House Defeat COVID-19 Ad-Hoc Committee approves PESA, FIST

Two bills were approved at the House of Representatives which includes a supplementary budget for mass testing, support of businesses, financial institutions, and the government infrastructure programs. 

Two unnumbered bills were approved last May 26 that would boost the economy as provided in the Bayanihan to Heal as One Act or Republic Act No. 11469.

Philippine Economic Stimulus Act (PESA)

Authored by Rep. Joey Salceda and Rep. Stella Quimbo, the approved substitute bill provides a supplementary budget of Php 1.3-T which would include programs for mass testing and subsidies for micro, small, and medium enterprises. The inclusion of mass testing comes after an earlier statement by Sen. Koko Pimentel that mass testing was not included in the provisions of the Bayanihan to Heal as One Act. An amount of Php 666-B was allotted to fund these programs from 2020 to 2021.

Particularly, Php 20-M has been prescribed to be used for mass testing and related activities including the purchase of testing kits and the strengthening of contact tracing to be used until 2021.

To ramp up infrastructure programs, another Php 650-B was allotted to fund government infrastructure programs under the Build, Build, Build program. The additional budget is slightly less than the budget allocation for infrastructure-related agencies like the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) which received Php 580-B and Php 100-B respectively for their 2020 budget. Based on the substitute bill, the budget would be used starting 2021.

Financial Institutions Strategic Transfer (FIST) Act

Earlier in the same session, a bill that aims to help financial institutions manage their debts and non-performing assets was approved.

Authored by House Committee on Banks and Financial Intermediaries Chairperson Rep. Junie Cua, the bill explains that the bill would entice financial institutions such as banks to offload certain non-performing assets affected by the COVID-19 pandemic by granting tax exemptions and transfer fees.

Non-Performing Asset refers to loans and advances where no payment of interest and principal have been received. Banks often categorize certain loans as non-performing after a set term of nonpayment which can occur during the term of the loan or for failure to pay principal due at maturity.

According to a report from the Philippines’ Central Bank, non-performing loans were recorded at Php 172-B as of February, higher than the Php 167-B last January.

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