THE Senate has passed on third reading the Business Recovery and Insolvency Act (Bria), a landmark piece of legislation that seeks to improve the country’s vintage insolvency laws.

Bria is the new name of the Corporate Recovery and Insolvency Act (Cria).

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Unlike Cria, which covered corporations and partnerships only, the Bria will cover natural persons who are doing business by single proprietorships in line with the program of government to help small and medium enterprises (SMEs).

“With the approval by the Senate of the Bria, we will work with the House of Representatives for the early passage of the counterpart bill.  Our 1909 Insolvency Act needs to be replaced. It is no longer responsive to the 21st century needs of our businesses,” Philippine Stock Exchange (PSE) president and chief executive officer Francis Lim said.

“The enactment of the Bria into law will be another key accomplishment of this Congress in light of the fact that this particular legislation has spanned several Congresses before it could be passed into law,” he said.

The PSE is a staunch supporter of the proposed Bria pending with Congress. Bria seeks to revise the outdated Insolvency Act of 1909 and to provide a comprehensive and speedy process for insolvency and corporate rehabilitation proceedings.

The bill includes provisions on court-supervised rehabilitation, pre-negotiated rehabilitation, out-of-court rehabilitation proceedings, liquidation in insolvency, and cross-border insolvency proceedings.

Ultimately, the proposed BRIA will also lead to the protection of all stakeholders.

“Aside from addressing the needs of small businesses, the Bria governs not only rehabilitation of businesses but also their liquidation in insolvency to ensure that there is an orderly liquidation of assets and liabilities in case the debtor can no longer be rehabilitated,” Lim said.

He added, “It also introduces out-of-court rehabilitation proceedings, which will place our country ahead of other jurisdictions in the area on insolvency law reform.”

“This new legislation will make the Philippines a step closer to being an attractive investment destination. Complaints of investors like CalPERS and other large foreign investors are to be addressed by the new law,” Lim said.

Sen. Edgardo Angara authored the Bria in the Senate.

House Bills 132, 293, 3542 and 4960, authored by Reps. Juan Edgardo Angara (Aurora), Jaime Lopez (Manila), Ma. Amelita Villarosa (Occidental Mindoro) and Ramon Durano VI (Cebu), respectively, seek to provide the policy framework where debtors and creditors can resolve and adjust claims and property rights for firms going through financial distress.

The PSE has proposed legislative reforms to boost the capital markets and got three bills passed into law in the last two years.

These are the law abolishing the documentary stamp tax (DST), the Personal and Equity Retirement Account (Pera) Law; and Credit Information System Law (CISL).

Meantime, the Senate and House of Representatives separately ratified the Bicameral Conference Report on the Real Estate Investment Trust (REIT) that will bring the bill a step closer to becoming a law.

Last June 3, the House of Representatives approved the REIT bill on third and final reading, just a few months after the Senate had passed its version of the bill before Congress went into recess last March 7, 2009. (PR)