MANILA, Philippines - The Department of Finance (DOF) is allotting P32 billion for the National Food Authority’s rice importations this year using the Tax Expenditure Fund (TEF), Finance Undersecretary Jeremias Paul said.
Paul said yesterday the P32 billion is the initial allocation made by the DOF.
However, the DOF is in the process of reviewing the amount following changes in the figures submitted by the NFA regarding its planned importations this year.
The NFA had previously said it was eyeing only 1.5 million metric tons of rice imports this year.
However, the NFA recently opened a new window allowing the private sector to import up to 300,000 metric tons of rice through the NFA utilizing the TEF.
The TEF is a subsidy released by the Department of Budget and Management (DBM) to government-owned and controlled corporations and state-run companies mainly to settle customs duties and other taxes arising from the importation of goods.
Last year, the NFA utilized P39 billion TEF for its increased rice importations as a result of the global rice crisis.
Paul was surprised by the NFA action allowing the private sector to import an additional 300,000 MT of rice this year utilizing the TEF.
“We were not informed about that. That’s why we have to meet with them to reconcile our numbers,” Paul said.
He said the DOF, likewise, has to verify with the NFA its projections for palay purchases this year.
NFA administrator Jessup Navarro has said that the NFA would purchase 3.21 million bags of palay this summer.
Navarro said the NFA is targeting to buy 939,200 bags of palay in March, 1.1 million bags during the peak of harvest in April and 889,800 bags in May.
Another 232,300 bags of palay are expected to be bought in June from an extended summer harvest in some regions.
Navarro said that farmers find it more profitable to sell their palay to the NFA.
Aside from the support price of P17 per kilogram, the NFA has increased the additional incentives for cooperative development to P0.30 per kg while the drying and transport incentives are now at P0.20 each per kg.
“This translate to P17.70 per kg the effective price of NFA for clean and dry palay,” Navarro said.
In January, the NFA bought 798,519 bags of palay or more than 100 percent of the month’s 796,900 bags target.
The NFA sets this year’s palay procurement target at 14 million bags, approximating last year’s 13.2 million bags procurement.