The National Food Authority (NFA) will borrow another P8 billion to meet its expenditure requirements this year, particularly for more rice importation and payment of maturing obligations, Finance Undersecretary Jeremias Paul Jr. said.

The NFA will use credit lines with banks to raise the P8 billion, which will be on top of P8 billion it raised in February from a sale of long-term bonds that carried a sovereign guarantee, Paul said.

Paul said the NFA?s financial woes were a natural consequence of its mandate to ensure a steady supply of affordable rice?selling rice at lower-than-market prices even if it buys it at high prices.

He said the NFA posted a budget deficit of P2.6 billion last year. The deficit is expected to widen this year, given rising prices of rice in the world market.

Earlier projections showed the NFA deficit could reach P43.0 billion this year, but Paul said the latest estimates indicated it would be P35.8 billion, given the measures the NFA has taken to address its financial problems.

To cover its deficit, the NFA?s debts have ballooned to about P36 billion.

One of the measures taken by the NFA to address its financial woes is introduction of rice varieties that it sells at higher than the support price of P18.00 per kilo. The NFA is selling a variety at a P25.00 per kilo and plans to introduce another variety that it will sell at P33.50 per kilo.

Paul said selling rice at varying prices would help the NFA trim its expected losses for the year.

The borrowings will help the NFA complete its target of importing 2.1 million metric tons of rice this year. Paul said the NFA would buy 400,000 metric tons from domestic producers.

To help it cope with its losses, the government has decided to effectively exempt the NFA from taxes on rice imports, Paul said. Edited by INQUIRER.net