Senate Proposes Bill to Provide More Loans to Businesses in the Philippines
The Senate filed a bill proposing to extend the capacity of government financial institutions (GFIs) to provide and grant loans to enterprises affected by the COVID-19 pandemic.
Senate Bill No. 1646, also known as the “GFIs Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE),” will cover the Philippine Guarantee Corporation (PGC), Development Bank of the Philippines (DBP), and the Land Bank of the Philippines (LANDBANK) under GFIs.
According to SB No. 1646, GFIs must “expand their credit programs to assist affected MSMEs (micro, small, and medium-sized enterprises) and strategically important industries in meeting their liquidity needs.”
The bill allows the PGC to increase the maximum loan coverage guarantee for every borrower to help MSMEs while at the same time, ease its rules and regulations. It also tasked PGC to prioritize businesses that are severely affected by the pandemic.
Additionally, the bill also tasks LANDBANK and DBP to provide an interest-free loan program to MSMEs, especially in industries such as services, manufacturing, and infrastructure. These loans are payable within 3-5 years.
They may also rediscount loans and other credit accommodations granted by the Small Business Corporation and financial institutions supervised by Bangko Sentral ng Pilipinas (BSP).
The GFIs are also entitled to fee privileges such as 50% of the filing fees for any foreclosure and 50% of the land registration fees, to substitute other applicable fees.
