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Drilon calls P10-B rescue package for pandemic-affected firms a 'joke'

Senate Minority Leader Franklin Drilon raised alarm on Wednesday over the sincerity of the Duterte administration to help companies affected by COVID-19, stressing that the proposed P10-billion “rescue package” is a measly amount compared to the budget allocated for the government’s anti-insurgency drive.

During the resumption of the Senate committee on banks and financial institutions’ discussion on the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE), Drilon said the planned P10-billion allocation to be lent out to distressed strategically important companies (SICs) is “such a small amount. We do not know if this can help.”

He said the Philippine economy contracted by 9.5% in 2020, equivalent to about P1.5 trillion in economic losses due to the COVID-19 pandemic.

“Given the size of the contraction in the economy, 9.5% of GDP (gross domestic product), which is one of the worst in the world... I am tempted to say, and I’m saying that P10 billion as a rescue package is a joke,” Drilon said.

Drilon cited the P19.5-billion budget for the National Task Force to End Local Communist Armed Conflict (NTF-Elcac) for 2021.

“I’m raising the issue of priorities. We have P19.5 billion in an anti-insurgency fund, we have P10 billion to assist SICs,” Drilon pointed out.

“Given all of these, raise questions in the sincerity of the administration in helping the strategically important companies,” he said.

For her part, National Treasurer Rosalia de Leon said that the amount is what the government can afford as of the moment given its current fiscal position.

Under the GUIDE bill, a measure pushed by the economic managers, state-run lenders Land Bank of the Philippines and the Development Bank of the Philippines will be provided with P10 billion worth of public fund through the Bureau of Treasury to provide loans to pandemic-hit micro, small, and medium enterprises (MSMEs) and SICs or large corporations.

Of the P10 billion, P7.5 billion will be infused to Landbank, and P2.5 billion to the Development Bank of the Philippines to form a special holding company, which will invest in financially-distressed firms.

Landbank chief economist Guian Angelo Dumlagan said the state lender has identified 15 potential SICs which could benefit from the rescue package.

Dumalagan said the 15 SICs, if not “rescued” or infused with additional equity, could lay off 119,403 employees.

These 15 SICs are in the business of transportation and storage; wholesale and retail trade; construction; accommodation and food service activities; real estate; repair of motor vehicles and motorcycles; and water supply, sewerage, waste management and remediation activities.

“If these companies would fold up, those companies that are depending on these companies might probably show some contraction in their employee level as well,” Dumalagan said.

In defense of the P10 billion rescue package under GUIDE bill, De Leon said that even if the amount is small, the importance of the SICs to the economy will result in great returns if they are assisted.

Drilon agreed that distressed firms need capital infusion and proposed that the P10 billion fund should be raised.

Both Senators Imee Marcos and Sherwin Gatchalian agreed that the amount should be hiked. —LBG, GMA News