The House of Representatives has approved the first bill filed in the 19th Congress that seeks to expand the lending programs capacity of state-run banks to help micro, small and medium enterprises greatly affected by the pandemic.

Lawmakers in the plenary agreed to pass House Bill 1 or Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery or the GUIDE bill on second reading via voice vote.

The proposed bill is one of the priority legislations outlined by the President in his State of the Nation Address last July, and it's one of the priority measures identified by the Legislative-Executive Development Advisory Council.

It was consolidated in committee with bills introduced by Albay Rep. Joey Salceda, Davao City Rep. Paolo Duterte and Benguet Rep.

"To this end, the government financial institutions are mandated to expand their credit programs in order to assist MSMEs to meet their liquidity needs. In particular, the LBP and DBP are mandated to expand their credit and rediscounting facilities to affected MSMEs in the agriculture, infrastructure, manufacturing, and service industries," the bill read.

By allocating P7.5 billion to the LBP and P2.5 billion to the DBP, or a combined P10 billion, to carry out their respective mandates, the bill would increase the capacity of the LBP and the Development Bank of the Philippines to assist MSMEs and other strategically important companies.

The measure also requires DBP and LBP to rediscount loans and credit accommodations in accordance with applicable prudential standards and government agency regulations.

The GUIDE bill authorizes the President to approve an increase in DBP capitalization based on the recommendation of the DBP Board and the concurrence of the Finance Secretary, up to the amount necessary to achieve the charter's objectives

Gabriela Rep. Arlene Brosas, however, proposed revisions, such as the deletion of the entire Chapter 3 or the section discussing the creation of a special holding company that would serve as the investment vehicle.

The bill authored by House Speaker Ferdinand Martin Romualdez, Ilocos Norte 1st District Rep. Ferdinand Alexander Marcos, and Tingog Reps. Yedda Marie Romualdez and Jude Acidre is expected to be passed on the third and final reading next week before Congress goes on a five-week Christmas break.