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Thursday, March 28, 2024

Financial execs call for speedy passage of GUIDE

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THE Financial Executives Institute of the Philippines (Finex) is calling for the immediate passage of a bill that seeks to strengthen the lending capacity of government financial institutions for distressed enterprises.

In a statement on Thursday, the business group said that more government measures must be implemented to jumpstart the economy anew, including the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill.

“We see the need for other measures that will further help businesses to recover from the pandemic and navigate through challenges that lie ahead,” Finex President Francisco Ed. Lim said.

Finex explained that the bill will extend financial assistance to potentially cash-strapped and debt-laden enterprises to inject liquidity and fuel recovery.

The lending facilities will be focused on medium, small and micro enterprises (MSMEs) and strategically important industries, including the agriculture supply chain, food industry, manufacturing, low-cost and socialized housing, hospitality and education.

To achieve this, the proposed law seeks to strengthen the lending capacity of Philippine Guarantee Corp., the Land Bank of the Philippines and the Development Bank of the Philippines.

The bill, in addition, proposes incentive grants and exemption privileges in the lending and investing activities of the state-run financial institutions.

“Its [GUIDE bill] immediate passage will also optimize the benefits of the CREATE and FIST Acts and will also help balance the risks to inflation as the government pushes its efforts to pump prime the economy, restore normalcy in the country’s business sector, reduce unemployment and provide renewed impetus towards robust economic growth,” Lim added.

CREATE means Corporate Recovery and Tax Incentives for Enterprises, while FIST stands for Financial Institutions Strategic Transfer.

“These two legislative measures are important components of the economic relief plan of the government to address the devastating effects of the Covid-19 pandemic and to make the Philippines an attractive investment destination for the longer term,” Lim explained.

CREATE eyes to cut the corporate income tax (CIT) immediately to 25 percent from 30 percent upon effectivity. The CIT will then be reduced further by 1 percentage point every year from 2023 to 2027 until it reaches 20 percent.

FIST, meanwhile, allows financial institutions to unload their nonperforming assets (NPAs) by selling them to asset management firms to better handle their debt portfolio. NPAs refer to nonperforming loans (NPL) and real and other properties acquired in settlement of loans.

Read full article on BusinessMirror

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