NFA's announcement to import rice causes commission of graft -- Pangilinan
By Roel Tibay
Published Jul 13, 2018 09:08 pm
By Mario Casayuran
Sen. Francis Pangilinan said Friday the announcement by the National Food Authority (NFA) to import rice causes the commission of graft.
Sen. Kiko Pangilinan (via kikopangilinan.com | Manila Bulletin)
Pangilinan, president of the opposition Liberal Party (LP), issued the statement following an NFA announcement that it is considering importing another 500,000 metric tons (MT) of rice due to the depletion of the agency’s stocks.
NFA administrator Jason Aquino said his office would propose to the interagency NFA Council the importation of the 500,000 MT during the next Council meeting.
But Pangilinan fired off the following questions:
Who benefits from a premature disclosure to import huge volumes of rice? Rice traders who make a killing in the sudden spike in rice prices as well as corrupt government officials who receive kickbacks because of this artificial price spike. The premature announcement of rice imports will only exacerbate increase in rice prices to the detriment of the buying public, many of whom are poor.
Why is this so? The Philippines is one of the world’s largest importers of rice. Thus, when international rice traders get advance information regarding these plans, their response is to increase rice prices in anticipation of our purchases. This can be seen as price manipulation.
What should have been done? The plan to purchase or import rice should be a closely guarded secret and public disclosure made only when the bidding process is to be undertaken.
How else is the rice-buying public, especially the poor, disadvantaged by the early announcement? The expensive purchase of rice imports by government places the country deeper into debt since NFA rice purchases are paid through government borrowings.
The announcement has already been made, what can be done? Reject high bids. As chairperson of the NFA Council, we rejected bids that were too high. We rejected bids 4 times in a span of 1 year and a half. In the first instance, rice prices went down by 30 dollars per ton the week after the rejection. Overall, we saved the government P6 billion in rice imports and slashed the average price of rice imports by as much as 120 dollars per metric ton from 2010 prices.
Aquino had said his office is planning to submit the proposal as soon as possible.
‘’We do not want a repeat of what happened [in the past month,’’ he said.
The plan of NFA to import was made during the launch of NFA Kontra Abuso hotline last Thursday.
Aquino expected that once approved, ideal arrival would be October to December because during this time prices in the world market are low.
‘’We can get the best deals from foreign suppliers - low price but still good quality. It’s a win-win for us,” he added.
The NFA proposal is designed to boost its buffer stock inventory which is currently at 2.5 days only or about 1.6 million bags when it is supposed to have a 30-day buffer stock during the lean season.
NFA data showed that total consumption would reach 14.1 million MT this year but production is seen to reach only 12.26 million MT. This means that the 1.8 million MT shortfall will have to be imported.
“Unless they increase our buying price, we would need to resort to importation. We are also proposing for the increase in preparation for the lifting of the quantitative restriction,” Aquino said.
Sen. Kiko Pangilinan (via kikopangilinan.com | Manila Bulletin)
Pangilinan, president of the opposition Liberal Party (LP), issued the statement following an NFA announcement that it is considering importing another 500,000 metric tons (MT) of rice due to the depletion of the agency’s stocks.
NFA administrator Jason Aquino said his office would propose to the interagency NFA Council the importation of the 500,000 MT during the next Council meeting.
But Pangilinan fired off the following questions:
Who benefits from a premature disclosure to import huge volumes of rice? Rice traders who make a killing in the sudden spike in rice prices as well as corrupt government officials who receive kickbacks because of this artificial price spike. The premature announcement of rice imports will only exacerbate increase in rice prices to the detriment of the buying public, many of whom are poor.
Why is this so? The Philippines is one of the world’s largest importers of rice. Thus, when international rice traders get advance information regarding these plans, their response is to increase rice prices in anticipation of our purchases. This can be seen as price manipulation.
What should have been done? The plan to purchase or import rice should be a closely guarded secret and public disclosure made only when the bidding process is to be undertaken.
How else is the rice-buying public, especially the poor, disadvantaged by the early announcement? The expensive purchase of rice imports by government places the country deeper into debt since NFA rice purchases are paid through government borrowings.
The announcement has already been made, what can be done? Reject high bids. As chairperson of the NFA Council, we rejected bids that were too high. We rejected bids 4 times in a span of 1 year and a half. In the first instance, rice prices went down by 30 dollars per ton the week after the rejection. Overall, we saved the government P6 billion in rice imports and slashed the average price of rice imports by as much as 120 dollars per metric ton from 2010 prices.
Aquino had said his office is planning to submit the proposal as soon as possible.
‘’We do not want a repeat of what happened [in the past month,’’ he said.
The plan of NFA to import was made during the launch of NFA Kontra Abuso hotline last Thursday.
Aquino expected that once approved, ideal arrival would be October to December because during this time prices in the world market are low.
‘’We can get the best deals from foreign suppliers - low price but still good quality. It’s a win-win for us,” he added.
The NFA proposal is designed to boost its buffer stock inventory which is currently at 2.5 days only or about 1.6 million bags when it is supposed to have a 30-day buffer stock during the lean season.
NFA data showed that total consumption would reach 14.1 million MT this year but production is seen to reach only 12.26 million MT. This means that the 1.8 million MT shortfall will have to be imported.
“Unless they increase our buying price, we would need to resort to importation. We are also proposing for the increase in preparation for the lifting of the quantitative restriction,” Aquino said.