Chiz sees P13-billion kickbacks in Vietnam rice deal

MANILA, Philippines - The government may have lost between P5.7 billion to P13.1 billion in kickbacks in the importation of 1.5 million tons of rice from Vietnam earlier this year, opposition Sen. Francis Escudero said yesterday.

Escudero said the alleged kickbacks are more than enough to pay for P4.5 billion in farm-to-market roads and P3.3 billion for fertilizers needed in 2009.

Escudero made the statement after Sen. Loren Legarda said she was considering investigating the Vietnam rice deal following a report from Reuters news agency that the Philippines paid 45 percent more for the rice compared to the        prevailing cash market price then.

According to Reuters, the prevailing cash price then was just $380 per metric ton as compared to the alleged agreed price of $550 per metric ton.

The Department of Agriculture, through Secretary Arthur Yap, has denied the Reuters story, citing actual quotes from Thailand which show that the price secured from Vietnam was still lower than the internationally accepted Thai rice benchmark prices.

Escudero said the government’s rice-import dependent policy would only continue to weaken the country’s agricultural sector and further entrench poverty in the countryside.

“We have become the world’s biggest rice importer. This administration appears hell-bent on keeping the title by importing a record P59-billion worth of rice this year. This nearsighted approach to food security is deplorable. If the alleged overpricing of rice imports is true, then these deals can only be described as unconscionable,” he said.

“What we must do is boost domestic rice production by giving farmers incentives. Another way to lessen dependence on imported rice is to plant other grains that we may be able to barter for rice. We just cannot continue importing rice and be at the mercy of suppliers,” he said.

The DA continued to defend the purchase of 1.5 million tons of rice, insisting that the country even saved P1.3 billion in the purchase.

Escudero also said that the report by Oxfam International that rice production in the country would fall from 70 to 50 percent by 2020 should spur the next administration to reverse this rice-import dependent policy.

“We have more than enough time to mitigate, if not prevent, this nightmare scenario from happening. We will not be able to lift most of our rural communities out of poverty if we continue to neglect agriculture,” he said.

According to the Oxfam report, rice-producing countries will be hit hard by climate change. It said that farm yields will drop by an average of 10 percent for every one-degree Celsius rise in temperature.

Rice deal aboveboard

Meanwhile, the head of the Procurement Transparency Group and co-chair of the Bishops-Businessmen’s Conference (BBC) Bids and Awards Project yesterday corroborated the DA’s claim that the Vietnam rice deal was transparent.

Paterno Menzon said the government exercised “extraordinary caution” to ensure that the rice deal was aboveboard.

BBC Bids and Awards Project is the watchdog that was actively involved in negotiations between the Philippines and Vietnam on rice imports finalized in December last year.

Menzon pointed out that the Vietnam rice deal last December was the first time that the Philippine government allowed the private sector to actively take part in negotiations for government-to- government rice importation.

Menzon acknowledged that in previous negotiations on the procurements done by the government through the National Food Authority (NFA), the private sector was merely allowed to witness the process, but did not participate in the actual negotiations.

“In fact, I suggested to Vietnam that the prices should be negotiated for every delivery but the representative of the Vietnamese government offered instead to lower the price per metric ton of their imports,” Menzon said.

He said the group even introduced additional safety measures to further ensure the transparency of the procurement process before the government can enter into any deal with another government on rice imports.

These measures, Menzon said, included the signing of a memorandum of agreement between the Philippine government, through the DA and NFA, and the exporting country as a legal requirement to set the tone and the basis that the transaction is an executive agreement.

The Department of Foreign Affairs (DFA) had certified that the deal was in the nature of an executive agreement and the Government Procurement Policy Board (GPPB) likewise confirmed the transaction, Menzon revealed.

The Department of Justice (DOJ), Menzon said, also confirmed the transaction by way of a legal opinion and the DA Secretary’s authority to negotiate was covered by the full powers and authorization from the Cabinet as approved and signed by the President.

In the case of the 1.5 million metric tons of rice imports from Vietnam, Menzon explained that new rules were even applied to guarantee the transparency of the deal, such as the requirement of an offered or bid bond equivalent to 3 percent of the cost, and a performance bond of another 3 percent.

Moreover, the interested party was also required to make a dropped bid or come up with a formal written offer instead of just verbally transmitting its offer to the government as is the norm in government-to-government transactions.

On the 1.5 million MT rice imports, the government, Menzon said, informed eight countries, namely USA, Japan, Indonesia, South Korea, Pakistan, Thailand, Vietnam and China, reiterating the Philippines’ invitation to enter a Memorandum of Agreement for the purchase of rice for 2009 deliveries.

Only Vietnam positively responded and indicated interest in supplying rice to the Philippine government, Menzon said. - With Marianne Go