Beneficial

MANILA, Philippines - Regarding your story titled “Senators monitor rice importation” (Philippine STAR, 10/11/09), allow us to point out that the Arroyo administration’s sustained, higher farm spending and its aggressive procurement and distribution strategy have spelled stable supply of rice for the rest of the year despite the onslaught of typhoons “Ondoy” and “Pepeng,” according to officials of the Department of Agriculture (DA).

However, the devastation wrought by both typhoons on Philippine agriculture and fisheries will most likely lead to a supply deficit in 2010, prompting President Arroyo to order rice imports as a way to stabilize supply in 2010, especially during the year’s first semester.

Nothing is final yet on the volume or mode of procurement for the planned rice imports as the Inter-Agency Committee (IAC) still has to meet and decide on this matter. IAC is the Cabinet-level panel that sets the volume of rice that can be imported each year by the DA-attached National Food Authority (NFA) and the private sector.

We assure our lawmakers and the public that the government’s import transactions are always aboveboard, as these are scrutinized by the private-sector Private Sector Procurement Transparency Group. PSPTG is headed by lawyer Paterno Menzon who represents the Bishops-Businessmen’s Conference (BBC) in this panel.

The other government agencies involved in the negotiation were the Departments of Trade and Industry (DTI) and of Finance (DOF).

In fact, the PSPTG was actively involved in the government-to-government negotiations for last year’s importation of rice from Vietnam.

The prevailing rate in December 2008, when the transaction was finalized, ranged from $456 to $459 per ton Freight On Board (FOB), which was nowhere near the $380 per MT cost mentioned by critics in erroneously claiming that the deal was overpriced.

Based on the said December rates, the Philippine government obtained a good deal at that time because the actual import price agreed upon by Manila and Hanoi was $549.50 — including the add-on expenses like freight costs, bid and performance bonds, surveyor’s fees, and the cost of money, arising from the Philippine government’s payment of the imports, not in cash, but on a deferred, credit basis of six months.

Against the $555.80 projected price year, the NFA was able to successfully negotiate a reduced contract price of $549.50 per MT from Vietnam’s sealed offer of $554 per MT, which proved that the transaction was a “good deal” considering the volume of imports involved, which was 1.5 million MT.

The transaction actually saved soma P369 million ($7.54 million) for the government based on the prevailing February 2009 prices of the grain as posted by the Board of Trade of Thailand, which is the industry reference for the world market price.

Clear proof that the imports had proven beneficial for Filipino consumers was that the supply of rice remained stable at affordable prices during the traditional July-September lean months and even this month despite the onslaught of typhoons “Ondoy” and “Pepeng.” — Atty. BERNIE FONDE-VILLA, Undersecretary, Chief of Staff, Department of Agriculture