MANILA, Philippines – Senate Minority Franklin Drilon has questioned the P10-billion rescue package for companies heavily-hit by the coronavirus pandemic, calling it “grossly inadequate.”
In a statement on Wednesday, Drilon said the proposed amount is a “drop in the bucket” when compared to the government’s P19.5-billion fund to combat insurgency activities.
During a Senate hearing on the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act (Guide bill) on Wednesday, the senator stressed that rescuing strategically important companies (SIC) should be given priority since these can help save people’s employment.
He noted that the principal objective of the GUIDE bill is to give necessary access to credit and financial assistance to micro, small and medium enterprises (MSMEs) and SICs), affected by the COVID-19 pandemic.
However, Drilon questioned the sufficiency of the amount considering that the country suffered a 9.5 percent economic contraction in 2020, equivalent to P1.5 trillion, and an unemployment rate of 4.5 percent, equivalent to 4.5 million jobless Filipinos, due to the pandemic.
“Given all of these, I raise questions on the sincerity of the administration in helping these strategically important companies. Will it make a dent?” he asked.
“The P10 billion rescue package is a joke, especially if you look at it in the context of the P19.5 billion this government allocated to the anti-insurgency fund,” he added.
Drilon said there is clearly a need for the government to provide more meaningful interventions to help pandemic-hit companies, save jobs and revive the economy.
He also insisted that the government should put more funds from the national budget instead of utilizing the funds of the Land Bank of the Philippines and the Development Bank of the Philippines.
Under the measure, DBP and Landbank will be authorized to invest in, or enter into a joint venture agreement to incorporate a special holding company (SHC).
The SHC is intended to assist in the rehabilitation of strategically important companies affected by COVID-19 pandemic which are experiencing temporary solvency issues.
The bill provides for a capital infusion of P7.5 billion to LBP and P2.5 billion to DBP.
Drilon said using the existing funds of the state banks poses risks to their financial positions.
“I hope that the subcommittee can review the proposed structure of the special holding company, review the total financial exposure of the government in incorporating this, and check the finances of the LBP and DBP,” he said.
“We should also place more safeguards in the bill to ensure that the people’s money is protected,” he added.