NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
506
^e?uiie
of fl)?
*22 JUL13 P2:04
RECEIVED BY.
S. No.
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS UNIFIED 
INITIATIVES TO DISTRESSED ENTERPRISES FOR ECONOMIC RECOVERY 
(GUIDE)
EXPLANATORY NOTE
Prior to the onslaught of the COVID-19 pandemic, the Philippines is traversing 
a promising track towards an improved economy. The records of the Philippine 
Statistics Authority (PSA) indicate that the 2022 promise of lifting 6 million Filipinos 
out of poverty was achieved In 2018. Also, the progress in achieving the 10-polnt 
socioeconomic agenda was advancing strongly.
This momentum, however, was stalled by the pandemic. According to the 
National Economic and Development Authority (NEDA), "from consistently strong 
economic growth, GDP contracted by negative 9% in the first semester of 2020 due 
to the stringent quarantine measures." The United Nations Industrial Development 
Organization, in partnership with the Department of Trade and Industry (DTI), 
Rizalino S. Navarro Policy Center for Competitiveness, University of the Philippines 
Institute for Small-Scale Industries, and Association of Development Financing 
Institutions in Asia and the Pacific (ADFIAP) published a study on July 2020 entitled, 
"Assessment of the Socio-Economic Effects of COVID-19 and Containment Measures 
on Philippine Enterprises" which summarized the results of the survey they 
conducted among business firms In the country as follows:


(1) Majority of respondent firms were not in operation during the survey 
period.
(2) For firms that were at least able to fully or partially operate, major 
concerns revolved around broken value chains.
(3) Roughly, 40% reduction in operating hours for fully- and 
partially-operating firms resulted in loss of 50% of employment, and 60% 
reduction in revenue and production volume.
(4) Whether firms were able to operate during the enhanced community 
quarantine (ECQ), and to what extent and efficiency, depended on the 
availability of human resources, and how well the activities within the 
supply chain had been coordinated.
(5) Some of the biggest challenges a higher proportion of firms were 
expecting to face when economic activities resumed after the ECQ 
included (1) cash flow; (2) health and safety of workers; and (3) decline in 
domestic demand / customers.
(6) About a third of respondent firms had business continuity plans (BCPs).
(7) About 75% of firms figured that they would need at most P2 million to 
help in their business recovery.
(8) Firms indicated that they will be needing the support in the areas of (1) 
market and business environment; (2) human resources and 
compensation; and (3) financial aspects to assist them in their business 
recovery.
(9) A higher proportion of firms believed that as far as the "new normal" was 
concerned, there will be changes In marketing activities (e-commerce); 
there will be changes in operations and processes (inventory, distribution, 
etc.); there will be new business regulations; and changes in product lines 
and services.
(10) 
Looking forward and preparing for the "new normal", a higher 
proportion of firms Indicated their interest to look into the following 
standards and technology solutions to help them adapt better to future 
crises: (1) advanced digital and disruptive technologies; (2) e-commerce; 
and (3) quality and safety standards for products and services.


The ''Government Financial Institutions (GFIs) Unified Initiatives to Distressed 
Enterprises for Economic Recovery (GUIDE) Act' aims to strengthen the capacity of 
government financial institutions (GFIs) including the LandBank of the Philippines 
(LBP) and the Development Bank of the Philippines (DBP) to address liquidity and 
solvency problems of micro, small, and medium enterprises (MSMEs) and other 
strategically important industries. It offers financial assistance to these industries 
and loan programs, rediscounting and other credit facilities from LBP, DBP, Small 
Business Corporation (SBC) and Agriculture Credit Policy Council (ACPC). These key 
reform measures are instrumental In supporting a sustainable and robust recovery of 
the country from the ravage of the pandemic.
GUIDE is one of the recommended measures of the government's economic 
experts, including NEDA, as a part of the recovery measures for the country's 
economy.
This measure was introduced by Senator Vicente C. Sotto III in the 18th 
Congress.
In view of the foregoing, the immediate passage of this bill is highly 
recommended.
ION BONG
RAMOpf BONG REVILLA, 3R.


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHIUPPINES 
)
First Regular Session 
)
o[ Mjt ft-:' : fliii'j)
'22 JUL 13 P2 «4
SENATE
506
S. No.
RliCEIVfcO Bi
Introduced by SENATOR RAMON BONG REVILLA, JR.
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 Phiiippines in 
Congress assembied:
1 
Section 1. Short Tide. - This Act shall be known as theGovernment Financial
2 
Institutions (SFIs) Unified Initiatives to Distressed Enterprises for Economic Recovery
3 
(GUIDE) Act'.
4 
Sec. 2. Declaration of Policy. — The Substantial disruption of the economy due
5 
to the community quarantine measures restricted the operation of numerous
6 
businesses.
7 
The State recognizes the role of these businesses composed of micro, small
8 
and medium enterprises (MSMEs) and strategically important companies in providing
9 
employment to the Filipino people and in supporting the Philippine economy. Thus, it
10 
is essential that these enterprises are given necessary access to credit and financial
11 
assistance. It Is hereby declared the policy of the State to protect employment and
12 
assist distressed enterprises in order to reinvigorate the economy.
13 
Sec. 3. Definition of Terms. - As used in this Act:
14 
{a) Agribusiness value chain refers to a set of actors/players, such as
15 
farmers, fisherfolk, traders, suppliers, processors, and aggregators, who
16 
make up the linked sequence of value-added activities undergone by an


1 
agricultural product when converted from raw material to the final form
2 
It Is presented to the consumers;
3 
(b) Micro/ Small and Medium Enterprises (MSME) refers to any business
4 
activity or enterprise engaged in industry, agribusiness, and/or services,
5 
whether single proprietorship, cooperative, partnership or corporation
6 
whose total assets, inclusive of those arising from loans but exclusive of
7 
the land on which the particular business entity's office, plant and
8 
equipment are situated, must have value falling under the following
9 
categories:
10 
micro: 
not more than Php3,000,000
11 
small: 
Php3,000,002 - P15,000,000
12 
medium: 
Phpl5,000,001 - Phpl00,000,000
13 
(c) Senior executive officers refer to top management officials exercising
14 
responsible and critical roles, as may be described further In the rules
15 
and regulations to be issued to implement this Act.
16 
(d) Strategically Important Companies or SICs shall have the meaning
17 
ascribed In Section 9(b) of this Act.
18
19 
CHAPTER I
20 
Development Bank of the Philippines
21 
Sec. 4. Loan Assistance Program of the Development Bank of the Philippines
22 
(DBP). - The DBP shall I expand its loan program for qualified MSMEs affected by the
23 
COVID-19 pandemic under this Act and MSMEs covered on the Republic Act No. 11494
24 
or "The Bayanihan to Recover as One Act": Provided, That such loans shall be granted
25 
in accordance with the rules and regulations to be issued to implement this Act and
26 
the following guidelines:
27 
(a) Eligible MSMEs under this Act should be engaged in Infrastructure,
28 
service industry, and/or manufacturing business; and,
29 
(b)The loans granted hereunder should comply with the applicable
30 
prudential standards and regulations of the BSP.
31 
The DBP should likewise extend loans to local government units (LGUs) subject
32 
to existing rules and regulations.


1 
Sec. 5. DBP Rediscounting and other Programs. - Subject to applicable
2 
prudential standards and regulations of the Bangko Sentral ng Pilipinas (BSP), the DBP
3 
may rediscount loans and other credit accommodations to enterprises enumerated in
4 
Section 4(a) of this Act, granted by BSP-supervised financial Institutions (BSFIs), the
5 
Small Business Corporation (SBC), and those granted pursuant to credit programs of
6 
the Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC) to MSMEs
7 
affected by the COVID-19 pandemic engaged in infrastructure, service industry,
8 
and/or manufacturing business.
9 
The DBP may undertake other similar activities as may be provided under the
10 
rules and regulations to be issued to implement this Act.
11 
Sec. 6. Increase in DBPrs Authorized Capitai Stock. - Section 7 of Executive
12 
Order No. 81, as amended by Republic Act No. 8523, otherwise known as "The 1986
13 
Revised Charter of the Development Bank of the Philippines", as amended, is hereby
14 
further amended to read as follows:
15 
"Section 7. Authorized Capitai Stock-Par Vaiue. - The
16 
capital stock of the Bank shall be [Thirty-five billion pesos
17 
(P35,Q00,0QQ,QQ0-.QQ)] ONE HUNDRED BILLION PESOS
18 
(PHP100/000,000,000.00) to be divided Into [Three hundred
19 
fifty million-(-350,000,000)] ONE BILLION (1,000,000,000)
20 
common shares with par value of One hundred pesos (PIOO.OO)
21 
per share, which shall be fully subscribed by the [ftjNational
22 
[gjGovernmentt:—Upon-the effectivity of this Charter, the
23 
National-Government shall initially subscribe to-One hundred
24 
twenty-five million (125,000,000) common shares of stock worth
25 
Twelve billion five hundred million pesos (P12,50Q,000,QQO:OQ)7
26 
Five billion pesos (P5,000,000,000.00) of which shall bo deemed
27 
paid for by the government and the balance shall bo paid for by
28 
the-government out of the-stock dividends to be declared by the
29 
Bank from its unappropriated rotained earnings: Provided, That
30 
the dividends due the national government pursuant to Ropublte
31 
Act No. 7656 shall first be-paidr]: PROVIDED, THAT THE
32 
PRESIDENT OF THE PHILIPPINES MAY APPROVE THE


1 
INCREASE IN THE CAPITALIZATION OF THE BANK, UPON
2 
THE RECOMMENDATION OF THE BOARD AND THE
3 
CONCURRENCE OF THE SECRETARY OF FINANCE, UP TO
4 
SUCH AN AMOUNT AS MAY BE NECESSARY TO ATTAIN
5 
THE OBJECTIVES OF THIS CHARTER."
6
7 
CHAPTER II
8 
LANDBANK OF THE PHILIPPINES
9 
Sec. 7. Loan Assistance Program of the Land Bank of the Philippines
10 
(LandBank). - The LandBank shall expand its loan program for qualified MSMEs
11 
affected by the COVID-19 pandemic under this Act and those covered under Republic
12 
Act No. 11494 or "The Bayanihan to Recover as One Act": Provided, That such loans
13 
shall be granted in accordance with the rules and regulations that shall be issued to
14 
implement this Act and the following guidelines:
15 
(a) Eligible MSMEs under this Act should be engaged in activities in the
16 
agribusiness value chain; and,
17 
(b)The notes granted hereunder should comply with the applicable
18 
prudential standards and regulations of the BSP.
19 
The LandBank shall likewise extend loans to LCDs subject to existing rules and
20 
regulations.
21 
Sec. 8. LandBank Rediscounting and other Programs. - Subject to applicable
22 
prudential standards and regulations of the BSP, the LandBank may rediscount loans
23 
to eligible MSMEs engaged in activities in the agribusiness value chain granted by
24 
BSFIs, the SBC, and those granted pursuant to credit programs of the DA-ACPC to
25 
MSMEs affected by the COVID-19 pandemic.
26 
The LandBank may undertake other similar activities for purposes of this Act as
27 
may be provided under the implementing rules and regulations to be issued.
28
29 
CHAPTER III
30 
SPECIAL HOLDING COMPANY
31 
Sec. 9. Creation of Investment Vehicle. - To ensure that Strategically
32 
Important Companies (SICs) remain solvent, the LandBank and DBP are hereby


1 
authorized to invest in, or enter into a joint venture agreement to incorporate a special
2 
holding company (the "SHC7) that is a stock corporation to be organized under
3 
Republic Act NO. 11232, otherwise known as "The Revised Corporation Code of the
4 
Philippines," within six (6) months beginning from the date of effectivity of the rules
5 
and regulations of this Act, or effectivity of applicable revenue regulations, whichever
6 
comes later. The establishment, administration, and operation of the SHC shall be
7 
governed by the following principles:
8 
(a) The purpose of the SHC is to rehabilitate SIC affected by the COVID-19
9 
pandemic which are experiencing temporary solvency issues;
10 
(b) SICs are investee companies that are nationally significant, or those with
11 
high economic returns or high employment potential, and which are
12 
engaged in any of the following "strategically Important industries or
13 
sectors," such as, but not limited to, agriculture, construction, education,
14 
food industry, health care, infrastructure, low-cost and socialized
15 
housing, manufacturing, power and energy, product distributor/retailer,
16 
services, tourism and hospitality, transportation and logistics, water and
17 
sanitation, and other industries to be Identified in the rules and
18 
regulations issued to implement this Act: Provided, That an SIC must be
19 
able to demonstrate upstream and downstream linkages to other firms
20 
and/or industries, substantial employment to the community, and exhibit
21 
high degree of process efficiency, cost efficiency, product quality, and
22 
environmental soundness: Provided, further, That an SIC can show proof
23 
of temporary solvency problems due to the pandemic, financial
24 
soundness prior to the pandemic, and credible and sound financial
25 
rehabilitation plan.
26 
(c) Equity participation in the SHC may be offered to, and held by qualified
27 
private investors. Including multilateral companies and lending
28 
institutions, as may be determined by the LandBank and DBP: Provided,
29 
That majority ownership of the total outstanding capital stock in the SHC
30 
shall be held by the LandBank and DBP until such time that they have
31 
recovered or will be able to recover their investment In the SHC;


1 
(d)The LandBank and the DBO shall dispose of their stockholdings in the
2 
SHC to qualified private investors as they may determine. The LandBank
3 
and DBP Shall provide equal opportunity for equity participation in the
4 
SHC to all qualified investors, including multilateral companies and
5 
lending institutions. When private shareholdings in the SHC reaches fifty
6 
percent (50%) of the total outstanding capital stock, the stockholders
7 
thereof shall cause the adoption and registration with the Securities and
8 
Exchange Commission (SEC) of the companies amended articles of
9 
incorporation within three (3) months from such transfer of ownership;
10 
(e)The SHC, as a government-owned and controlled corporation (GOCC).
11 
and the investments of DBP and LandBank therein, should be subject to
12 
the power of the Commission on Audit (COA) to audit and examine
13 
GOCCs and the investments of government in corporations: Provided,
14 
That the audit of the SHC by the COA shall not preclude the SHC from
15 
engaging the services of a private auditing firm when equity participation
16 
in the SHC Is offered to qualified private investors: Provided, further,
17 
That even if the services of the latter are availed of, the audit report of
18 
the COA shall serve as the report for purposes of compliance with audit
19 
requirements as required of a GOCC under applicable law;
20 
Sec. 8. Separability Clause. - If any provision or part hereof is held invalid or
21 
unconstitutional, the remainder of the law or the provision or part not otherwise
22 
affected shall remain valid and subsisting.
23 
Sec. 9. Repealing Clause. - Any law, presidential decree or Issuance, executive
24 
order, letter of instruction, administrative order, rule, or regulation contrary to or
25 
inconsistent with the provisions of this Act are hereby repealed, modified, or amended
26 
accordingly.
27 
Sec. 10. Effectivity. - This Act shall take effect fifteen (15) days after its
28 
publication in the Official Gazette ov in a newspaper of general circulation.
Approved,