Abolition of Quedan and Rural Credit Guarantee Corp

The abolition order is anchored on Section 5(a)(ii) of Republic Act No. 10149, the GOCC Governance Act of 2011.
The Governance Commission for GOCCs (GCG) recommends abolition under Section 5(a)(ii) based on findings that QUEDANCOR is dormant or nonoperational (Section 5(a)(ii)).
The recommendations also rely on duplication or overlap with other government guarantee programs (Section 5(a)(ii)).
The recommendations further cite lack of desired outcomes and cost efficiency considerations under Section 5(a)(ii).

QUEDANCOR is a government-owned and controlled corporation (GOCC) created under Letter of Instruction (LOI) No. 704 (s. 1978).
LOI No. 704 (s. 1978) is described as amended by Republic Act No. 7393, the “Quedan and Rural Credit Guarantee Corporation Act.”

The order establishes that QUEDANCOR is prohibited from continuing its guarantee function under its charter due to exceeding the allowable outstanding guarantee obligation.
The order characterizes other entities as operating more successful agricultural guarantee programs and activities, including: the Philippine Export-Import Agency, the Small Business Corporation, and the Agricultural Guarantee Fund Pool placed in trust with Land Bank of the Philippines.
The order finds that QUEDANCOR has been operating at a loss for the last five (5) years.
The order directs abolition to address dormancy/non-operation, overlap/duplication, and insufficient cost efficiency and outcomes.

Section 1 abolishes QUEDANCOR.
The abolition is implemented as a direct directive that ends QUEDANCOR’s corporate existence for purposes of its guarantee mandate.
The order provides for post-abolition asset liquidation and liability settlement to close outstanding obligations (Section 2).

The order requires that QUEDANCOR’s assets shall be liquidated to settle the outstanding liabilities of the corporation (Section 2).
Asset liquidation and liabilities settlement must be done in accordance with applicable laws, rules, and regulations (Section 2).

Affected officials and personnel of QUEDANCOR, whether regular or contractual, may avail of the separation benefits stated in Section 3.
The separation benefits under Section 3 are available in addition to retirement or separation benefits allowed under existing laws (Section 3).
Separation benefits are computed using the Basic Monthly Pay (BMP) multiplied by years-of-service-based multipliers (Section 3):
- First 20 years: 1.00 x BMP x No. of years
- 20 years and 1 day to 30 years: 1.25 x BMP x No. of years
- 30 years and 1 day and above: 1.50 x BMP x No. of years
The funding for separation pay and other benefits of affected personnel must be sourced from QUEDANCOR’s corporate funds (Section 3).
The Department of Budget and Management must ensure there are sufficient funds to cover compensation for affected officials and personnel (Section 3).

The order directs GCG to be assisted by a Technical Working Group to implement its provisions (Section 4).
The Technical Working Group is composed of:
- Department of Agriculture
- Department of Finance
- Department of Budget and Management
- Land Bank of the Philippines (Section 4).

Section 5 repeals or modifies all other orders, issuances, or parts that are inconsistent with the order’s provisions.
Section 6 provides separability: if any provision is declared invalid or unconstitutional, the remaining provisions not affected remain valid and subsisting.