State-run industrial estate in Cavite up for abolition
MANILA, Philippines—It took the Governance Commission for Government Owned or Controlled Corporations (GCG) eight years to deactivate the state-run First Cavite Industrial Estate Inc. (FCIEI) as it took some time to settle unpaid dues the ecozone regulator.
On Dec. 21, FCIEI was finally deactivated — which meant it can no longer enter into any contract or transaction, and then can be abolished — through a memorandum order signed by GCG ex-officio members Finance Secretary Carlos Dominguez III and Budget Officer-in-Charge Tina Rose Marie Canda, GCG Chair Samuel Dagpin Jr., and Commissioners Michael Cloribel and Marites Doral. The document was made public on Monday (Dec. 27)
In 2013, the GCC already recommended to then president Benigno Aquino III to abolish FCIEI, which was established in 1990 to acquire, own, lease, hold, subdivide, construct, develop, equip, operate and maintain industrial estates. It was a joint venture of the National Development Co. (NDC), Marubeni Corp., and Japan International Development Organization Inc.
Republic Act (RA) No. 10149 or the GOCC Governance Act of 2011 empowered the GCG to rationalize the government-owned and/or -controlled corporations sector via abolition, merger or privatization of GOCCs it deemed no longer needed. Active GOCCs enjoyed subsidy, equity and net lending support from the national government.
In the case of FCIEI, then President Aquino in 2016 approved in principle its abolition as long as it settled its liabilities with the Philippine Economic Zone Authority (Peza), GCG noted.
According to past reports of the Commission on Audit (COA), FCIEI “[did] not have enough money to settle its liabilities” such that the GCG pushed for an agreement between FCIEI and Peza in 2016, which allowed the firm to pay a partial P3 million so it can stop incurring interest charges.
COA reports had shown that FCIEI owed Peza a balance of P12.7 million, which can be paid through disposition of the firm’s assets.
The GCG said FCIEI and the NDC board in 2017 both agreed to dissolve the firm, but it was only last year when its audited financial statements were prepared and presented on a liquidation basis.
“It is in the best interest of the state to deactivate FCIEI in the interim, pending its formal abolition as recommended by the GCG to the Office of the President,” the commission said.
While in transition toward full abolition, FCIEI must preserve its assets awaiting final disposition, cannot hire more personnel, and is no longer entitled to benefits extended to GOCCs.
TSB
