MANILA, Philippines - A proposal that would entail the government absorbing the National Food Authority’s estimated P165 billion ($3.7 billion) debt needs careful study, according to Finance Secretary Cesar Purisma.
“It has to be studied. If we can absorb it why not but we need to review the role of NFA first,” Purisima said when asked to comment on the proposal of Presidential Assistant for Food Security and Agricultural Modernization Francis Pangilinan to resolve the ballooning debt of the NFA.
Purisima said the Finance Department, which oversees the operations of all government-owned and controlled corporations, has yet to rationalize the operations of the NFA.
Pangilinan said despite the subsidies from the government, the losses of the NFA continued to be substantial at P165 billion, largely due to the agency’s procurement of rice from domestic farmers and selling them at below market price to subsidize poor consumers.
Much of the losses can be traced to NFA’s reliance on rice imports that were tainted with questionable transactions.
Pangilinan said the government’s rice subsidy program must be reviewed to put a stop to the NFA’s steadily increasing obligations.
He said the NFA’s debt could be itemized under the debt service allocation of the 2016 national budget.
The debt were incurred from various local financial institutions like Land Bank of the Philippines and Development Bank of the Philippines.
The government is increasing the importation of rice this year to have sufficient buffer stock during the lean season and to drive down rising prices purportedly caused by unscrupulous rice trading practices.
The Foundation for Economic Freedom earlier cited the need for the Philippines to abolish import quotas on rice, adhere to the country’s commitments to the World Trade Organization and desist from subsidizing the losses of NFA from the pockets of consumers.