MANILA, Philippines ? The Philippines has increased the budget for its third rice tender for 2010 supply of 600,000 tons of white rice.

National Food Authority (NFA) spokesperson Rex Estoperez said in a phone interview that the agency had decided to jack up its budget for the rice tender on Dec. 1 to P18.525 billion from P15.264 billion.

The revised delivery schedule is between May and June. Originally, the delivery was slated for between February and May.

?The market is moving,? Estoperez said of the bids and awards committee?s reason for increasing the budget.

The change in the budget is an effect of the high prices quoted during the Dec. 1 tender, the first for a volume of 600,000 tons.

NFA officials had said after the auction that the prices quoted might force the Philippines to buy 100,000 tons short of the tender volume. It may also affect the budget for future tenders, they said.

?The approved budget is the limitation,? NFA director for marketing Romeo Jimenez told reporters.

Estoperez said there was a possibility the NFA would rethink the terms for future tenders.

The NFA budget for the first and second 600,000-ton tenders was set at P15.26 billion-- the same budget set for two future tenders of a similar volume. In dollar terms, the import volume may be procured if offers were about $540 per ton, including cost and freight.

However, based on the price offers at the Dec. 1 tender, ?NFA can award only 500,000 to 520,000 tons,? Jimenez said.

The lowest bid at the tender was $598 per ton, submitted by VinaFood Corp. of Vietnam (Vinafood2), Vietnam?s top rice exporter. This is $129.50 higher than the best offer of $468.50 a ton at the Nov. 4 tender for 250,000 tons.

The NFA may award contracts for 300,000 tons of white rice supply to Vinafood2, which offered the lowest bid of $598 per ton for 100,000 tons white rice. It also offered 100,000 tons at $630 per ton and at $648 per ton.

Vinafood2 had three other offers of 100,000 each with a price range of $666 to $687 a ton, but these were higher than the offers of other suppliers.

Chaiyaporn Rice & Food Co. Ltd. of Thailand offered 100,000 tons at $639.95 per ton.

Louis Dreyfus Commodities Asia Pte. Ltd. offered 100,000 tons at $599 per ton, the second-lowest bid. It plans to source 70,000 tons from Pakistan and/or the US and the rest from Thailand and/or Vietnam.

Jimenez said the grain authority?s bids and awards committee was weighing its options as it compares the Dec. 1 bids with the prevailing world market prices.

He said the NFA had the option not to award any contract if it found the offers unreasonable. However, it also has to consider that prices might increase further by the time the auctions slated for Dec. 8 and 15 were held.

Both government and private sources said that further spike in prices was likely.

Estoperez said the change in the budget was within the provisions of the Procurement Law or Republic Act 9184.

Under the law, the NFA bids and awards committee may amend its terms within seven days of an auction?s pre-bidding conference.

The pre-bidding conference for the Dec. 15 tender was held on Dec. 2.

The NFA, however, can no longer amend the budget for the Dec. 8 tender, thus it will remain at P15.26 billion.

By the time the Dec. 15 tender is awarded, the Philippines will have procured from abroad 2.05 million tons of white rice for 2010 supply.

In 2008, the country imported 2.3 million MT of rice, when prices peaked at $1,080 per ton.

The rice market has been anticipating an increase in Philippine rice importation to 3 million MT in 2010 due to damages caused by the typhoons on farms.

Typhoons Ondoy and Pepeng, which struck in September and October, resulted in palay losses of 1.3 million tons, which translate to 845,000 tons of white rice.