REPUBLIC OF THE PHILIPPINES 
HOUSE OF REPRESENTATIVES 
19th CONGRESS 
SECOND REGULAR SESSION 
HOUSE BILL NO.  __________ 
INTRODUCED BY HONORABLE EDUARDO ‘BRO. EDDIE’ C. VILLANUEVA 
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  
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 
December 11, 2023
8:00 am
9698


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. 
HON. EDUARDO ‘BRO. EDDIE’ C. VILLANUEVA 
______________________________________________________________________ 
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/ (Acce ssed on 4 November 2022).  


REPUBLIC OF THE PHILIPPINES 
HOUSE OF REPRESENTATIVES 
19th CONGRESS 
SECOND REGULAR SESSION 
HOUSE BILL NO.  __________ 
INTRODUCED BY HONORABLE EDUARDO ‘BRO. EDDIE’ C. VILLANUEVA 
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. 
9698


9501 or the “Magna Carta for Micro, Small, 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 of exclusion 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 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.  
 
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 interestfree 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.  
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;  
(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.  
 
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,