Gov’t urged to abolish debt-saddled GOCC

A congressional push for the abolition of underperforming government-owned and –controlled corporations (GOCCs) and government financial institutions (GFIs) is gaining traction, with one local executive asking Malacañang to kick-start this austerity measure by closing down the debt-riddled Partido Development Administration (PDA), which incurred losses beyond P100 million over the past two years.

In a letter to President Aquino, the governor of Camarines Sur called on the Palace to abolish and investigate the PDA—an entity operating in the area of the province known as the “Partido” area—that has reportedly defaulted on its loans exceeding P1 billion as a result of “mismanagement.”

“May we enlist your support in our people’s call to abolish the PDA and to investigate this debt-ridden GOCC,” said Camariner Sur Governor Luis Raymund Villafuerte Jr. in his recent letter to the President. “There is an urgent need to scrutinize its past and present debt transactions, which to our mind are absolutely unnecessary and unexplainable given the [small] size of the area and its limited constituency.”

The national government has absorbed these bad loans of the PDA, the payables of which totaled P585.5 million in 2009, representing the first four loan amortizations and guarantee fees that the government had to shoulder because of the PDA’s inability to pay them, said Villafuerte, citing Commission on Audit’s (CoA) findings.

“As per the CoA’s 2009 Annual Audit Report, the PDA has been operating at a loss for the years 2009 (P33.3 million) and 2008 (P66.2 million),” he said. “Its foreign loans and national debt likewise amount to more than P1 billion and are being paid for and assumed by the national government because the PDA is unable to service its obligations.”

The PDA, which has been operating since 1997 in the 10 municipalities of the Partido district, is one of the 36 underperforming and losing GOCCs and GFIs that Congressmen Rufus Rodriguez and Maximo Rodriguez Jr. wanted abolished under House Bill 2867.

“It is very alarming for the people of Camarines Sur that the PDA has incurred a debt amounting to over P1 billion which [covers] in reality only one congressional district with 10 municipalities,” Villafuerte told the President.

“It is apparent that the PDA has no managerial capacity and industry expertise to undertake projects that are funded by both local and international agencies,” he said. “The CoA can attest to projects that were funded by government monies and that are now non-operational because of massive losses.”