The National Food Authority’s (NFA) debt is seen to balloon by about P49 billion to P185.9 billion as it plans to increase its rice imports for this year until the next to support the country’s rice requirement.
Based on NFA’s computation, the importation of about 250,000 metric tons (MT) of rice could cost the government P7 billion. With the NFA Council’s approval to import 750,000 MT of rice this year and its standby approval to import an additional million ton in 2019, the grains agency would need to borrow about P49 billion from the Bureau of the Treasury.
This would put the agency’s total debt to the national government at about P185.9 billion.
The agency’s decision came after Typhoon “Ompong” left some 517,175 hectares of rice farms destroyed, leaving in its trail production losses of about 750,000 MT of rice.
After Agriculture Secretary Emmanuel Piñol’s first meeting with the agency as the head of the NFA Council on Monday, additional imports were approved to ensure there would be enough rice supply despite the calamity.
As of Wednesday, NFA’s pending loans stood at P136.9 billion—the bulk of which was incurred during the time of the Arroyo administration. During that time, in an effort to satisfy both farmers and consumers, the agency subsidized both the farm-gate and the market price of rice, which proved to be unsustainable.
Asked whether the NFA has the ability to pay off its loans, spokesperson Rex Estoperez said the agency has always been able to pay the Treasury through the proceeds it gets from selling NFA rice variants in the market. These variants are sold at a constant P27 and P32 a kilogram, depending on the quality.
Just a few weeks ago, an agricultural group filed a graft complaint against former NFA Administrator Jason Aquino for allegedly diverting a portion of the agency’s funds to pay off its maturing loans instead of using the money to stabilize the supply and prices of grains.
For the first semester of 2018, NFA received the largest subsidy from the government’s coffers at P5.2 billion, higher than the subsidy received by the National Irrigation Administration at P2.996 billion.