NFA seeks P32-B budget for buffer stocking

MANILA, Philippines — The National Food Authority (NFA) needs at least P32 billion to fulfill its buffer stocking mandate amid a new rice regime and to ensure that its debts will not further balloon.

In an interview, NFA officer-in-charge administrator Tomas Escarez said they recently met with the Department of Budget and Management to propose additional subsidies for them to continue buying local palay (unhusked rice).

“We need P32 billion to reach our target next year of 1.6 million metric tons, good for the 30-day buffer stock required,” Escarez told The STAR.

Based on the implementing rules and regulations of Republic Act 11203 or the Rice Liberalization law, NFA is tasked to maintain the 15 to 30 days buffer stock level through local procurement only.

The interagency NFA Council is already commissioning a study to determine NFA’s optimal buffer stock for emergency and relief purposes. Unless completed, NFA will maintain the 30-day buffer.

Right now, NFA continues to buy palay from farmers at P20.70 per kilogram, much higher than the buying price of private traders which already dropped to as low as P14 a kilo.

With the current buying price, Escarez said NFA should sell  rice at P37 to breakeven. The NFA Council, however, has yet to approve a higher selling price.

“So far we still have money to buy, we are using our corporate funds. DBM is also monitoring in case we’ll  be needing more,” Escarez said.

“They said they would study the proposal, but they also gave us options, among which is to borrow from banks,” he said.

This year, NFA has only allocated P7 billion for local procurement, but that is only good for 325,000 MT.

NFA is now focused on buying palay.  It has breached the three-million bags mark, prompting it to use its corporate funds and borrow from banks.

Escarez said NFA has yet to determine if its debt would significantly increase by the end of the year.

As of 2018, NFA’s debt reached P140.5 billion compared to a high of P165.6 billion in 2010.

From 1973 to 1985, the NFA only  incurred  P459.8 million in loans. From 1986 to 1991, it secured P4.9 billion in loans, which slightly increased to P5.7 billion from 1992 to 1998.

It was from 2001 to 2010 when the NFA incurred the biggest debts at P165.6 billion.