THE NATIONAL Food Authority is seeking a tax expenditure subsidy from the government to cover the 50-percent tariff imposed on all rice imports and help the agency minimize its losses.

NFA Administrator Jessup P. Navarro said that last year, the NFA was able to save P12 billion in the importation of rice as the national government, in effect, shouldered the 50-percent tariff.

Navarro, however, declined to give estimates of import cost and possible savings for this year, saying that the continuous rise in the prices of the staple make it more difficult to set estimates. World prices of rice had jumped by 100 percent to some $400 per metric ton over the last five years.

In an interview, Navarro cited a provision in the national budget that allowed government-owned and/or -controlled corporations to apply for a tax expenditure subsidy. This is on top of the agency's annual budget, he added.

In effect, the NFA can finance its grains procurement and pay for the tariffs on rice imports using available funds under the Tax Expenditure Fund, which forms part of the national government's annual budget.

This mechanism allows the food agency to support its mandate of ensuring the country's rice sufficiency through importation and make the staple affordable to consumers by re-selling the imported stocks at lower prices.

Navarro said the NFA would file its application with the Fiscal Incentives Review Board as soon as the bulk of the rice imports it has contracted arrive in the country.

The NFA had conducted two tenders --one in December 2007 and another in January 2008-- for the supply and delivery of 876,700 MT of rice from Vietnam and Thailand. Shipments are expected to be completed within the first half of the year.

This week, the agency will hold a tender for the supply and delivery of 550,000 MT of rice, the bulk of which is expected to come from Vietnam.

Under the NFA's earlier projection, rice importation this year was expected to hit 1.6 million metric tons.

However, Navarro said the import volume could reach 1.8 million, or about the same as last year's level, given the assurance given by the Vietnam government that it could provide the Philippines with as much as 1 million metric tons of rice.