MANILA, Philippines — The Department of Finance (DOF) wants the National Food Authority (NFA) to explain why it failed to procure palay from local farmers last year to augment its buffer stock despite the availability of funds and a standby credit facility.
In a letter to NFA administrator Jason Aquino, Finance Assistant Secretary Soledad Emilia Cruz questioned why the NFA procured only 6,331 metric tons (MT) of palay from April to June 2017 when it reported that its rice buffer stock was approaching critical levels.
The procurement was way below the 22,552 MT of palay estimated by the NFA that should have been procured during the period, according to Cruz.
She pointed out that actual palay procurement in the second half of 2017 reached only 13,714 MT, lower than the 151,129 MT projection the NFA submitted to the DOF.
Based on the NFA’s financial records, Cruz said the agency received a P5.1-billion subsidy from the national government last year.
Of the amount, Cruz said P2.09 billion could have been used to procure rice to increase the NFA’s inventory. But the DOF found that the NFA used the funds to pay off its debt with the Land Bank of the Philippines and Development Bank of the Philippines.
Even without the subsidy, the DOF said the NFA had P1.3-billion balance as of March last year, and P3.58 billion worth of funds with national government guaranteed facilities during the same period.
For its debt-servicing requirements, Cruz said the NFA had P5.4-billion advance from the national government in 2017, which was endorsed by the DOF to the Bureau of Treasury.
The finance department also hit the NFA for revising its buying mix to favor rice imports over local farmers.
The NFA is required to keep a buffer stock good for 15 days at any given time and a 30-day buffer stock during the traditional lean months of July to September.
Budget Secretary Benjamin Diokno said the NFA’s decision to use its funds to pay off its debt instead of buying rice could be considered “malversation.”
“We gave them money to buy rice, they did not buy. They instead retired their debt. I think they are being investigated for that by Congress. There are congressional hearings so they have to answer to that. To me, that’s tantamount to malversation of funds,” Diokno said. – With Louise Maureen Simeon, Rhodina Villanueva, Jack Castaño, Jun Elias