The Federation of Free Farmers (FFF) on Wednesday questioned the legality of the Philippine International Trading Corp.’s (PITC) purchase of 300,000 metric tons (MT) of imported rice, saying there is no declaration of a rice shortage, a condition required under the law for government importation.
In a statement, FFF said the PITC’s planned government-to-government (G2G) rice importation could be ”irregular” as the government has not yet declared a shortage of the staple.
FFF cited Rule 6.4 of the implementing rules and regulations (IRR) of the rice trade liberalization (RTL) law which stated that the government could import rice through the PITC only ”in the event of a rice supply shortage.” Furthermore, FFF said President Duterte has not officially declared or issued a directive to the Department of Trade and Industry and the PITC to undertake a G2G rice importation.
FFF said the government’s Inter-agency Task Force Resolution 17 issued on March 30 ”merely endorsed to the Office of the President” the proposal to import rice via PITC as a ”contingency measure.”
The rule states that upon the instruction of the President, the DTI-PITC should ”expeditiously participate in the rice industry thru contracts with private traders that would purchase the needed rice supplies from domestic and foreign sources to enhance market competition and stabilize rice prices” in the event of a rice supply shortage.
IRR rule 6.4 elaborated the powers of the President as stipulated under Section 7 of the Republic Act 11203, or the RTL law, during a projected rice shortage in the domestic market.
The RTL law defines a rice shortage as a ”situation where the quantity available or the supply of the commodity in a market falls short of the quantity demanded or required at a given time.”
”Department of Agriculture [DA] Secretary William Dar has repeatedly maintained that there is enough rice,” said FFF National Manager Raul Q. Montemayor.
”If, as Secretary Dar implies, there is no rice shortage, then there is no legal basis for PITC to import rice under the RTL,” Montemayor added.
The DA maintained that the 300,000-MT G2G rice importation being undertaken by the PITC is a ”contingency” effort to ensure that the country has sufficient staple stocks when it enters the lean season of July to September.
FFF warned that disbursements made by the PITC for the importation could be disallowed by the Commission on Audit and its officials could be charged with graft if no proper legal basis for the G2G transaction is established.
FFF added that the the G2G importation could result in ”significant losses” for the PITC and the government and at the expense of rice farmers.
The group explained that PITC’s imports would have a landed cost of P25 per kilogram and if these are sold at the same retail price as NFA’s P25 per kg, then the attached agency of the DTI would incur losses of at least P5 per kilo or P1.5 billion. The losses include financing, storage, distribution and related costs, it added.
”Since PITC imports will presumably be exempted from tariffs, government will additionally forego P2.6 billion in tariff collections. In turn, farmers who are supposed to benefit from tariff collections on imports through the Rice Competitiveness Enhancement Fund will be shortchanged by P2.6 billion,” said Montemayor.
FFF said the P7.45-billion budget for PITC’s importation is even larger than the P7-billion palay procurement fund of the NFA. Under the PITC’s terms of reference, half of the 300,000-MT 25 percent brokens of imported rice must arrive not later than June 22 while the remaining volume must be delivered by suppliers not later than July 22.
The PITC has divided the import volume into four lots with corresponding port of discharges: Manila, Cebu, Tacloban, Zamboanga and Davao.
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