Quedancor to continue operations - Finance dep’t

MANILA, Philippines - Operation of debt-ridden Quedan Rural Credit and Guarantee Corp. (Quedancor) will continue, despite earlier plans to phase it out as the government cannot afford the P3.5-billion proposed bailout, Finance Undersecretary Jeremias N. Paul, Jr. told reporters. Mr. Paul said the state credit institution, which has been saddled by high-risk loans, would "stick to their core mandate to provide guarantees." "What we’re looking at now is pweding hindi na deactivate. It can just be rightsizing since there is no need for Congressional approval on this. It is the economic managers who decided on that. We are studying on how we can do that," he said. Sought for comment, Quedancor officer-in-charge Federico A. Espiritu said "rightsizing is exactly my advocacy since the economic managers earlier decided on deactivation. I believe that Quedancor must still perform its guarantee mandate for the agri-fishery sector in these times that agri-credit from private banks will remain to be more scarce and inaccessible due to prevalent global financial crisis." Quedancor was seeking its own bailout, saying P3.5 billion is needed to continue its operations. But the Finance deparment said only P475 million was needed and that it would be better for Quedancor to be shut down. "Quedancor management shall strive to attune its guarantee functions within the available but limited funds as it puts a halt to its direct lending operations," Mr. Espiritu said. Quedancor owes P11.4 billion to various banks, including P5 billion to the former Equitable PCI Bank and Land Bank of the Philippines through a syndicated loan, and P1.5 billion in multi-series bonds. Taking over in May 2007, Mr. Espiritu blamed his predecessors for the financial mess. The woes started when Quedancor began to hand out loans directly to the farm sector. — Ruby Anne M. Rubio, BusinessWorld