Bong Go refiles bill to assist pandemic-distressed businesses
Sen. Bong Go has reintroduced Senate Bill 1182 or the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act to strengthen the capacity of government financial institutions to provide assistance to micro, small, and medium enterprises, and other strategically important companies.
“No Filipino should be left behind on the road to full and inclusive economic recovery,” Go said in a statement.
He pointed out that providing timely and sufficient support to MSMEs and SICs is crucial to ensuring a strong economic recovery.
Many businesses in the country have been hit hard by the ongoing pandemic.
“Mas maraming negosyong makakabangon, mas maraming Pilipino ang mabibigyan ng trabaho at kabuhayan. Mas merong sapat na pagkain para sa pamilyang Pilipino at mas maraming mga bata ang makakapag-aral,” Go noted.
To this end, the bill aims to strengthen the capacity of the Land Bank of the Philippines and the Development Bank of the Philippines to provide access to credit and financial assistance to distressed businesses, including MSMEs, SICs and other businesses affected by the pandemic.
Under the proposed measure, Land Bank and DBP are mandated to create a special holding company which shall assist in the rehabilitation of SICs heavily affected by the pandemic.
To ensure that the policies and objectives under the proposed bill are effectively carried out, Land Bank and DBP are further mandated to maintain at least a majority ownership over the special holding company, until such time that the businesses have recovered and the banks have recouped their investments.
The holding company shall be authorized to invest or place funds in equity, execute convertible loans, or purchase convertible bonds and/or other securities, in the SICs.
To ensure that such investments are properly utilized, as well as to ensure the successful rehabilitation of SICs, the measure imposes strict conditions on the investee company such as requiring that the number of employees are 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 Land Bank and DBP are not diluted and 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, Land Bank 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 bill is among the priority measures mentioned by President Bongbong Marcos at his 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. It 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.
OTOP is a government-run program providing assistance for MSMEs and promoting the commodities and products of Filipino towns, cities and regions.
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