NFA debts double to P108B in ’08 due to rice imports

By Ruben Hortelano

12/22/2008

The state grain importing agency National Food Authority (NFA) is expected to end the year with a bigger mountain of debts estimated at P108 billion or more than double the P53 billion obligations it incurred in 2007.

Finance Secretary Margarito Teves blamed the piling up of NFA’s debts to the agency’s importation of expensive rice early this year which was meant to stabilize the price of rice.

Teves, however, said the mounting debts of the grains agency could not be helped as some 10 percent of the country’s total rice requirement early this year had to be imported to meet local demand and to keep prices stable.

Finance Undersecretary Jeremias Paul also said the tax and operational subsidies of the NFA is expected to reach P41 billion this year but should moderate to around P38 billion by next year.

Of the P41 billion subsidies, around P2.1 billion went to the tax expenditure fund or TEF, a fund administered by the Department of Finance to cover rice import duties.

Paul said government will not hesitate to import the cereal required should this be dictated by events.

“But importation will be a last resort,” he stressed.

The tax and operational subsidies to the NFA this year was also seen to end the year at around P41 billion.

It will moderate to only around P38 billion next year as the rice sub sector was seen able to provide consumers with better output than it does at present, according to Paul.

He noted the NFA was prepared to import as much as 1.5 million metric tons of rice this year but was able to import only around 400,000 metric tons “due to better than expected rice harvests during the year.”

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