MANILA, Philippines--The National Food Authority has already used P6.9 billion in import-tax subsidies from the national government in the first four months of the year, representing the amount it used to settle liabilities to the Bureau of Customs arising from its rice imports.

The NFA subsidies constituted 92 percent of the P7.5 billion in tax expenditure fund (TEF) allocated by the national government to the NFA for the full year.

The government grants TEF to selected state-owned firms. The TEF is used to help the firms pay taxes and duties to the BOC and the Bureau of Internal Revenue.

Under a system using TEF in paying obligations, the Department of Budget and Management issues a document to a government agency or corporation, which the latter uses to settle taxes or import duties.

The TEFs used are recorded as "expenditures" of the recipient agencies and are booked as revenues of the BIR or the BOC.

The NFA earlier reported that it imported 1.71 million metric tons of rice from January to April. Imported rice is slapped a 50-percent tariff by the BOC.

Government projections showed that the NFA would likely post losses of between P29.5 billion and P43.1 billion this year due to rising cost of imported rice. The lower end of the estimated losses would ensue if the price of imported rice averaged $700 a metric ton. The higher end assumes an average price of $1,000 a metric ton.

The NFA said it could not avoid posting losses because of the nature of its mandate, which says the agency should help ensure the stable supply and price of rice in the country.

To fulfill its role, the NFA said it was being forced to buy imported rice, even if prices in the world market are rising, and sell at a lower price. The NFA said it should not be blamed for its losses, which had been a drag in efforts to improve the overall fiscal position of the national government and other public entities.

The NFA said an amendment of its charter was required if it were to put an end to its financial woes.

One amendment earlier raised was to tap a group from the private sector to handle the trading function of the NFA so that the agency could focus on its role of regulating rice traders. Such a proposal, however, is seen disadvantageous to consumers who are dependent on the cheap rice sold by the NFA.

Economists said the rising cost of rice in the world market was brought by weather-related problems that disrupted production, as well as the rising demand for the staple due to mainly to the growing economies of China and India.