By Bernadette D. Nicolas & Jasper Emmanuel Y. Arcalas
THE Philippines’ s 300,000-metric ton (MT) rice importation via government-to-government (G2G) transaction is now in limbo as the Philippine International Trading Corp. (PITC) had no legal authority to conduct the tender, officials told the BusinessMirror.
Budget Secretary Wendel E. Avisado said they could not provide the budget requirement of P7.45 billion as the PITC tender had no legal basis since President Duterte has not greenlighted the rice importation.
“We already officially responded to Department of Agriculture/PITC on the matter. We need the prior approval of PRRD [President Rodrigo Roa Duterte] because there’s no legal basis to import rice. They should be the one to seek authority from PRRD. If they have it, then we will comply on our side,” Avisado said in a message in a mix of English and Filipino.
The Department of Agriculture (DA) and the National Food Authority are providing technical advice to the PITC regarding the G2G importation since they have been involved with rice importation, especially G2G, prior to deregulation of the rice industry.
Budget Undersecretary Tina Canda also questioned the legality of the PITC rice importation, arguing that the attached agency of the Department of Trade and Industry and even the DA itself have no mandate to import.
“PITC needs to have a mandate to import. With RCEF, even DA has no mandate. “The first question you need to ask is the authority of PITC vs RCEF law,” Canda said, referring to the Rice Tariffication Law which mandates the government to annually appropriate P10 billion to fund RCEF, which was meant to support rice farmers.
Even if PITC has already conducted the bidding, Canda said several issues hound the PITC importation, including the lack of funding source and the legality of the whole transaction.
Budget Undersecretary Laura Pascua said the DBM returned the request of PITC, “commenting that the Rice Tariffication Law requires an approval by the President of any importation, and there is no item in the GAA [General Appropriations Act] which can be augmented to fund the request.”
Pascua said she was also surprised with this development as she recalled Agriculture Secretary William D. Dar saying that the 3.3 million metric tons supply deficit from the estimated production of 17.6 million metric tons can be raised from the P8.5 billion that the DBM released for the rice resiliency project.
The P8.5-billion fund is part of Covid-19 releases and is on top of the RCEF.
In a June 11 advisory, PITC said it is holding in abeyance the issuance of notice of award to prospective rice suppliers to the country pending the availability of funds from DBM. This, even after it already conducted the bidding.
The PITC also said the “submission of bids shall not be construed as a commitment to purchase on the part of PITC and shall not be bound to award contract to any entity based on bids received.”
The PITC has also published the results of its evaluation of bids submitted by the four Asian governments.
The PITC document showed that only 105,000 MT out of the 300,000-MT target importation had qualified bids. Only three lots—Manila, Cebu and Davao—had ranking bids, with the remaining lots of Tacloban and Zamboanga having no successful bids.
‘Better scrap it’
Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor said it would be better for the government to scrap the G2G transaction given the complications.
The government could explore other options to procure rice stocks, particularly to replenish the depleting supply of the National Food Authority, to stabilize market prices, he added.
Some of the options Montemayor explained, are buying a certain volume of imports by the private sector at their declared price and purchasing local rice from millers or traders through bidding.
“Current rice supply is quite tight but sufficient. Our only problem is that NFA stocks are depleting. And imports are quite expensive, so prices might go up in the lean months and the government has limited stocks to stabilize,” he told the BusinessMirror.
Montemayor agreed DBM’s argument in questioning the legality of the PITC importation.
Last month, FFF questioned this, stressing that there is no declaration of a rice shortage, a condition required under the law for government importation.
“But I suppose they can find the legal basis they need. Maybe DBM is more concerned about the funds given the tight situation now with Covid-19,” Montemayor said.
“If DBM releases funds, it will be a sunk cost and will be a grant to PITC,” Montemayor added.
Nonetheless, Montemayor said it was “shameful” to have conducted the bidding without even holding the necessary funds for the transaction. “Those who bid spent time and money to participate, only to be told later that there is no money yet to buy the rice. Worse, it’s government to government,” he said.
Agriculture Secretary William D. Dar told the BusinessMirror via SMS that he has yet to talk with PITC on the issue.
The Department of Agriculture (DA) and the National Food Authority are providing technical advice to the PITC regarding the G2G importation since they have been involved with rice importation, especially G2G, prior to deregulation of the rice industry.
In April, Dar said the budget for the P7.45-billion rice importation has been approved and has been given to the PITC. Dar said the idea for the G2G rice importation came from the DA and the NFA to ensure the country has sufficient stockpile amid the Covid-19 pandemic.
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