NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S. No.
)
SENATE
67
of f!)r
*22 JUL18 A 9 35
RbXEiVEI) 8V
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROVIDING FOR GOVERNMENT FINANCIAL INSTITUTIONS UNIFIED 
INITIATIVES TO DISTRESSED ENTERPRISES FOR ECONOMIC RECOVERY 
(GUIDE)
EXPLANATORY NOTE
The unprecedented challenges of COVID-19 to the economy of the country, 
as in the entire globe, are still thriving in the daily lives of the Filipino people and in 
the social and macroeconomic sphere of the country. Improvements were achieved 
but several obstacles remain. As noted in "2021 Full-year Economic Report: 
Regaining Lost Ground" published by the Senate Economic Planning Office (SEPO) 
on March 2022, "The Philippine Gross Domestic Product (GDP) recorded a growth of 
5.6 percent in 2021, signaling the start of an economic recovery. Despite two 
COVID-19 surges in April and in September, the less stringent mobility restrictions 
and the accelerated pace of the vaccination program helped boost economic activity, 
particularly in the manufacturing and trade sectors. Inflows of foreign direct 
investments have bounced back, even exceeding expectations. Likewise, the labor 
market situation has improved with more people participating in the labor force and 
getting employed. However, the quality of jobs remains a pressing challenge with 
the rising number of unpaid family workers and part-time workers. Moreover, an 
additional 3.9 million Filipinos fell into poveity in 2021 compared to the pre­
pandemic period. The year also ended with soaring fiscal deficit and public debt 
levels."


On a positive note, the Asian Development Bank forecasted in its Asian 
Development Outlook (ADO) 2022 that the Philippine economy will grow by 6.0% in 
2022 and further improve by 6.3% in 2023. Alongside this optimistic view is their 
recommendation that, "Policies to build the resilience of micro, small, and medium- 
sized enterprises (MSMEs), which play a vital role in the country's economic 
recovery, should be strengthened to support the sector's digital transformation, 
business innovation, and skills development."
The " Government Financial Institutions (GFIs) Unified Initiatives to Distressed 
Enterprises for Economic Recovery (GUIDE) Act' is one of the programs 
recommended by the economic managers that will capacitate the country's economy 
to fully realize its goal for recovery. The measure seeks to strengthen the 
government financial institutions (GFIs) including the LandBank of the Philippines 
(LBP) and the Development Bank of the Philippines (DBP). Through this, the GFIs 
will be able to assist micro, small, and medium enterprises (MSMEs) and other 
strategically important industries in addressing their iiquidity and solvency problems. 
The measure also provides various supports to MSMEs and other industries through 
financial assistance, loan programs, rediscounting and other credit facilities from 
LBP, DBP, Small Business Corporation (SBC) and Agriculture Credit Policy Council 
(ACPC).
This legislative proposal was filed by Senator Vicente C. Sotto III in the 18th 
Congress.
In view of the foregoing, the immediate passage of this measure is earnestly
sought.
ING^OY EJERCITO ESTRADA


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
iuFF Sfua'f
; pi
of UK :Sf: i't.n’y
*22 JUL18 A 9 35
S. No.
SENATE
674
Rl-CEiVED BV.
Introduced by Senator Jinggoy Ejercito Estrada
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 the '"Government Financial
2 
Institutions (GFIs) Unified Initiatives to Distressed Enterprises for Economic
3 
Reco very (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, fisherfoik, traders, suppliers, processors, and aggregators,
16 
who make up the linked sequence of value-added activities undergone


1 
by an agricultural product when converted from raw material to the
2 
final form 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
5 
services, whether single proprietorship, cooperative, partnership or
6 
corporation whose total assets, inclusive of those arising from loans
7 
but exclusive of the land on which the particular business entity's
8 
office, plant and equipment are situated, must have value falling under
9 
the following categories:
10 
micro: 
not more than Php3,000,000
11 
small: 
Php3,000,002»P15,000,000
12 
medium: 
PhplS,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 
{6) Strategically Important Companies or SICs shall have the meaning
17 
ascribed in Section 9(b) of this Act,
18 
CHAPTER I
19 
Development Bank of the Philippines
20 
Sec. 4. Loan Assistance Program of the Development Bank of the Philippines
21 
(DBP). - The DBP shall its expand its loan program for qualified MSMEs affected by
22 
the COVID-19 pandemic under this Act and MSMEs covered on the Republic Act No.
23 
11494 or "The Bayanihan to Recover as One Act": Provided, That such loans shall be
24 
granted in accordance with the rules and regulations to be issued to implement this
25 
Act and the following guidelines:
26 
(a) Eligible MSMEs under this Act should be engaged in infrastructure,
27 
service industry, and/or manufacturing business; and,
28 
(b)The loans granted hereunder should comply with the applicable
29 
prudential standards and regulations of the BSP.
30 
The DBP should likewise extend loans to local government units (LGUs)
31 
subject 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
3 
DBP may rediscount loans and other credit accommodations to enterprises
4 
enumerated in Section 4(a) of this Act, granted by BSP-supervised financial
5 
institutions (BSFIs), the Small Business Corporation (SBC), and those granted
6 
pursuant to credit programs of the Department of Agriculture-Agricultural Credit
7 
Policy Council (DA-ACPC) to MSMEs affected by the COVID-19 pandemic engaged in
8 
infrastructure, service industry, 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 DBP's Authorized Capita! 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 Capital Stock-Par Value. - The
16 
capital stock of the Bank shall be [Th-ifty-five billion- pesos
17 
{P-3-5-,0097Q8Q,-0Q9-.-GQ)] ONE HUI^DRED BILLION PESOS
18 
(PHP100/000/000f000.00) to be divided into [Thfee
19 
hundred—fifty—mill-ten—(359,009>999)] ONE BILLION
20 
(1,000,000,000) common shares with par value of One
21 
hundred pesos (P190.90) per share, which shall be fully
22 
subscribed by the [n]National [§]Governmentt;—Upon.-the
23 
effectivity of this Charter, the-Natienal Government shall initially
24 
subseribe- to One-hundred twenty-five- mil!ion-{425,00Q,999)
25 
common-shares -of stock-worth.Twelve..bifllen five hundred
26 
mHtien—pesos—(P12/5Q97999799Qt99)7—Five—Men—pesos
27 
(P5-,-9997999,090.99) of-whieh-shol! be doomod-paid-for by-the
28 
§evemment""af^-the--baiance~sftatl—be—paid —for— by—the
30 
Bank-frem..its..unappropriated—re ta i ned -earninges—Pro¥ided1
31 
That the-dividends duo the.national government pursuant-te
32 
Republie-Aet-No—76-S6-5hafl-first-be-pa4d7]: PROVIDED, THAT


1 
THE PRESIDENT OF THE PHILIPPINES MAY APPROVE
2 
THE INCREASE IN THE CAPITALIZATION OF THE BANK,
3 
UPON THE RECOMMENDATION OF THE BOARD AND THE
4 
CONCURRENCE OF THE SECRETARY OF FINANCE, UP TO
5 
SUCH AN AMOUNT AS MAY BE NECESSARY TO ATTAIN
6 
THE OBJECTIVES OF THIS CHARTER."
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
12 
Republic Act No. 11494 or "The Bayanihan to Recover as One Act": Provided, That
13 
such loans shall be granted in accordance with the rules and regulations that shall
14 
be issued to 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
20 
and 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
27 
as may be provided under the implementing rules and regulations to be issued.
28 
CHAPTER III
29 
SPECIAL HOLDING COMPANY
30 
Sec. 9. Creation of Investment Vehicle. - To ensure that Strategically
31 
Important Companies (SICs) remain solvent, the LandBank and DBP are hereby
32 
authorized to invest in, or enter into a joint venture agreement to incorporate a


1 
special holding company (the "SHC'O that is a stock corporation to be organized
2 
under Republic Act NO. 11232, otherwise known as "The Revised Corporation Code
3 
of the Philippines/' within six (6) months beginning from the date of effectivity of the
4 
rules and regulations of this Act, or effectivity of applicable revenue regulations,
5 
whichever comes later. The establishment, administration, and operation of the SHC
6 
shall be governed by the following principles:
7 
(a) The purpose of the SHC is to rehabilitate SIC affected by the COVID-19
8 
pandemic which are experiencing temporary solvency issues;
9 
(b)SICs are investee companies that are nationally significant, or those
10 
with high economic returns or high employment potential, and which
11 
are engaged in any of the following "strategically important industries
12 
or sectors," such as, but not limited to, agriculture, construction,
13 
education, food industry, health care, infrastructure, low-cost and
14 
socialized housing, manufacturing, power and energy, product
15 
distributor/retailer, services, tourism and hospitality, transportation and
16 
logistics, water and sanitation, and other industries to be identified in
17 
the rules and regulations issued to implement this Act: Provided, That
18 
an SIC must be able to demonstrate upstream and downstream
19 
linkages to other firms and/or industries, substantial employment to
20 
the community, and exhibit high degree of process efficiency, cost
21 
efficiency, product quality, and environmental soundness: Provided,
22 
further, That an SIC can show proof of temporary solvency problems
23 
due to the pandemic, financial soundness prior to the pandemic, and
24 
credible and sound financial rehabilitation plan.
25 
(c) Equity participation in the SHC may be offered to, and held by qualified
26 
private investors, including multilateral companies and lending
27 
institutions, as may be determined by the LandBank and DBP:
28 
Provided, That majority ownership of the total outstanding capital
29 
stock in the SHC shall be held by the LandBank and DBP until such
30 
time that they have recovered or will be able to recover their
31 
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
3 
LandBank and DBP Shall provide equal opportunity for equity
4 
participation in the SHC to all qualified investors, including multilateral
5 
companies and lending institutions. When private shareholdings in the
6 
SHC reaches fifty percent (50%) of the total outstanding capital stock,
7 
the stockholders thereof shall cause the adoption and registration with
8 
the Securities and Exchange Commission (SEC) of the companies
9 
amended articles of incorporation within three (3) months from such
10 
transfer of ownership;
11 
(e)The SHC, as government-owned and controlled corporation (GOCC).
12 
and the investments of DBP and LandBank therein, should be subject
13 
to the power of the Commission on Audit (COA) to audit and examine
14 
GOCCs and the investments of government in corporations: Provided,
15 
That the audit of the SHC by the COA shall not preclude the SHC from
16 
engaging the services of a private auditing firm when equity
17 
participation in the SHC is offered to qualified private investors:
18 
Provided, further, That even if the services of the latter are availed of,
19 
the audit report of the COA shall serve as the report for purposes of
20 
compliance with audit requirements as required of a GOCC under
21 
appiicable law;
22 
Sec. 8. Separabiiity Cause. - If any provision or part hereof is held invalid or
23 
unconstitutional, the remainder of the law or the provision or part not otherwise
24 
affected shall remain valid and subsisting.
25 
Sec. 9. Repealing Cause. — Any law, presidential decree or issuance,
26 
executive order, letter of instruction, administrative order, rule, or regulation
27 
contrary to or inconsistent with the provisions of this Act are hereby repealed,
28 
modified, or amended accordingly.
29 
Sec. 10. Effectivity. - This Act shall take effect fifteen (15) days after its
30 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,