Politicians Dip Hand Into Quedancor Funds

By Yvonne T. Chua and Luz Rimban
Vera Files

(Second of three parts)

The Quedan and Rural Credit Guarantee Corp. (Quedancor) does not only give out loans to the poor. It also “lends” money to “needy” politicians, congressmen included.

Insiders say Quedancor is the one government corporation politicians know they can run to when they want cash—for political reasons or otherwise. The “loans” are known within Quedancor as “political accounts.”

Officially, these “political accounts” do not exist; there is no record of them in Quedancor’s books. A Quedancor official said these are either hidden in Quedancor’s local government account or distributed across various programs.

These “political accounts” have partly contributed to the huge past due receivables—nearly P4 billion—that Quedancor is saddled with. Metro Manila accounts for P745 million and Region 13 (Caraga), P636 million.

At first, it was easy holding politicians accountable since a number of these loans were actually documented. That was in the few years after 1992 when Congress passed the law turning Quedancor into a state corporation.

For example, the Agricultural Credit Policy Council, an agency attached to the Department of Agriculture, loaned about P20 million to Quedancor in 1993 and 1994. The money went to a micro-credit program that was among the congressional initiative allocations—pork barrel projects—of Quirino Rep. Junie Cua. A decade later in 2004, P15.4 million of that loan was still unpaid and had to be restructured. Cua is now chair of the House appropriations committee.

Nowadays, politicians no longer leave a paper trail at Quedancor, thanks to a four-member “Special Operations” Group, which is Quedancor’s “one-stop shop” for congressmen, governors and mayors.

This group has existed since the late 1990s and takes orders from a Quedancor executive who transacts directly with politicians, especially those allied with the administration, a Quedancor official privy to the group’s operations said. The group includes a Quedancor district supervisor and an assistant vice president.

The group goes through the motions of processing loans. It supposedly conducts credit investigations, but in reality, it lines up “ghost” borrowers in whose names the “political accounts” will be given. The group also manufactures or overappraises collaterals in exchange for 15- to 20-percent “commission,” the official said.

Quedancor’s poor accounting system makes it difficult to trace the funds.

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