NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 411
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72 JUL12 P4 51
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Introduced by SENATOR IMEE R. MARCOS
AN ACT PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS 
UNIFIED INITIATIVES TO DISTRESSED ENTERPRISES FOR ECONOMIC
RECOVERY
(GUIDE)
EXPLANATORY NOTE
Article II, Section 20 of the 1987 Constitution provides that, " The State 
recognizes the indispensable roie of the private sector, encourages private 
enterprise, and provides incentives to needed investments."
In order to contain the spread of the 2019 Coronavirus Disease (COVID-19) 
across the country, the National Government enforced a massive shutdown of 
economic activities, which adversely affected the economy, triggering an economic 
downturn. With the imposition of enhanced community quarantine in Luzon, and in 
several provinces, cities, and municipalities in Visayas and Mindanao, only private 
establishments providing basic necessities and essential services were allowed to 
remain open.
Based on the latest available data published by the Philippine Statistics Authority, 
a total of 957,260 business enterprises operates in the Philippines as of 2020. This is 
lower than the 1,003,111 business enterprises recorded as operating in the Philippines 
in 2018. Micro, small, and medium enterprises (MSMEs) account for 99.51% (952,969) 
of these recorded businesses. Micro enterprises constitute 88.77% (850,127) of total 
MSME establishments, followed by small enterprises at 10.25% (98,126) and medium 
enterprises at 0.49% (4,716).
The top five (5) industry sectors according to the number of MSMEs in 2020 
were: 1) Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 
(445,386); (2) Accommodation and Food Service Activities (134,046); (3) 
Manufacturing (110,916); (4) Other Service Activities (62,376); and (5) Financial and


Insurance Activities (45,558). These industries accounted for about 83.77% of the 
total number of MSME establishments. Together, these MSMEs generated a total of 
5.38 million jobs or 62.66% of the country's total employment. All these sectors were 
hard hit by the lockdown, as most of them fall under non-basic goods and services. 
In particular, accommodation and food service is strongly linked to the tourism 
industry, which suffered due to a lack of tourist activity.
However, MSMEs are not the only affected sector in the economy. In 2020, large 
enterprises generated 3.2 million jobs or 37.34% of the country's overall employment. 
Enterprises, whether MSMEs or large enterprises, were heavily impacted by the 
disruption in travel and transport of goods and services because of the COVID-19 
outbreak. Some of these enterprises are strategically important to economic recovery 
and would require financial assistance in order to ensure their continued viability.
As such, government financial institutions must expand their credit programs to 
assist affected MSMEs and strategically important industries in meeting their liquidity 
needs. The Land Bank of the Philippines (LBP) and the Development Bank of the 
Philippines (DBP) need to expand their credit and rediscounting facilities to affected 
MSMEs and strategically important enterprises in the agriculture, infrastructure, and 
manufacturing industries. The Philippine Guarantee Corporation (PGC) also needs to 
expand Its credit guarantee facilities to MSMEs as well, to incentivize the private sector 
in lending money to distressed MSMEs.
The proposed measure seeks to strengthen the capacity of the following 
Government Financial Institutions, namely the PGC, the LBP, and the DBP, in order to 
provide the needed assistance to MSMEs and other strategically important companies.
Considering the state of the economy and the urgent need for assistance of 
MSMEs and other strategically important companies, the approval of this measure is 
earnestly sought.
h
MARCOS


NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 411
of t'i-:
•22 JUL 12 P4 51
rixh;vqbv.
Introduced by SENATOR IMEE R. MARCOS
AN ACT PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS 
UNIFIED INITIATIVES TO DISTRESSED ENTERPRISES FOR ECONOMIC
RECOVERY(GUIDE)
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION 1. Tide. — This Act shall be known as the "Government Financial
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Institutions (GFIs) Unified Initiatives to Distressed Enterprises for Economic Reco very
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(GUIDE) Act"
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SEC. 2. Declaration of Policy. - It is hereby declared the policy of the state to
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protect employment and assist distressed enterprises to reinvigorate the economy.
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The State recognizes the role of these businesses composed of micro, small and
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medium enterprises (MSMEs) and strategically important companies in providing
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employment to the Filipino people and in supporting the Philippine economy. Thus, it
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is essential that these enterprises are given necessary access to credit and financial
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assistance.
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SEC. 3. Definition of Terms. - As used in this Act:
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(a)Agribusiness value chain refers to a set of actors/players, such as farmers,
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fisherfolk, traders, suppliers, processors, and aggregators, who make up the
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linked sequence of value-adding activities undergone by an agricultural product
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when converted from raw material to the final form it is presented to the
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consumers;
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(b) Community Quarantine (CQ) refers to the enhanced community quarantine
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imposed in the entire Luzon area under Presidential Proclamation No. 929 dated
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16 March 2020, as may be extended or modified pursuant to such other laws.


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presidential proclamations or executive orders that may be subsequently issued 
or promulgated for the purpose of containing the spread of COVID-19;
(c) Critically impacted businesses refer to non-essential businesses that have been 
directly and adversely impacted by the COVID-19 outbreak such that (i) their 
liabilities have become more than their assets, or (ii) they have experienced at 
least a [50%] decline in gross receipts for at least one calendar quarter, and in 
either instance, are generally unable to pay or perform their obligations as they 
fall due in the ordinary course of business, as a result of the COVID-19 
outbreak. 3 For purposes of this Act, Critically-Impacted Business shall include 
the air transport industry, tourism industry, and export-import industry, but 
shall exclude banks and other financial institutions under the supervision of the 
Bangko Sentral ng Pilipinas (BSP);
(d) Micro, Small and Medium Enterprises (MSMEs) refer to any business activity or 
enterprise engaged In industry, agribusiness and/or services, whether single 
proprietorship, cooperative, partnership or corporation whose total assets, 
inclusive of those arising from loans but exclusive of the land on which the 
particular business entity's office, plant and equipment are situated, must have 
value falling under the following categories:
Micro
Small
Medium
not more than Php3,000,000.00 
Php3,000,000.00 - Phpl5,000,000.00 
Phl5,000,000.00 - PhplOO,000,000.00
("e/Non-essential businesses refer to refer to business entities engaged in 
businesses which are not allowed to operate during the CQ under applicable 
laws, presidential proclamations or executive orders issued or promulgated for 
the purpose of containing the spread of COVID-19. The term excludes business 
entities allowed to operate during CQ such as those related to (i) the production 
and sale of goods, or provision of services related to food, medicine, health 
supplies, such as public markets, supermarkets, groceries, convenience stores, 
hospitals, medical clinics, pharmacies, and drug stores, (ii) food preparation 
and delivery services, water refilling stations, manufacturing and processing 
plants of basic food products and medicines, (iii) banks and financial institutions 
under the supervision of the BSP, and (iv) utility services involving power, 
energy, water and telecommunications;


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(f) Senior executive officers refer to top management officials exercising 
responsible and critical roles, as may be determined in the implementing rules 
and regulations.
CHAPTER 1
Philippine Guarantee Corporation
SEC. 4. Loan Guarantee Expansion by PGC. - To ensure that non-essential 
businesses are able to fulfill their loan obligations, whether existing, outstanding or 
new loans, to banks, lending or financing institutions, and to help strengthen the 
liquidity and financial position of these non-essential businesses towards expediting 
the country's economic recovery, the Philippine Guarantee Corporation (PGC) shall:
a. Issue an expanded government guarantee program for non-essential businesses 
by increasing the maximum loan guarantee coverage per borrower, widening the 
coverage of guarantees to loans provided by non-bank financial institutions and 
lending and financing companies supervised by the Securities and Exchange 
Commission (SEC), reducing eligibility requirements and guarantee fees, waiving 
the right of excussion under the guarantee, relaxing the guidelines on claims by 
allowing lenders to call on the guarantee when there is an occurrence of payment 
default, and any other measures necessary to give non-essential businesses and 
MSME-h access to better terms of credit.
b. Ease its current rules and regulations and give preference to critically impacted 
businesses and MSME, including those in the informal sector, in issuing 
government guarantees to help achieve the policy objectives of this Act.
' c. PGC is mandated to implement a loan portfolio guarantee scheme whereby it 
can guarantee a specified loan portfolio of partner financial institutions which 
cover eligible MSME loans subject to the criteria set under the Implementing 
Rules and Regulations. The criteria for accrediting partner financial institutions 
shall likewise be stipulated therein.
For the efficient and faster implementation of the Section, the PGC may require 
assistance, such as facilities and personnel resources, from other government financial 
institutions. The PGC shall also implement measures aimed at the digital 
transformation of its guarantee application and enrollment process. The PGC shall 
coordinate with the DICT, Bangko Sentral ng Pilipinas (BSP), and solicit assistance 
from the private sector for the proper implementation of this Section. The guarantee 
program of PGC should meet the applicable standards and regulations of the BSP.


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SEC 5. Trust Fund of PGC - For the implementation of Section 4 hereof, a 
trust fund in the amount of Twenty Billion Pesos (PhP20/000,000,000.00) is hereby 
established. The PGC may retain the guarantee fee from loans as administrative fee.
The PGC may process and grant loan guarantees to qualified businesses within 
a period of three (3) years from the effectivity of this Act unless the President of the 
Philippines extends it for a period of not more than three (3) years. Upon the maturity 
of all the loans, the PGC shall start to wind up its activities, which shall be completed 
within a period of two (2) years. The remaining amount of the fund shall be returned 
to the National Treasury.
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CHAPTER 2
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Development Bank of the Philippines
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SEC. 6. DBP Loan Assistance Program. - The Development Bank of the
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Philippines (DBP) shall introduce an interest-free loan program available to MSMEs to
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assist and encourage them to continue investing in their businesses: Provided, That
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the interest-free loans shall be granted in accordance with the following guidelines
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and such other conditions as may be imposed under the implementing rules that will
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be issued by the Department of Finance (DOF) and the BSP:
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(a) The loan shall be payable within three (3) to five (5) years: Provided, further,
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That priority shall be given to infrastructure, services, and manufacturing
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business.
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(b)The loans to eligible MSMEs should meet the applicable standards and
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regulations of the BSP.
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Notwithstanding the foregoing, the President of the Philippines shall have the
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power to (i) declare moratorium on the payment of loans of MSME; (ii) make available
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emergency loans to MSMEs in critically-impacted businesses for additional capital
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outlay under this Section; and (iii) ease regulations to ensure that MSMEs have
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facilitated access to the loan facility provided herein.
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SEC. 7. DBP Rediscounting and other Programs. - Subject to applicable
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standards and regulations of the BSP, DBP may rediscount loans and other credit
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accommodations to enterprises enumerated in Section 6(a) above granted by BSP-
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supervised Financial Institutions (BSFIs), Small Business Corporation (SBC), and those
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granted pursuant to credit programs of the Department of Agriculture Agricultural
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Credit Policy Council (DA-ACPC) to MSMEs affected by the Coronavirus Disease 2019


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(COVID-19) pandemic engaged in infrastructure, service industry, and/or
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manufacturing business.
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DBP may undertake other similar activities for purposes of this Act as may be
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provided under the implementing rules and regulations to be issued.
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SEC. 8. Trust Fund of DBP. - For the implementation of Chapters 2 and 4 
hereof, a trust fund in the amount of Fifteen Billion Pesos (PhP15,000,000,000.00) is 
hereby established. The DBP may retain the amount equivalent to one per centum 
(1%) of collections from loans as administrative fee.
The DBP may process and grant loans and rediscounting to qualified businesses 
within a period of three (3) years from the effectivity of this Act unless the President 
of the Philippines extends it for a period of not more than three (3) years. Upon the 
maturity of all the loans, the DBP shall start to wind up its activities, which shall be 
completed within a period of two (2) years. The remaining amount of the fund shall 
be returned to the National Treasury.
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CHAPTER 3
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Land Bank of the Philippines
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SEC. 9. LBP Loan Assistance Program. -The Land Bank of the Philippines
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(LBP) shall introduce an interest-free loan program available to MSMEs engaged in
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activities in the agribusiness value chain encourage them to continue investing in their
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businesses: Provided, That the interest-free loans shall be granted in accordance with
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the following guidelines and such other conditions as may be imposed under the
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implementing rules that will be issued by the DOF and the BSP:
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(a) The loan shall be payable within three (3) to five (5) years: Provided, further,
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That priority shall be given to agri-fishery businesses, and non-essential
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businesses that are small and medium enterprises.
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(b) The loans to eligible MSMEs should meet the applicable standards and
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regulations of the BSP.
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Notwithstanding the foregoing, the President of the Philippines shall have the
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power to (i) declare moratorium on the payment of loans of MSME; (ii) make available
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emergency loans to MSME in critically-impacted businesses for additional capital outlay
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under this Section; and (iii) ease regulations to ensure that MSME have facilitated
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access to the loan facility provided herein.


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SEC. 10. LBP Rediscounting and other Programs. - Subject to applicable 
standards and regulations of the BSP, LBP may rediscount loans to eligible MSMEs 
engaged in activities in the agribusiness value chain granted by BSFIs, SBC, and those 
granted pursuant to credit programs of the DA-ACPC to MSMEs affected by the COVID- 
19 pandemic.
LBP may undertake other similar activities for purposes of this Act as may be 
provided under the implementing rules and regulations to be issued.
SEC. 11. Trust Fund of LBP. - For the implementation of Chapters 3 and 4 
hereof, a trust fund in the amount of Thirty-Five Billion Pesos (PhP35,000,000,000.00) 
is hereby established. The LBP may retain the amount equivalent to one per centum 
(1%) of collections from loans as administrative fee.
The LBP may process and grant loans and rediscounting to qualified businesses 
within a period of three (3) years from the effectivity of this Act unless the President 
of the Philippines extends it for a period of not more than three (3) years. Upon the 
maturity of all the loans, the DBP shall start to wind up its activities, which shall be 
completed within a period of two (2) years. The remaining amount of the fund shall 
be returned to the National Treasury.
CHAPTER 4
Strategically Important Companies
SEC. 12. Loans to Strategicaiiy Important Companies. - To ensure that 
strategically important companies remain solvent, LBP and DBP are hereby authorized 
to offer interest-free loans to facilitate the rehabilitation of strategically important 
companies affected by the COVID-19 pandemic which are experiencing solvency 
issues, such as those with considerable impact on the economy including those from 
the agriculture, infrastructure, service industry, and manufacturing industries and 
other industries to be identified in the implementing rules and regulations, subject to 
the following conditions:
(a) The debtor company must not reduce the number of employees beyond 
the percentage prescribed by the loaning institution, as may be determined 
in the implementing rules and regulations;
(b) The debtor company shall not, without prior authority from the loaning 
institution, be allowed to Issue stock dividends and repurchases during the 
term of the loan;


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(c) The debtor company shall not issue cash dividends during the term of the
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loan;
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(d) The debtor company must not increase the salaries, benefits and other
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forms of remuneration of its senior executive officers and members of its
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board;
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(e) The debtor company shall not provide or grant senior executive officers and
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members of its board separation pay or retirement pay: Provided, That any
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amount received by the senior executive officers and members of the board
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which is in violation of the foregoing shall be returned;
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(f) The debtor company shall not incur irregular, unnecessary, excessive,
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extravagant or unconscionable expenditures such as entertainment,
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events, office/facility renovations, aviation/transportation services and
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other activities.
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CHAPTER 5
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Incentives and Exemption Privileges of DBP and LBP,
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SEC. 13. Tax Exemptions and Fee Privileges. -Any existing law to the contrary
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notwithstanding and in order to ensure the effective implementation of the purposes
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of this Act, the following transactions of DBP, LBP, shall be exempt from documentary
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stamp tax, capital gains tax, creditable withholding income tax, value-added tax, gross
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receipts tax, and such other taxes that may be imposed under Republic Act No. 8424,
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as amended, or the "National Internal Revenue Code of 1997," whichever is applicable
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pursuant to the regulations to be issued by the DOF, upon the recommendation of the
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Bureau of Internal Revenue (BIR):
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(a) Loan Assistance Program, Rediscounting, and other Programs of DBP and
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LBP under Chapters 2 and 3 of this Act, respectively, including dation in
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payment {dacion en pagd) by the borrower or by a third party in favor of
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DBP and LBP.
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The abovementioned transfers shall also be subject to the following, in lieu of
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the applicable fees:
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(a) Fifty percent (50%) of the filing fees for any foreclosure initiated by DBP 
and LBP in relation to Loan Assistance and Rediscounting Programs as 
prescribed by the Rules of Court; and


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(b) Fifty percent (50%) of the land registration fees prescribed under the
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existing circulars of the LRA.
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All sales or transfers of rediscounted loans/other credit accommodations,
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including transfers by way of dation in paymentby the borrower or by a third party to
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DBP and LBPshall be entitled to the privileges enumerated herein for a period of not
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more than three (3) years from the date of effectivity of the applicable implementing
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ruies and regulations or of the applicable revenue regulations, whichever comes later:
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Provided, That the Secretary of Finance may extend such period by a maximum of
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three (3) years.
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CHAPTER 6
Miscellaneous Provisions
SEC. 14. Appropriations. - The amount of Seventy Biliion Pesos (PhP 
70,000,000,000.00) is hereby appropriated from the funds in the National Treasury 
not otherwise appropriated to implement the provisions of this Act.
SEC. 15. Impiementing Ruies and Regulations. - Within thirty (30) days from 
the effectivity of this Act, the DOF, acting as chairperson, the BIR, the BSP, the PGC, 
the DBP, and the LBP shall jointly promulgate the necessary rules and regulations for 
the effective implementation of this Act: Provided, That the DOF may call upon any 
agency to provide information or assistance in the drafting of the rules and 
regulations: Provided, Further, That within thirty (30) days from the effectivity of this 
Act, the DOF, upon recommendation of the BIR, shall promulgate the revenue 
regulations impiementing the fiscal incentives under this Act.
SEC. 16. Oversight Committee. -There is hereby created a Joint Congressional 
Oversight Committee (JCOC) to oversee, monitor, and evaluate the implementation of 
this Act. The JCOC shall be composed of five (5) members each from the House of 
Representatives and from the Senate. The JCOC shaii be co-chaired by the 
Chairpersons of the House Committee on Banks and Financial Intermediaries and the 
Senate Committee on Banks, Financiai Institutions and Currencies, with the Senate 
and House of Representatives Chairpersons of the Committees on Economic Affairs, 
Trade, Commerce and Entrepreneurship, Cooperatives, and one member each from 
the minority as members.
SEC. 17. Reports. -The PGC, LBP, and DBP shall submit reports to the DOF, 
DTI, and the JCOC regarding the implementation of this Act.
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CHAPTER 7 
Final Provisions
SEC. 18. Separability Clause. - If, for any reason or reasons, any part or 
provision of this Act shall be declared as unconstitutional or invalid, the other parts or 
provisions hereof which are not affected thereby shall continue to be in full force and 
effect.
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SEC. 19. Repealing Clause. - All provisions of existing laws, orders, rules and
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regulations or parts thereof which are in conflict or inconsistent with the provisions of
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this Act are hereby repealed, amended, or modified accordingly.
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SEC. 20. Effectivity. - This Act shall take effect immediately upon its 
publication in the Official Gazette or in a newspaper of general circulation in the 
Philippines.
Approved,