MANILA, Philippines – If the price of rice remains high in the world market, the Philippine government may have to shift its focus from importation to an increase in domestic production.
Interviewed by the Wall Street Journal last Sunday, President Arroyo admitted that the role of the National Food Authority (NFA) may have to change depending on world rice prices.
The Philippines has been importing rice heavily from major rice producing countries such as Thailand, Vietnam and the United States to prop up domestic supply.
However, the price of rice in the world market has gone up by more than 100 percent since the start of the year as demand increased and some exporting countries have placed caps on their export volume.
Press Secretary Ignacio Bunye quoted the President as saying that if the current situation continues, it would make sense for the country to produce more rice.
“But that’s talking in the long-term. The short-term is to put food on the table and in that instance, the NFA will play an important role,” he said.
The rise in the price of rice in the world market has put a strain on the bottom line of the government as it continues to subsidize this commodity for the poor in order to keep domestic prices stable.
The President said that what happened was a “global wake-up call.”
Mrs. Arroyo noted that the role of the NFA would definitely have to change if ever the decision is made to shift to self-sufficiency.
However, the President remained optimistic that the situation would improve as early as the second half of the year, based on what analysts have been forecasting.
Bunye pointed out that there is already talk of countries removing their restrictions on exports, which would help boost supply and consequently ease the rise in the prices.
“Locally, the harvest is seen to be good in the second half,” Bunye said.
Earlier, Finance Secretary Margarito Teves said NFA debt could reach P43 billion this year if the present trend continues. The administration has been resorting to huge subsidies to the poor to enable them to cope with rising fuel and food costs, risking its target of wiping out the deficit this year.
Not a dole-out
Malacañang also clarified that the P5 billion allocated this year for benefits to the poor is not a dole-out but is part of the conditional cash transfer certificate (CCTC) program of the government for this year.
Bunye pointed out that the P5 billion was already programmed at the start of the year.
According to the DSWD, the P5 billion would benefit approximately one million children of the Ahon Pamilyang Pilipino (APP) program.
The faith-based organization Caritas Manila has criticized the government for what it perceived to be a direct cash subsidy to the poor that would foster laziness and over-dependence on the government.
The opposition likewise lambasted the move, saying it was just another publicity stunt.
But Bunye explained that the APP program utilizes the CCTCs which, as its name implies, carries conditions for the receipt of benefits.
The DSWD explained that the APP offers cash grants for health and education for the beneficiaries.
Under the health package, a household is entitled to P6,000 a year or P500 per month provided that they bring their children to the health center for check-ups and vaccinations.
For the education cash grant, P3,000 is provided for 10 months or P300 monthly per child provided their children attend school at least 85 percent of the time.
A maximum of three children per household is covered by the package. A household with three qualified children would receive a subsidy of P15,000 annually.
“This is not a dole-out. There are conditions in order for you to avail of these benefits,” Bunye said.
Bunye pointed out that the DSWD uses automated teller machine (ATM) cards for distributing the cash benefits.
“We’re definite that the conditions like enrollment and inoculation are prerequisites for the continued availment of these benefits,” Bunye said.
Political gimmickry
The United Opposition (UNO), however, said that fighting poverty requires an honest-to-goodness campaign against graft and corruption in government and not mere politically-motivated dole-outs, which is the same position taken by the Catholic Church and other civic groups.
Makati City Mayor Jejomar Binay, who is also president of UNO, said the Arroyo government should instead provide jobs and efficient social services to poor Filipinos and take strong steps to prevent further increases in the prices of basic commodities such as rice and other food items.
“It is unfortunate that no amount of publicity gimmick will improve the approval ratings of President Arroyo. What she must do is provide good governance that will give better social services to the poor and job opportunities to the unemployed. This can only be achieved by eradicating graft and corruption in this government,” he said.
“The P5-billion government aid program is good primarily as a public relations tool,” UNO spokesperson Adel Tamano added.
“The first step that must be done in an authentic poverty alleviation program is to rid the Arroyo administration of corrupt and inept officials who got us into this mess in the first place,” he said.
Tamano explained that the so-called Ahon Pamilyang Pilipino was designed by palace publicists to improve the plunging approval ratings of President Arroyo among the poor, noting a provision in the program requiring that Malacañang should identify the beneficiaries of the aid.
“The entire scheme was obviously politically motivated. What is alarming are reports that Malacañang’s qualification and identification of poorest of the poor would target only 300,000 families. This is much too low and implies that only a minuscule number of poor families deserve attention,” he said.
San Juan Mayor JV Ejercito, UNO National Capital Region chairman, deplored the apparent lack of transparency and accountability in the implementation of the P5-billion aid program.
“It is anti-poor, gives the poor no dignity, and only breeds dependency,” Caritas Manila Executive Director Fr. Anton Pascual said.
He explained that teaching the poor to be dependent was not part of the long-term solution to the soaring costs of basic necessities, especially food.
Lawmakers to the rescue
But senior members of the House of Representatives came to Malacañang’s rescue and said that the P5-billion “conditional cash transfer” program is a “handout” intended to benefit the country’s poorest of the poor.
“When Malacañang sent the 2008 budget to Congress in July 2007, one of the new programs that was contained therein was Ahon Pamilyang Pilipino which is how the cash transfer came to be known,” said Quirino Rep. Junie Cua.
Cua said the program is neither an invention nor a knee-jerk response to the rice crisis, but a social safety net program successfully carried out in 20 countries and was proposed for local implementation as early as 2006.
Fellow Reps. Elpidio Barzaga of Cavite, Ferjenel Biron of Iloilo and Giorgidi Aggabao of Isabela joined Cua in his statement. They said they could not understand how such program can be dubbed as “anti-poor” by government skeptics and critics.
“I don’t really know how they will reconcile dole-outs. They are against dole- out but they accept donations,” Barzaga said. “I can’t imagine how giving taxpayers’ money to the needy be deemed anti-poor. That’s no different from grocery and food coupons being given out to the poor by the US government and many welfare states. Branding it as anti-poor – that is anti-poor,” Aggabao said.
The “direct intervention scheme” would ensure that all funds will go to the poor and “not be diluted by costly overheads,” he added.
He, however, admitted that the program’s “only weakness” is that due to funding constraints it can only cover seven percent, or 300,000 families of the 4.7 million poor households. He refuted charges the program would promote a culture of dependence on the government.
“These are the poor who are at wit’s end due to hunger and whose last meal was probably two days ago. In a perfect world, it’s better to teach them how to fish than to give them fish. But you don’t give a Powerpoint presentation on how to fish to a hungry man,” Cua said.
“A dying man needs fish to eat, not a fishing lesson. So, you must feed him first with fish and when he is well enough, then teach him how to fish. That’s the way to do it,” the senior lawmaker added.
“The APP is meant to give a little help to people who, despite their industry, have not gotten the lucky breaks in life,” he said. The conditional cash transfer model was first explored in Mexico’s Progressa (now Opportunidades) program in the 1990s, Cua said.
The program was hinged on a family receiving a cash transfer if the children attend 80 percent of school days and was proven successful in increasing school participation rate.
It was replicated in many countries, in various forms, and with different beneficiaries.
By July 2006, the program had spread to 20 countries, with an annual budget of $8.2 billion, including middle-income countries such as Brazil (Bolsa-Família), Colombia (Familias en Acción), Chile, Ecuador, South Africa, Turkey and Jamaica.
Vietnam affirms commitment
Meanwhile, Vietnam has reiterated its commitment to supply the Philippines with the rice it needs, saying it has sufficient rice stocks. Prime Minister Nguyen Tan Dung, whose government has been battling double-digit inflation driven by the food and energy crisis for months, assured the steady stock of the grain in his country even as he threatened to punish hoarders and speculators for profit.
Agriculture Secretary Arthur Yap said officials of the Vietnam Food Association or Vinafood personally relayed the Vietnamese government’s reassurance to him last Friday during a courtesy call.
Vinafood and Thailand’s state-owned trading firm are expected to participate in the NFA’s May 5 tender for 675,000 metric tons of rice which would complete the NFA’s target buffer stock of 2.1 million metric tons this year.
Thai agricultural officials recently expressed interest in participating in the NFA’s forthcoming tender.
Vietnam had early this month signed a Memorandum of Agreement with the government to supply “up to 1.5 million metric tons of rice.”
However, in the past few tenders of the NFA, Vinafood’s offer bids have been nowhere near the volumes Vietnam had pledged.
Observers in the past tenders, though, speculate that Vietnam has been wisely observing the market and the Philippines’ willingness to pay higher prices. – Paolo Romero, Delon Porcalla, Michael Punongbayan, Marianne Go, Jose Rodel Clapano