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Chairman's
Message
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 Sustaining
agricultural and fishery production, and increasing the incomes of farmers
and fisherfolk are indeed daunting tasks that entail total commitment and
teamwork, particularly among members of the Department of Agriculture
family.
We are privileged to have in our team the Quedan and Rural Credit
Guarantee Corporation (QUEDANCOR) that provides our various clienteles,
most especially small farmers, fisherfolk and rural entrepreneurs, the
much-needed start-up and operating capital to pursue their respective
enterprises.
In this regard, we are pleased to share with our partners and industry
friends this 2005 Annual Report that chronicles our modest achievements
during the year in review. Among the highlights are that we have infused
an all-time high of P5.4 billion in credit and guarantee funds, which
subsequently generated an additional 215,485 jobs nationwide. We believe
this accomplishment in the field of rural financing has further fueled
agri-economic activities in the countryside, and we expect QUEDANCOR to
continuously improve its performance in the years and decades ahead.
Thus, herein chronicled are the various programs and initiatives of the
agency that empower and benefit hundreds of thousands of small farmers and
fishermen, rural entrepreneurs, agribusinessmen, and even ordinary
housewives.
For these accomplishments and many more, I commend the hardworking men and
women of QUEDANCOR. May they continue to efficiently perform their
mandate, in concert with other DA family members, so we could successfully
attain our vision of a modern and globally competitive Philippine
agriculture.
Mabuhay ang QUEDANCOR!
(Sgd.) Secretary Domingo F. Panganiban
QUEDANCOR Chairman of the Board
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Report of the
President & CEO
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 The strength of the
agri-fishery sector depends not only on labor and the innate skills of the
Filipino farmer and fisher. Government interventions in the form of
farm-to-market roads and infrastructures, technology enhancement and the
availability of affordable credit on a timely basis complete the entire
formula.
Time and again, credit and capital provision have been valuable components
in stimulating agribusiness and livelihood endeavors. This is the niche of
QUEDANCOR where it makes a very strong presence.
Year 2005 proved to be the halcyon year of the country’s premiere credit
and guarantee agency. The P5.4 Billion financial assistance granted to
215,485 agricultural workers this year, the highest accumulated loan
release so far in the history of QUEDANCOR’s operations, justifies the
specialized undertaking that the Corporation has implemented in order to
significantly contribute to the national government’s thrusts of poverty
alleviation and job generation.
Moreso, this achievement is solely not of QUEDANCOR but also of its
partners and stakeholders in the banking industry. If not for the mutual
investment agreements forged that resulted in the provision of available
credit resources for QUEDANCOR, the Corporation would not have been able
to attain this worthwhile accomplishment.
Indeed, the past year has been a series of accomplished goals complemented
by obstacles which are effectively hurdled -- thanks to the competence
shown by the skilled workforce of the Corporation.
Among these highlights include the P1.0 Billion issuance of Corporate
Bonds with the First Metro Investment Corporation and United Coconut
Planters Bank as Lead Arrangers in the infusion of fresh funding for the
financing programs of QUEDANCOR. Also to be noted is the decentralization
policy implemented early this year, which hopes to optimize operational
efficiency in all Regional and District Offices. Solidifying these efforts
are the confluence of strategic plans and information technology systems
build-up aggressively undertaken by the Corporation.
These achievements came into fruition through the policy determination
undertaken by the Governing Board under the leadership of Secretary
Domingo F. Panganiban whose expertise and experience as a staunch advocate
of Philippine agriculture provided strong guidance to our corporate
undertakings.
In fine, QUEDANCOR’s corporate operations have never been as dynamic as
the new millennium sets in. For the period 2001 to 2005, the government’s
credit and guarantee company posted an average annual performance of P3.21
billion loan releases. This is quite a record-breaking feat, more than
surpassing the agency’s annual average performance covering any 5-year
period in its corporate history. And surprisingly, it foretells brighter
and more colorful prospects for the future of the agency.
As QUEDANCOR traverses the regular course of corporate existence, it not
only increases physical aging. It likewise gains corporate maturity.
Our achievements reflect the gains of the entire agriculture sector.
(Sgd.) NELSON C. BUENAFLOR
President and CEO
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Operational
Highlights
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 QUEDANCOR steadily
built its resources, decentralized its disbursement system and transformed
its SRT scheme into agribusiness enterprise to expand and improve its
financial services to the marginalized agricultural workers, farmers ,
fishers and small entrepreneurs.
From generating P1.4 billion loans in 2001, the Corporation sustained its
aggressive growth reaching an all-time high of P 5.39 billion worth of
loans for year 2005.
Over the past 27 years, QUEDANCOR released cumulative loans amounting to
P41.8 billion which benefited over four million marginalized farmers and
fishers.
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Delivering
Credit Services:
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Corporate
Highlights
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Round-up of 2005
Corporate Activities
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QUEDANCOR 27th Anniversary
Celebration
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Among the past year’s Corporate
highlights was the celebration of QUEDANCOR’s 27th Anniversary in
consonance with the observance of the 2005 Agri-Credit Week, as mandated
by Presidential
Proclamation No. 152.
With the theme: “Financing Countrywide Agri-Fishery Development:
QUEDANCOR’s 27 years of Responsive Credit Delivery”, the annual
celebration was held at the Quezon City Sports Club with Agriculture
Secretary Arthur C. Yap as Guest of Honor. Other guests included top
honchos of the banking industry such as United Coconut Planters Bank
President Jose L. Querubin, Rural Bankers Association of the Philippines
President Senen D. Glorioso, Agricultural Credit Policy Council Executive
Director Jovita M. Corpuz and Land Bank Executive Vice-President Gilda E.
Pico.
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Gawad QUEDANCOR Awardees
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 In recognition of outstanding
client-beneficiaries who have maintained excellent repayment record and
have properly utilized the credit resources allocated them, the
Corporation conducts the annual Gawad QUEDANCOR Awarding Ceremonies.
For 2005, the Gawad QUEDANCOR recipients were: Mrs. Gonzaga A. Calizo of
Ibajay, Aklan as the SRT Outstanding Client for Swine Raising; Mr. Ricardo
P. Partisala of Santa Josefa, Agusan del Sur who is SRT Outstanding Client
for Oil Palm Cultivation; Mrs. Cresencia D. Sialana of Jose Dalman,
Zamboanga del Norte, SRT Outstanding Client for Seaweed Cultivation; Mr.
Cornelio D. Guma of Barangay Sering, Bucas Grande, Surigao del Norte, SRT
Outstanding Client for Lapu-lapu/Lobster Raising; Mr. Roberto A. Ballon of
Kabasalan, Zamboanga-Sibugay, SRT Outstanding Client for Talaba
Cultivation; Father Fernando V. Peralta SDB, of Dumangas, Iloilo, SRT
Outstanding Beneficiary for Swine Raising; Mr. Marcos Pelayo of Santa Ana,
Pampanga, SRT Outstanding Beneficiary for Tilapia Rasing; and Mrs. Clarita
A. Bustarde of Gabaldon, Nueva Ecija, SRT Outstanding Beneficiary for
Onion Farming.
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Inauguration of QUEDANCOR
Library
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 Another highlight of the 2005
QUEDANCOR Anniversary Celebration was the inauguration of the QUEDANCOR
Library. The facility will serve as the central hub of information among
QUEDANCOR employees as well as a research center well-equipped to address
the inquiries of stakeholders coming from the academe, business entities
and fellow government offices.
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Corporate Publications Launched
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 QUEDANCOR likewise launched two
publications to showcase the Corporation’s success in becoming the
country’s premiere credit and guarantee agency. Entitled Willingness to
Serve: The SRT Story and QUEDANCOR: The Country’s Premiere Credit and
Guarantee Company, these books document the successful individuals who
benefited from the various loan programs of QUEDANCOR and the
chronological journey that the Corporation has undertaken from its early
years as the Quedan Guarantee Fund Board to its present status as the
national government’s main credit and financing unit. Guests at the book
launch included SEARCA Director Dr. Arsenio Balisacan and RBAP President
Senen Glorioso.
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Self-Reliant Team Agri-Fishery
Business Organization
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 The implementation of the
Self-Reliant Team (SRT) financing program has produced many successful
client-beneficiaries across the archipelago. In this regard, the
Corporation launched the SRT Agri-Fishery Business Organization with the
objective of integrating SRTs into the cooperative system. In the process,
SRT farmers and fisherfolk can further maximize their income and engage
into other high-earning activities.
Initially launched in Butuan City, Agusan del Norte, the affair was
participated by 225 SRT Team Leaders from 13 municipalities and three
cities in the CARAGA Region. The program has been implemented nationwide
in coordination with the Cooperative Development Authority and the
Agricultural Credit Policy Council. The program is expected to fortify
agri-fishery businesses all over the country in the years to come.
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Enhancing the Capacity of
Self-Reliant Teams
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QUEDANCOR in partnership with
SEAMEO Regional Center for Graduate and Research Study in Agriculture (SEARCA),
embarked on the implementation of the second phase of SRT leaders'
training entitled Skills Enhancement and Social Awareness of SRT Leaders.
A total of 13 Training Modules were conducted through out the country.
Around 391 farmers and fishermen participated in the said training which
basically tackled courses on business management, leadership and commodity
specifics such as sugar, rice, corn vegetables, onion, cotton, seaweeds,
swine and fisheries. The program is expected to be finished in April 2006.
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Hybrid Rice Intensification
Program
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QUEDANCOR participated in the
Department of Agriculture’s nationwide massive campaign on the Hybrid
Rice Program by conducting a synchronized Values Orientation Seminar with
DA’s Technical Briefing on hybrid rice. The financing program on Hybrid
Rice Cultivation Project was revised to enable the farmers to avail
fertilizer and hybrid rice seeds at cheaper prices on cash basis. From
within the P10,000 per hectare loanable amount, it shall include the cash
portion of P2,500 for Labor and P1,900 for the purchase of seeds.
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Upgrading of Corporate IT
Systems and Facilities
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 A well-balanced agency relies not
only on the innate ability and skills of its manpower to optimize
corporate efficiency. Of equal importance is the proper handling and
implementation of innovative technologies and facilities aimed at creating
doable systems in a competitive environment.
For the year 2005, the Information Technology Department (ITD) finalized
the QUEDANCOR Loans Management System (QLMS) with the objective of
improving loan delivery services in the Regional and District Offices. The
office pilot-tested the QLMS in Central Luzon.
Also, the office coordinated with the Commission on Audit regarding the
implementation of the Electronic New Government Accounting System (eNGAS),
which shall stabilize the framework for an effective and efficient
accounting system among public offices.
To be able to address the communication details of QUEDANCOR regarding its
transactions with field personnel and clientele, the office installed and
configured the Microsoft Exchange (SMPT/POP3) Server 2003 in order to
fully utilized the messaging system.
In addition, an Anti-Virus Server and Workstation was properly installed
as well as a Data File Server to maintain the uninterrupted flow of data
and information within the Corporation’s Central Office.
To make sure that each personnel of QUEDANCOR would be adequately equipped
with the necessary IT skills, the office also conducted staff development
training on proper preparation of training modules as well as computer
maintenance techniques.
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Beyond Corporate Frontiers
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Twenty seven years of unbridled
and dedicated service in providing affordable and accessible credit to
lowly farmers and fishers tested QUEDANCOR’s prudence, intelligence,
strength and staying power. Its struggle for maturity even escalated at
the turn of the new millennium brought about by both external and internal
factors. In the end, the agency’s top leadership provided the needed
strength and guidance to steer QUEDANCOR towards greater success.
The unchartered course undertaken by the agency proved fruitful. By
accessing the cash-rich capital market, QUEDANCOR was able to drum up
bigger funding to fuel its innovative programs. Through a number of
rediscounting facilities and purchase of promissory notes made available
by banking partners, the office perked-up its loan performance. Short and
long term liabilities as well as the flotation of corporate and
multi-series bonds gave QUEDANCOR an oasis of funding source.
To fully utilize the flow of fund sources, QUEDANCOR expanded corporate
reach by boosting its personnel complement and increasing the number of
its provincial offices. This is even capped with the implementation of the
Self-Reliant Team financing programs primarily conceived to address credit
needs of marginalized members of the agri-fishery sector ordinarily not
serviced by formal financing institutions.
These strategic policies undertaken by top management are but part of a
grand design. QUEDANCOR has underwent the initial phase of fund stability.
The next step is continuing program enhancement .
This can be achieved by first rationalizing credit programs, and then
intensifying program focus on priority crops and commodities. Employing
efficient and workable systems technology on program monitoring and
recording shall likewise be of priority. Continuing skills development and
technology transfer is another key component that the agency will focus
on.
At homefront, corporate stability shall be maintained through the constant
review and monitoring of corporate systems. Decentralization will still be
the primary call of duty. Better fiscal management shall be strictly
observed particularly in the custodianship of both corporate and borrowed
funds.
Finally, to ensure the re-flow of funds and corporate liquidity, the
agency shall strengthen its collection campaign through the
institutionalization of better remedial measures on problem accounts,
including the provision of condonation programs to delinquent borrowers.
Strengthening legal measures on handling problem accounts shall likewise
be an added scheme to improve collection.
Overall, the events and the accomplishments in 2005 have made QUEDANCOR
wiser and more mature. It discovered its vulnerable areas and made some
strategic adjustments to further solidify its financial standing and
performance in the capital market as well as in the agricultural sector.
For 2006, the Corporation expects more challenges and hopes to achieve
greater heights for the sector. The loan target for the year is P6.8
billion. QUEDANCOR has the expertise, experience and infrastructure to
attain these goals. It will continue to fine-tune programs and systems and
re-engineer its corporate culture.
Another five years from now, QUEDANCOR sees a far more mature agency.
After expanding its corporate presence, the agency shall witness a strong
corporate system backed up by a manageable workforce and a stable
financial base.
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Financial Statements
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In terms of regional performance,
Region 6 registered the highest loan performance amounting to P844
million. It was followed by CARAGA with P537 million and Region 9 with
P496 million. Autonomous regions like the Cordillera Autonomous Region and
the Autonomous Region for Muslim Mindanao, which are being serviced by
nearby district and regional offices, received P56 million and P42
million, respectively. 
Credit and guarantee operation is a two-pronged system. On one end is loan
generation, on the other is collection. Both require stringent measures to
ensure capital stability.
QUEDANCOR joined the Department of Agriculture and the National
Agricultural Fishery Council in the campaign to intensify the use of
organic fertilizer. The program, dubbed as “Organikong Abono Project” is
the DA’s Organic Fertilizer Program. QUEDANCOR, for its part, provided
loans and credit packages to farmers involved in the Self-Reliant Team
Financing Program thru a seed fund of P15 million.
The National Confederation of Cooperatives (NATCCO) forged an agreement
with QUEDANCOR and the Cooperative Development Authority (CDA) in
providing financial assistance to local
cooperatives throughout the country. Under the agreement, NATCCO will
monitor and facilitate the implementation of the different credit
programs. NATCCO will provide 50% of the total estimated project cost to
those who are willing to set-up cooperatives in the area, while QUEDANCOR
and CDA will shoulder the remaining half. 
QUEDANCOR inked an agreement with the Provincial Government of Leyte
represented by Governor Carlos Jericho L. Petilla to intensify its fishery
program in the region. A similar program is likewise launched in the
Municipality of San Julian, Eastern Samar through the efforts of Mayor
George N. Erroba. A total of P2 million investment tie-up went to the
region. 
A Memorandum of Agreement between QUEDANCOR and the Provincial Government
of Tarlac (PGT) was also signed on May 25, 2005 to finance agricultural
projects of farmers and other entrepreneurs and the purchase of agri-machinery
in Tarlac Province. The PGT has allocated P6 million fund to partially
shoulder the MOOE and other related expenses in the implementation of the
first agreement.
To boost local production of fresh mangoes in the Philippines, QUEDANCOR
engaged itself in the propagation of these export champion crops
particularly in the province of Bohol. Mayor Manuel Tan of Duero, Bohol is
the recipient of a P1 million seed fund under the Corporation’s High Value
Crops Program. 
Specific to this is the involvement of UCPB when it acted as Issue Manager
and Lead Arranger for the issuance and placement of up to P1.0 Billion
bonds to finance QUEDANCOR’s viable agricultural projects for state
employees. The Management also sealed an agreement with UCPB and
participating bank-investors for the issuance of the P750 million first
tranche of the P1.5 billion Asset-Backed Corporate Notes.
QUEDANCOR also entered into a Memorandum of Agreement with the Department
of Agriculture for the fund transfer of P1 Billion to implement the
QUEDANCOR-ACEF related projects. The ACEF is a special fund created under
Section 8 of Republic Act 8178 known as the Agricultural Tariffication
Act. 
