NFA spends bulk of 2018 budget to pay off loans, not buy rice

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Metro Manila (CNN Philippines, September 3) — Most of the ₱7 billion budget set for the National Food Authority (NFA) in 2018 was used to pay loans instead of buying rice supply from local farmers.

This came out during the NFA budget hearing at the House of Representatives Monday, where lawmakers grilled agency officials on the status of rice in the country.

The NFA revealed that more than ₱6 billion was spent to repay loans — more than 90 percent of the NFA's budget allocation.

Congress gave the NFA the funds to ensure there is enough buffer stocks of the staple grain to last at least 30 days.

However, NFA Administrator Jason Aquino explained it was important to pay off loans used to buy and import rice in the previous years.

He said, "(There were) maturing loans so we had to address that. Lahat ng utang, maski government utang [All loans, even government loans], may interest. We had to pay for it, otherwise, credit line will be depleted. And we cannot support the procurement of palay and importation."

Aquino admitted the NFA was still in debt due to the high cost of rice importation.

He explained to lawmakers the NFA buys rice at ₱29 per kilo but only sells them at ₱25 per kilo.

In contrast, the representative of the farmers sector in the NFA council was lamenting how the NFA was buying rice from farmers at a low price.

Edwin Paraluman, a farmer himself, said the NFA was buying palay at just ₱17 per kilo.

He said this was why most local farmers would rather sell their palay to the private sector instead of the government.

"May apat na taon na kami nagpadala ng resolution seeking for an increase (in buying price)... What they are saying is that if we will increase the price of palay, it will be inflationary," Paraluman said.

[Translation: We have been sending resolutions seeking for an increase in the buying price of rice for the last four years... What they are saying is that if we will increase the price of palay, it will be inflationary.]

To which, House Committee on Appropriation chairperson Karlo Nograles said, "Ang lumalabas kasi dito talo tayo sa imported rice, natatalo tayo ng ₱4 (per kilo), pero import pa rin tayo ng import... With local procurement, kikita sana NFA... may natural bias di umano ang NFA sa imported rice kesa local palay."

[Translation: It appears we lose with imported rice, we lose about ₱4 per kilo, but we still continue to import... With local procurement, the NFA could earn... but it seems the NFA has a natural bias toward imported rice versus local palay.]

For his part, Agriculture Secretary Manny Piñol admitted there is a rice shortage in Zamboanga, Basilan, Sulu and Tawi-Tawi — collectively known as Zambasulta.

In August, Zamboanga was placed under a state of calamity due to the rice shortage where prices shot up to ₱70 a kilo in the villages of Manalipa and Pamucutan.

Piñol said these areas have relied on smuggled rice for an extended period of time.

However, a month ago, Malaysian authorities closed the ports of Sandacan and Labuang where the transshipments happen. This resulted in the scarcity of rice.

Pinol, however, said he has already asked the NFA to send additional rice stocks in the Zambasulta area.

RELATED: Agriculture chief: Zamboanga rice crisis is over

He also expects rice prices in the country to stabilize by November when the harvest season starts and the imported rice are shipped in the country.