The Department of Justice has expressed no objection to the enactment of a measure in Congress mandating the creation of local government unit-partnered cooperatives to administer credit surety funds to give micro, small and medium enterprises easy access to bank credit.
In a reply-letter to Deputy Executive Secretary for Legal Affairs Menardo Guevarra, the DoJ through Undesecretary Zabedin Azis said it has “no constitutional or legal objection to the passage” of Senate Bill No. 2909/House Bill No. 6007.
Guevarra sought the comments and recommendations of the DoJ on the proposed bills to be known as the Credit Surety Fund Cooperative Act of 2015.
The Justice department said the passage of the bill is in line with Article 2, Section 9 of the 1987 Constitution which provides that “the State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free people from proverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.”
The bill aims to encourage, promote and assist in the creation of a special cooperative, the CSF Cooperative, which shall be vested with juridical personality and enjoy all the rights and privileges of cooperative.
The measure also seek to enhance the credit worthiness of member-MSMEs, cooperatives and non-government organizations, and broaden their access to the credit facilities of banks.
Besides, the proposed law intends to sustain the continuous flow of credit in the countryside through the establishment of well and prudently managed CSFs which shall serve as surety covers.
The bill also aims to generate more employment and contribute to the poverty alleviation program of the government through increased investments and economic activities.