Northern Foods abolition underway

MANILA, Philippines — The Governance Commission for GOCCs (GCG) said it has taken the necessary steps to abolish Northern Foods Corp. (NFC) amid its non-performance and losses.

The GCG, the central oversight body for government owned and controlled corporations (GOCCs), said it has been proactive in abolishing NFC, initiating actions for the liquidation of the state-run firm as early as 2021.

The Commission on Audit earlier said GCG has failed to convene the technical working group (TWG) for NFC’s abolition that resulted in unresolved issues on compensation, liquidation of assets, settlement of liabilities, and further depletion of the financial resources of NFC.

The TWG is composed of the Departments of Agriculture and Budget and Management, as well as the Land Bank of the Philippines and the Privatization Management Office under the Department of Finance.

In December 2021, then president Rodrigo Duterte approved the abolition of NFC.

GCG chairperson Alex Quiroz argued that it is incorrect to attribute inaction on the part of GCG.

“Based on records, the TWG members nominating their respective authorized representatives were requested as early as Dec. 9, 2021, but completed only on July 22, 2022,” Quiroz said.

“While waiting for the TWG members to be completed, the GCG approved the schedule of separation plan of NFC on June 23, 2022, which resulted in approximately P1.3 million savings per month on salaries and wages,” he said.

Further, Quiroz said upon his appointment in September, the GCG immediately tried to convene the TWG to discuss the abolition of NFC.

It was only on Oct. 8 last year when the TWG convened and conducted its first meeting. By Oct. 26, the GCG and the TWG received the updated plan of liquidation as requested from NFC.

Another meeting was conducted just before Christmas on Dec. 21.

Quiroz said the next meeting will be scheduled once the NFC board attains majority members to constitute a quorum, as the board of an abolished GOCC continues to possess powers to effect the liquidation of the GOCC.

Ilocos Norte-based NFC supplies tomato paste for manufacturers of tomato sauce or ketchup, as well as to other food chains in the country. NFC has been incurring losses since its founding in the 1980s.

GCG is mandated to rationalize the public corporate sector through streamlining, reorganization, or merger, as well as adhere to the policy of safeguarding public funds to provide the highest liquidation value of abolished GOCCs.