The government has yet to decide on how the National Food Authority (NFA) will pay its billions of pesos in debts following its restructuring in line with the new rice law.
Under the Rice Import Liberalization Law, the grains agency would no longer be allowed to sell rice in the market and would be focused on maintaining the country’s rice reserve, thereby removing its revenue streams.
Financial records from the agency showed that since its creation in the 1970s until 1998, its debt was P5.7 billion.
However, from 2001 to 2010, its debt swelled to P165.6 billion following the Arroyo administration’s “buy high, sell low” policy, wherein the NFA must buy palay from farmers at a high price and sell rice to consumers at a low price to keep both producers and consumers happy.
As of last year, NFA’s debts stood at P144 billion.
Former NFA Administrator Jason Aquino said “the implementation of food programs which were not sustainable” was to be blamed for the accumulation of these debts.
In an interview, Socioeconomic Planning Undersecretary Rosemarie Edillon said the issue was still being discussed but added that the NFA would definitely pay its debts.
The matter will be taken up by the Department of Budget and Management’s Development Budget Coordination Committee. Its members include the National Economic and Development Authority, the Department of Finance, Bangko Sentral ng Pilipinas and the Office of the President.
Finance Assistant Secretary Tony Lambino said one of the solutions they were looking at was the sale of NFA’s assets that would no longer be needed under its buffer stocking role.
A document obtained by the Inquirer showed that the agency had 441 lots, 283 of which had clean titles, 28 with missing titles but were named under the NFA, and 130 with ownership issues.
While no valuation has been given by the agency, an official privy to the matter said NFA’s assets would amount to “billions of pesos,” citing two properties valued at a billion each.
It’s unclear, however, whether all these properties would be sold and would be enough to cover the agency’s liabilities.
In a separate interview, monetary board member Bruce Tolentino said that if the agency would not have enough assets to cover its debts, the government would not have any choice but to give assistance and “absorb the debt.”