Financial Viability and Functional Overlap
- Both PVAC and PHIVIDEC sustained continuous and irreversible financial losses, rendering them financially nonviable.
- The responsibilities for commercial activities and veteran services originally assigned to PVAC and PHIVIDEC have been effectively performed by PHIVIDEC Industrial Authority (PIA) and Philippine Veterans Assistance Office-Proper (PVAO), respectively.
Legal Authority for Abolition
- Under Section 5(a) of Republic Act No. 10149 (GOCC Governance Act of 2011), the Governance Commission for GOCCs (GCG) is empowered to reorganize, merge, streamline, abolish, or privatize GOCCs after consultation with the attached department.
- The GCG, aligned with Executive Order No. 43 and the Philippine Development Plan 2011-2016, found the abolition of PVAC and PHIVIDEC favorable for improving national productivity and reducing inefficient government spending.
- The GCG recommended their abolition, which the President approved.
Abolition and Transfer of Functions
- The GCG, coordinating with the Department of National Defense (DND), shall undertake the abolition of PVAC and PHIVIDEC.
- Service functions of PVAC aimed at veteran assistance shall be absorbed by PVAO.
- Commercial functions of PHIVIDEC and PVAC shall be assumed by PIA.
Asset Management and Liabilities
- DND/PVAO and the Privatization and Management Office (PMO) are tasked with the disposition of PHIVIDEC assets.
- The Department of Finance (DOF) shall pay all outstanding financial obligations of PVAC and PHIVIDEC, if any, from the proceeds of asset disposition.
- DOF's payments are subject to applicable budgeting, accounting, and auditing rules and regulations.
Technical Working Group Composition and Functions
- GCG shall establish a Technical Working Group to implement the abolition order, assisted by:
- DND/PVAO: To continue providing veteran services formerly under PVAC.
- PIA: To assume commercial functions of PHIVIDEC.
- DOF/Bureau of the Treasury: Responsible for settling liabilities from asset disposition proceeds.
- PMO: To manage the sale and disposition of PVAC and PHIVIDEC assets to satisfy outstanding liabilities.
Legal Provisions on Validity and Supersession
- Separability clause ensures that invalidity of any part does not affect the whole Order.
- All inconsistent rules, orders, and regulations are repealed or modified accordingly.
Immediate Effectivity
- The Memorandum Order takes effect immediately upon issuance.