Abusive agencies face ax

Many obsolete GOCCs, GFIs on chopping block

The government is looking at abolishing government-owned and controlled corporations (GOCCs) and Government Financial Institutions (GFIs) that are not only obsolete but are also incurring ballooning liabilities.

Finance Secretary Cesar Purisima on Tuesday said that GOCCs, if not managed well, pose a threat to the country’s fiscal position.

“It is important that they are proactively managed as well,” Purisima added.

He said that under the administration of President Benigno Aquino 3rd, the Department of Finance would push for stronger oversight functions over GOCCs and GFIs.

Special attention, Purisima added, would be given to those that posted swelling liabilities in the past years such as the National Food Authority (NFA), Light Rail Transit Authority and National Irrigation Administration.

“We asked the Commission on Audit to set the right cut-off as to when the Aquino administration [would start] taking over these GOCCs and GFIs,” he said.

The Finance secretary added that NFA, among others, had become heavily indebted by P171 billion as of May this year.

“Thus, we are in talks with NFA and DA [Department of Agriculture] officials to limit its [NFA’s] powers to regulatory and warehousing and would instead course through its subsidy functions to the Department of Social Welfare and Development [DSWD],” Purisima said.

He added that once the government was done with the assessment of the performance of each problematic GOCC and GFI, it would recommend either abolition or privatization of NFA.

“So far, we cannot do that yet since we have to observe the transition period, which would be in the next six months. Hence, all [other GOCCs and GFIs would not be touched] except NFA,” Purisima said.

He added that if the NFA and Agriculture officials would come to agree to removing the NFA’s subsidy functions, the officials need not seek legislative enactment to seal that agreement because such functions would only be budgetary in nature.

“We can withhold [NFA’s] subsidy fund and course it through the DSWD and convert it to conditional cash transfer, which is more effective in delivering this relief to disadvantaged Filipinos than subsidizing the price of rice for everyone,” Purisima said.

The embattled NFA’s administrator, Angelito Banayo, also on Tuesday announced that he would create an audit team to investigate the agency’s operations, particularly those involving rice importations.

The announcement came a day after President Aquino in his first State of the Nation Address (SONA) exposed the previous administration’s allegedly bloated importations.

Audit team

During a press briefing at Malacañang, Banayo said that the audit team would look into the allegations raised by the President in his SONA on supposed anomalies in NFA.

These anomalies included allegedly excessive rice importations and overstocked warehouses, heavy indebtedness, rice wastage and failure to help farmers.

Banayo said that he has requested the assistance of the Department of Justice and the National Bureau of Investigation to be part of the team that will conduct the systems and management audit of the agency.

The NFA’s audit team, he added, would be headed by Jesus Posadas, a commodities expert and former executive of San Miguel Corp.

“He [Posadas] is doing this on a voluntary basis, aware [as he is] of the problems that beset the National Food Authority and its impact on our food supply and our food distribution systems,” Banayo said.

He added that the government has asked Vietnamese trader Vina Foods Corp. to stop shipments of 200,000 metric tons of rice until September because NFA warehouses are now full.

Banayo said that he suspects that some of the 740 warehouses in the country still have the rice stocks shipped in 2008.

According to the NFA chief, the government was forced to sell the old stocks at a loss because rice has a shelf life of only six months to a year.

Banayo said that the government would import less rice for 2011, adding that they have yet to determine the volume.

President Aquino, in his Sona, revealed that the Arroyo administration allegedly overimported rice, causing the NFA’s debts to swell to P177 billion as of June 30 of this year.

He also exposed that in 2007, the country was short of an estimated 589,000 metric tons of rice.

But, the President said, the Arroyo administration bought 1.827 million metric tons to address that shortage.

Former Agriculture Secretary Arthur Yap has contradicted Mr. Aquino’s information, saying that he may have been given wrong statistics by current leaders of the Agriculture department and the NFA.

Yap said that the actual estimated rice shortage was 1.8 million metric tons, the reason why the government bought that volume.

Banayo, however, said that the President’s figures came from the Bureau of Agriculture Statistics, which is under the Agriculture department. –KATRINA MENNEN A. VALDEZ AND CRIS G. ODRONIA REPORTERS, Manila Times