Food Terminal Inc. Executive Summary 2021
Food Terminal Inc. Executive Summary 2021
Food Terminal Inc. Executive Summary 2021
INTRODUCTION
Food Terminal, Inc. (FTI), formerly Greater Manila Terminal Food Market (GMTFM), is
located in a military reservation site at Fort Bonifacio (Taguig portion), Metro Manila.
The GMTFM was 100 per cent owned by the Development Bank of the Philippines
(DBP) and was registered with the Securities and Exchange Commission (SEC) on May
3, 1968 under SEC Registration No. 3517. On March 27, 1974, its Articles of
Incorporation was amended renaming GMTFM to FTI. In April 1979, FTI was assigned
by DBP to Human Settlements Development Corporation (HSDC). In April 1980, by
virtue of Letter of Instructions No. 1013, FTI was attached to the National Food Authority
(NFA) and became its wholly-owned subsidiary effective January 14, 1981 under
Presidential Decree (PD) No. 1770.
FTI is being managed by a President and assisted by three Vice Presidents. Its policy
making body is the Board of Directors (BOD) consisting of 10 members, as of December
31, 2021, including those coming from different sectors and other government agencies
directly appointed by the President of the Philippines. The organizational structure of
FTI was based on the Development Academy of the Philippines (DAP) study,
commissioned by FTI in Calendar Year (CY) 2010, which provided for 120 plantilla
positions.
On October 29, 2012, the Privatization Management Office (PMO) sold, thru public
bidding, approximately 74 hectares of FTI property for P24 billion to Ayala Land, Inc.
(ALI). As of December 2013, the divested property was 100 per cent turned over to ALI.
As of December 31, 2020, total managed land of FTI is 38.952 hectares.
In July 2017, FTI sold another 3.458 hectares of the Taguig property to the Department
of Transportation (DOTr), to make way for DOTr’s Integrated Transport System project.
The divestment of FTI assets resulted in the downsizing of its operations and
streamlining of manpower. Hence, from the workforce of 92 employees in CY 2011, it
was reduced to 28 employees as of December 31, 2021.
On May 2, 2018, FTI’s corporate life was extended for another 50 years or until May 2,
2068. With the renewal of its corporate life came a new mission and vision statement, to
wit: “By 2023, FTI is the leading food processing and distribution hub in strategic
locations nationwide.” The Corporation is engaged primarily to: (a) maintain and operate
a general market for producers, manufacturers and farmers covering, among other
things, the buying, selling, trading and dealing in wholesale of groceries, provisions, food
and foodstuffs, wares, vegetables, fruits, cereals, grains and other farm products and all
other articles and things incidental to a general product and all other articles incidental to
a general grocery, food supply, meat, poultry, fish, game, vegetable, product and
provision, general mercantile, as well as bakery products; and (b) carry on the business
of buyers, sellers, importers, and brokers of food produce, domestic and foreign, of all
descriptions.
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the farmers and fisher folks in prolonging the shelf life of their products. Despite the RFT
project, FTI continues to maintain and operate its 24-hectare Special Economic Zone in
Taguig, which has been the core business of the Agency since 2004.
The Agency’s registered office, which is also its principal place of business, is located at
2nd Floor FTI Administration Building, FTI Avenue, Lot 55, East Service Road, Western
Bicutan, Taguig City.
The financial statements (FSs) of FTI as at and for the years ended December 31, 2021
and 2020 were authorized for issue by the BOD on March 21, 2022.
SCOPE OF AUDIT
The audit covered the examination, on a test basis, of the accounts and financial
transactions of FTI for the period January 1 to December 31, 2021 in accordance with
the International Standards of Supreme Audit Institutions (ISSAIs) to enable us to
express an opinion on the fairness of the presentation of the FSs for the years ended
December 31, 2021 and 2020. Also, we conducted our audit to assess compliance with
pertinent laws, rules and regulations, as well as adherence to prescribed policies and
procedures.
AUDITOR’S OPINION
We rendered an unmodified opinion on the fairness of the presentation of the FSs of FTI.
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SIGNIFICANT AUDIT OBSERVATIONS AND RECOMMENDATIONS
2. FTI has been deprived of the productive use of its 11.800 hectares property
valued at P15.541 billion and has not realized additional income in the form of
cash override representing not less than fifty per cent (50%) of all consideration
from tenants occupying spaces inside the commercial portion of the proposed
Project, due to the non-implementation of the Memorandum of Agreement (MOA)
executed and entered into on April 16, 2004 with the local government unit (LGU)
of Taguig for the usufruct of parcels of lot for a mixed-used real estate
development project, with socialized housing and commercial components.
3. The payments of medical benefits, mid-year bonus and salary increases to FTI
officers and employees in the amounts of P3.679 million; P3.774 million and
P2.479 million, respectively, or a total of P9.932 million for CYs 2018 to 2021
were without legal basis and contrary to the provisions of COA Resolution No.
2005-001 dated February 3, 2005, specifically on the payment of medical
benefits; COA Circular No. 2012-003 dated October 29, 2012; Memorandum
Circular (MC) No. 2018-03 dated May 9, 2018 issued by the Governance
Commission for Government-Owned or Controlled Corporations (GCG);
Republic Act (RA) No. 10149, otherwise known as the “GOCC Governance Act
of 2011”; and other compensation laws, rules and regulations.
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3.1. We recommended that Management:
a. Secure from the Office of the President (OP) of the Philippines authority to
grant the subject benefits and salary increases or require the officers and
employees concerned to refund the amounts received to avoid issuance of
Notice of Suspension (NS)/Notice of Disallowance (ND);
Of the 35 audit recommendations embodied in prior years’ Annual Audit Reports (AARs),
10 were fully implemented, 16 were partially implemented and 9 were not implemented.
Details are presented in Part III of this Report.
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