NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE 
S. B. No. 1640
Ornate
filer of tl)f et.iiyj
23 JWI-9 P2 *42
UmveDiir;
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS 
UNIFIED INITIATIVES TO DISTRESSED ENTERPRISES FOR 
ECONOMIC RECOVERY (GUIDE), APPROPRIATING FUNDS 
THEREFOR AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Asian Development Bank, in a paper published in 2021, described micro, 
small, and medium enterprises (MSMEs) as the backbone of the national economy, 
accounting for 99.5% of all enterprises in the country and employing 63.2% of the labor 
force as of end-2018. Despite this, however, they remain vulnerable to external 
shocks, as exhibited by the impacts of the COVID-19 pandemic on the sector. The 
same paper examined the initial one-month impact of the lockdowns on MSMEs and 
found that 73.1% were forced to close their business a few weeks after the outbreak 
and lockdown measures were implemented. Only 2.3% of MSMEs on average 
reported no change in the business environment for the same period. Further, 59.9% 
of microenterprises has no sales while 61.7% reported no revenues.1
The latest data from the Philippine Statistics Authority and the Department of 
Trade and Industry show that as of 2021, of the total 1,080,810 business enterprises 
operating in the country, 1,076,279 (99.58%) are MSMEs. Of this total number of 
MSMEs, 90.54% are microenterprises.2
Asian Development Bank. Shinozaki, S. and Rao, L. COVID-19 Impact on MSMEs Under the 
Lockdown: Evidence from a Rapid Survey in the Philippines. Published in February 2021. Available 
at https://vww.adb.ora/sites/default/files/publication/677321/adbi-wp1216.pdf (Accessed on 4 
November 2022).
DTI. 2021 MSME Statistics. Available at https://www.dti.aov.ph/resources/msme-statistics/ 
(Accessed on 4 November 2022).
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MSMEs generated a total of 5,461,731 jobs or 64.67% of the country’s total 
employment. The micro enterprises produced the biggest share (32.46%) closely 
followed by small enterprises (25.08%), while medium enterprises were far behind at 
7.12%.3
The COVID-19 pandemic exposed the vulnerabilities of our existing programs 
and policies in times of emergencies of this scale. MSMEs, which bore the brunt of the 
COVID-19 pandemic, required the government’s assistance to ensure their continued 
viability, provide more jobs to Filipinos, and contribute to the country’s economic 
recovery.
Drawing from the lessons of the COVID-19 pandemic, this proposed measure 
seeks to assist distressed enterprises during man-made and natural disasters and 
economic recessions, through improved access to credit and financial assistance. It 
expands the credit programs of the Development Bank of the Philippines and the Land 
Bank of the Philippines to meet the capital needs of MSMEs as well as other 
strategically important companies. To ensure that MSMEs are able to fulfill their loan 
obligations, the Philippine Guarantee Corporation is also mandated to expand its 
guarantee program and ease its current rules and regulations and give preference to 
critically impacted businesses and MSMEs.
To put in place an immediate and effective response that would cushion the 
economic impact and reduce the anxieties and vulnerabilities of our people during 
extraordinary times of emergency, the passage of this measure is earnestly sought.
JOEl/yiLLANUEVi
3 Ibid.


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE
Senate Bill No. 1640
o( tl)p t, rtarjp
23 JAM “9 P2 ‘*43
RECSJVE0 BV
Introduced by SENATOR JOEL VILLANUEVA
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AN ACT
PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS 
UNIFIED INITIATIVES TO DISTRESSED ENTERPRISES FOR 
ECONOMIC RECOVERY (GUIDE), APPROPRIATING FUNDS 
THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
SECTION 1. Title. - This Act shall be known as the “Government Financial 
Institutions Unified Initiatives to Distress Enterprises for Economic Recovery (GUIDE) 
Act.”
SEC. 2. Declaration of Policy. - The State recognizes the indispensable role of 
micro, small, and medium enterprises (MSMEs) and strategically important companies 
(SICs) in providing employment to the Filipino people and in supporting the Philippine 
economy.
Natural and man-made disasters, health emergencies, pandemics, and 
recessions have far-reaching effects on micro, small, and medium enterprises 
(MSMEs). In the event they occur, it is essential that the State is able to immediately 
and effectively provide support and assistance and grant MSMEs access to affordable 
credit as the sector recovers and weathers economic shocks. Thus, it is hereby 
declared the policy of the State to preserve and continuously spur employment and 
the development of enterprises towards continuous and lasting growth.
Towards this end, the State shall seek to;
(a) 
Strengthen the Development Bank of the Philippines (DBP) and the Land 
Bank of the Philippines (Land Bank) to enable them to fulfill their mandate 
under this Act and their respective charters: and
(b) 
Provide the necessary support and assistance to eligible MSMEs, as 
defined under Republic Act No. 9501 or the “Magna Carta for Micro, Small,


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and Medium Enterprises,” to further lower their costs of borrowing, and 
encourage them to continue their operations.
SEC. 3. Coverage. - This Act shall apply to MSMEs that have been directly and 
adversely impacted during a natural or man-made disaster, economic recession, 
public health emergency, or such other emergencies of national scale that may be 
declared by the President of the Philippines from time to time: Provided, That (1) their 
liabilities have become more than their assets, (2) they have experienced at least a 
fifty percent (50%) decline in gross receipts for at least one calendar quarter, or (3) 
they are not allowed to operate during said emergency pursuant to applicable laws, 
presidential proclamation, or executive orders issued or promulgated, and under any 
of these instances, are generally unable to pay or perform their obligations as they fall 
in the ordinary course of business as a result of the declared emergency.
CHAPTER 1
Philippine Guarantee Corporation (PGC)
SEC. 4. Loan Guarantee Expansion by PGC. - To ensure that qualified 
MSMEs are able to fulfill their loan obligations, whether existing, outstanding, or new 
loans, to banks, lending, or financial institutions, and to help strengthen the liquidity 
and financial position of these qualified MSMEs towards expediting the country’s 
economic recovery, the PGC shall;
(a) 
Issue an expanded government guarantee program for qualified MSMEs 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 ofexcussion under the 
guarantee, relaxing the guidelines on claims by allowing lenders to call on 
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 measure necessary to give MSMEs access to better terms of credit;
(b) 
Ease its current rules and regulations and give preference to MSMEs, 
including those in the informal sector, in issuing government guarantees to 
help achieve the policy objectives of this Act; and
(c) 
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 of this Act. The criteria for accrediting partner financial 
institutions shall likewise be stipulated therein.
For the efficient and faster implementation of this 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 Department of Information and Communications Technology 
(DICT) and the Bangko Sentral ng Pilipinas (BSP) and may seek the assistance of the


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private sector for the proper implementation of this Section. The guarantee program 
of the PGC shall, at all times, meet the applicable standards and regulations of the 
BSP.
SEC. 5. Trust Fund of the PGC. - For the implementation of Section 4 of this 
Act, a trust fund in the amount of Twenty Billion Pesos (PhP20,000,000,000.00) is 
hereby established. The PGC may retain the amount equivalent to one percent (1%) 
of total guarantee fees collected as administrative fee.
The PGC may process and grant loan guarantees to qualified businesses within 
a period of two (2) years from the declaration of a national emergency by the President 
of the Philippines in view of a natural or man-made disaster or an economic recession 
unless the President extends it for a period of not more than two (2) years.
The remaining amount of the fund and the amounts already paid for, can be 
further used in the event of any natural or man-made disasters covered under this Act.
CHAPTER 2
Development Bank of the Philippines (DBP)
SEC. 6. DBP Loan Assistance Program. - The DBP shall introduce an interest- 
free loan program available to MSMEs to assist and encourage them to continue 
investing in their businesses: Provided, That the interest-free loans shall be granted in 
accordance with the following guidelines and such other conditions as may be 
imposed under the implementing rules to be issued by the Department of Finance 
(DOF) and the BSP, in consultation with relevant stakeholders:
(a) 
The loan shall be payable within three (3) to five (5) years: Provided, further, 
That priority shall be given to infrastructure, services, and manufacturing 
businesses: and
(b) 
The loans to eligible MSMEs should meet the applicable standards and 
regulations of the BSP.
Notwithstanding the foregoing, the President of the Philippines shall have the 
power to (i) declare moratorium on the payment of loans of MSMEs; (ii) make available 
emergency loans to MSMEs for additional capital outlay under this Section; and (iii) 
ease regulations to ensure that MSMEs have facilitated access to the loan facility 
provided herein.
SEC. 7. DBP Rediscounting and Other Programs. - Subject to applicable 
standards and regulations of the BSP, DBP may rediscount loans and other credit 
accommodations granted by BSP-supervised Financial Institutions (BSFIs), Small 
Business Corporation (SBCorp), and those granted pursuant to credit programs of the 
Department of Agriculture’s (DA) Agricultural Credit Policy Council (ACPC) to affected 
MSMEs engaged in infrastructure, service industry, and/or manufacturing businesses.
The DBP may undertake other similar activities for purposes of this Act as may 
be provided under its Implementing Rules and Regulations.


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SEC. 8. Trust Fund of the DBF. - For the implementation of Chapters 6 and 7 
of this Act, 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 percent (1 %) 
of collections from loans as administrative fee.
The DBP may process and grant loans and rediscounting to qualified businesses 
within a period of two (2) years from the declaration of a national emergency by the 
President of the Philippines in view of a natural or man-made disaster or an economic 
recession unless the President extends it for a period of not more than two (2) years.
The remaining amount of the fund and the loan amounts already paid for, can be 
further used in the event of any natural or man-made disasters covered under this Act.
CHAPTER 3
Land Bank of the Philippines (LBP)
SEC. 9. LBP Loan Assistance Program. - The LBP shall introduce an interest- 
free loan program available to MSMEs engaged in activities in the agribusiness value 
chain to encourage them to continue investing in their businesses: Provided, That the 
interest-free loans shall be granted in accordance with the following guidelines and 
such other conditions as may be imposed under the implementing rules that will be 
issued by the DOF and the BSP:
(a) 
The loan shall be payable within three (3) to five (5) years: Provided, further, 
That priority shall be given to agri-fishery businesses and qualified small 
and medium enterprises; and
(b) 
The loans to eligible MSMEs should meet the applicable standards and 
regulations of the BSP.
Notwithstanding the foregoing, the President of the Philippines shall have the 
power to (i) declare moratorium on the payment of loans of MSMEs; (ii) make available 
emergency loans to MSMEs for additional capital outlay under this Section; and (iii) 
ease regulations to ensure that MSMEs have facilitated access to the loan facility 
provided herein.
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 BSPFIs, SBCorp, and 
those granted pursuant to credit programs of the DA-ACPC to affected MSMEs.
The LBP may undertake other similar activities for purposes of this Act as may 
be provided under its Implementing Rules and Regulations.
SEC. 11. Trust Fund of the LBP. - For the implementation of Chapters 9 and 
10 of this Act, 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 percent (1%) of collections from loans as administrative fee.


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The LBP may process and grant loans and rediscounting to qualified businesses 
within a period of two (2) years from the declaration of a national emergency by the 
President of the Philippines in view of a natural or man-made disaster or an economic 
recession unless the President extends it for a period of not more than two (2) years.
The remaining amount of the fund and the loan amounts already paid for, can be 
further used in the event of any natural or man-made disasters covered under this Act.
CHAPTER 4
Strategically Important Companies (SICs)
SEC. 12. Loans to Strategically Important Companies (SICs). - SICs are 
investee companies that are nationally significant, have high economic and 
employment contributions, and are engaged in any of the following sectors identified 
under the Philippine Standard Industrial Classification:
(a) 
Agriculture;
(b) 
Manufacturing:
(c) 
Electricity:
(d) 
Wholesale and retail trade; repair of motor vehicles and motorcycles;
(e) 
Transportation and storage;
(f) 
Accommodation and food service activities;
(g) 
Real estate and ownership of dwellings;
(h) 
Education;
(i) 
Human health; and
(j) 
Other services such as arts, entertainment and recreation, and other 
service activities to be identified in the implementing rules and regulations 
of this Act.
To ensure that SICs remain solvent, LBP and DBP are hereby authorized to offer 
interest-free loans to facilitate the rehabilitation of affected SICs which are 
experiencing solvency issues: Provided, That a SIC must be able to demonstrate 
upstream and downstream linkages to other firms or industries, show substantial 
employment to the community, and exhibit high degree of process efficiency, cost 
efficiency, product quality, and environmental soundness: Provided, further, That a 
SIC can show proof of temporary solvency issues due to the natural or man-made 
disaster or economic recession, financial soundness prior to said event, and credible 
and sound financial rehabilitation plan; Provided, finally. That the interest-free loans 
are subject to the following conditions;
(a) 
The debtor company must not reduce the number of employees beyond the 
percentage described 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;
(c) 
The debtor company shall not issue cash dividends during the term of the 
loan;


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(d) 
The debtor company must not increase the salaries, benefits, and other 
forms of remuneration of its senior executive officers and members of its 
board;
(e) 
The debtor company shall not provide or grant senior executive officers and 
members of its board separation pay or retirement pay: Provided, That any 
amount received by the senior executive officers and members of the board 
which is in violation of the foregoing shall be returned; and
(f) 
The debtor company shall not incur irregular, unnecessary, excessive, 
extravagant, or unconscionable expenditures such as entertainment, 
events, office/facility renovations, aviation/transportation services, and 
such other activities.
CHAPTER 5
Incentives and Exemption Privileges of DBP and LBP
SEC. 13. Tax Exemptions and Fee Privileges. - Any existing law to the 
contrary notwithstanding and in order to ensure the effective implementation of the 
provisions of this Act, the following transactions of the DBP and LBP shall be exempt 
from documentary stamp tax, capital gains tax, creditable withholding income tax, 
value-added tax, gross receipts tax, and such other taxes that may be imposed under 
Republic Act No. 8424, as amended, or the “National Internal Revenue Code of 1997,” 
whichever is applicable pursuant to the regulations to be issued by the DOF, upon the 
recommendation of the Bureau of Internal Revenue (BIR);
Loan Assistance Program, Rediscounting, and other Programs of the DBP
and LBP under Chapters 2 and 3 of this Act, respectively, including dation
in payment (dacion en page) by the borrower or by a third party in favor of
DBP and LBP.
The abovementioned transfers shall also be subject to the following, in lieu of the 
applicable fees:
(a) 
Fifty percent (50%) of the filing fees for any foreclosure initiated by the DBP 
and LBP in relation to the Loan Assistance and Rediscounting Programs 
as prescribed by the Rules of Court; and
(b) 
Fifty percent (50%) of the land registration fees prescribed under the 
existing circulars of the Land Registration Authority (LRA).
All sales or transfers of rediscounted loans/other credit accommodations 
including transfers by way of dation in payment by the borrower or by a third party to 
DBP and LBP shall be entitled to the privileges enumerated herein within a period of 
two (2) years from the declaration of a national emergency by the President of the 
Philippines in view of a natural or man-made disaster or an economic recession unless 
the President extends it for a period of not more than two (2) years.


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CHAPTER 6
Miscellaneous Provisions
SEC. 14. Appropriations. - The amount of Seventy Billion Pesos 
(PhP70,000,000,000.00) is hereby appropriated for the implementation of this Act.
SEC. 15. Implementing Rules and Regulations. - Within thirty (30) days from 
the effectivity of this Act, the DOF, acting as Chairperson, BIR, the Department of 
Trade and Industry (DTI), BSP, PGC, DBP, and 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 implementing 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 Flouse of Representative and the Senate. The JCOC shall be co-chaired by 
the Chairpersons of the House Committee on Banks and Financial Intermediaries and 
the Senate Committee on Banks, Financial Institutions, and Currencies, with the 
Senate and Flouse 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. Reportorial Requirements. - The PGC, LBP, and DBP shall submit 
reports to the DOF, the DTI, and the JCOC regarding the implementation of this Act.
CHAPTER 7 
Final Provisions
SEC. 18. Separability Clause. - If, for any reason, any part, section, or 
provision of this Act is held invalid or unconstitutional, the remaining provisions not 
affected shall continue to be in full force and effect.
SEC. 19. Repealing Clause. - All laws, decrees, executive orders, 
proclamations, rules and regulations, and other issuances, or parts thereof which are 
inconsistent with the provisions of this Act are hereby repealed, amended, or modified 
accordingly.
SEC. 20. Effectivity. - This Act shall take effect immediately after its publication 
in the Official Gazette or in a national newspaper of general circulation.
Approved,