NLDC says it received no government subsidy

MANILA, Philippines - State-owned firm National Livelihood Development Corp. (NLDC) said yesterday it does not receive any government subsidy to run and sustain its operations.

This clarification was issued by the NLDC in light of recent news articles that included it among government-owned and – controlled corporations (GOCOs) that purportedly got a big chunk of subsides during the first four months of the year.

The NLDC said in its statement that it is a self-sustaining institution fully dependent on its earning generated from its livelihood credit programs and investments to cover for operational costs and the provision of its services. Its fund portfolio amounts to P4.096 billion as of Dec. 31, 2009 and has total assets of P5.157 billion.

The NLDC is non-stock, non-profit corporate body created by Executive Order Nos. 681 and 681-A which directed the merger of the Secretariat of the National Livelihood Support Fund (NLSF) and the Livelihood Corp. (Livecor), both established during the time of the defunct Kilusang Kabuhayan at Kaunlaran or KKK.

Since the original infusion of KKK capital funds to the former NLSE and Livecor, the NLDC has not obtained nor requested for any additional appropriations or budgetary support from the National Government. Although a relatively small agency compared to other GFIs and GOCCs, NLDC has adequate financial and operational systems and control mechanisms in place to properly safeguard and optimize its resources thereby making it among the leading government institutions engaged in the provision of microfinance in the country.

The NLDC explained that the P789 million supposed “subsidy” granted to the agency likely pertains to the Priority Development Assistance Funds (PDAF) which were coursed through the institution specifically intended for livelihood projects of legislators. The NLDC, however, merely acts as administrator of these funds for and in behalf of the National Government upon the initiative of the concerned legislators in order to align their livelihood projects to the overall national development program for the micro, small, and medium enterprises (MSMEs) sector.

The NLDC is one of the agencies identified by Congress to serve as a partner in the implementation of various livelihood programs to be assisted by PDAF under the General Appropriation Act. The corporation is only given a minimal management fee of three percent of the total project costs to cover for administrative and other related expenses.