More than two weeks after conducting a tender for 300,000 metric tons (MT) of rice under a government-to- government (G2G) scheme, Manila said it will no longer import the staple as officials deem the nationwide stockpile sufficient for the lean season.
State-owned Philippine International Trading Corp. (PITC) has cancelled the transaction following the recommendation of the Department of Agriculture (DA) that G2G importation is no longer needed as there is no impending rice shortage.
Vietnam, Myanmar, Thailand and India participated in the June 8 bidding for rice supply worth P7.45 billion. Since then, the participants were left hanging as the the lack of legal cover made it difficult for the PITC to proceed with the rice purchase.
Under the rice trade liberalization (RTL) law, which deregulated the Philippine rice industry, the President would authorize G2G importation via the declaration of a rice shortage.
Agriculture Secretary William D. Dar said in April that the G2G importation was the brainchild of the DA. During that period, the private sector’s supply of imported rice was tight due to a short-lived export ban imposed by Vietnam and the impact of Covid-19 on logistics.
”Under the rice tariffication law, the PITC is the agency tasked to merely implement any directive from the DA to import rice under a G2G arrangement,” Trade Secretary Ramon M. Lopez said in a June 26 statement.
”It will be recalled that the initial decision for the G2G importation plan was a result of the potential threat to maintaining a good buffer supply rice of the country. Earlier computations from DA showed a threat to the targeted level of buffer stock following the imposed ban of rice exportation of Vietnam in April,” Lopez added.
The PITC still pushed through with the bidding despite Vietnam lifting the export ban in April, two months prior to the G2G tender, which it conducted online.
Letter to DTI
The DA said the PITC should have pushed through with the bidding since the department’s latest supply projections, which contains 10 scenarios for the year, were drawn up on June 19, more than a week after the tender.
The DA said Dar made the recommendation that the G2G is no longer needed on June 24 through a letter to Lopez where the agriculture chief explained his department’s new rice supply projections for the year.
Under a base case scenario, the country would end the year with a 100-day carry over stocks while a worst-case scenario points to a 78-day stockpile by year-end, according to the DA.
“The situation, however, has been properly addressed with the lifting of the rice export ban by Vietnam and the rice import arrivals of around 1.3 million MT as of the third week of June,” Dar said in his letter to Lopez.
The DA said the private sector rice import arrivals ”are already sufficient to tide the country through the lean months” from July to August, when domestic palay harvest is minimal.
Three days after the bidding, the PITC issued an advisory saying that the issuance of notice of award to prospective rice suppliers will be held in abeyance pending the availability of funds from the Department of Budget and Management (DBM).
However, the BusinessMirror reported that the DBM could not give any funds to the PITC since it did not have the legal authority to undertake such a transaction.
On June 18, Presidential Spokesman Harry Roque disclosed that Dar and Lopez have submitted their request to the Office of the President to authorize PITC’s G2G importation.
On the same day, a DA official announced in a virtual briefing that the decision to push through with the importation depends on DTI alone since the transaction did not have the requisite legal cover.
The DA has reiterated that the G2G importation was approved by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases.
In April, Dar himself disclosed that the P7.45 billion budget for the ”contingency” rice procurement has been approved and has been given to the PITC.