s corporate rehabilitation law has adequately addressed businesses in distress during the health crisis.
Uniwide
During the legislative hearing, lawmakers sought the outcomes of rehabilitation proceedings filed with the Securities and Exchange Commission (SEC) and regular courts in recent years.
The FPI official said he hoped lawmakers would dig deeper into the failed rehabilitation of retail company Uniwide Sales, Inc., which operated Uniwide commercial shopping centers.
“I believe the Uniwide case will be a very good case study and will provide Congress a wealth of information that they will need in introducing revisions to the FRIA, including the restructuring of bank loans and valuation of properties subjected to ‘dacion en pago,’” said Arranza, who was former president of the now defunct retail chain store.
The FPI official said the organization and its member companies were ready to help Congress in preparing a well-crafted law, one which he said would perfect the system and speed up rehabilitation proceedings to prevent further bleeding on the part of troubled companies.
“The FPI members share the view of the lawmakers that there shouldn’t be more failed rehab cases to prevent economic wastage and the loss of jobs due to the closure of businesses. No business is immune to the impact of the pandemic so this inquiry is really timely,” he said.
