Agencies blamed for ‘underused’ SIDA fund

By Eireene Jairee Gomez, Manila Times, 24 Jan 2020

THE three-year underutilization of a P2-billion fund under the Sugar Industry Development Act (SIDA), meant to primarily increase the competitiveness of Filipino sugarcane farmers and agrarian reform beneficiaries (ARBs), was mainly caused by the repeated delays and failures of partner-agencies involved in the law’s implementation, according to Sugar Regulatory Administration (SRA) chief Hermenegildo Serafica.

During a House of Representatives Committee on Agriculture and Food hearing on Tuesday, Serafica, who was appointed as SRA administrator in September 2017, presented updates on the implementation of Republic Act 10659 or SIDA, enacted in 2015.

He pinned on the issues faced by the SRA for the past years, particularly the problems among concerned agencies namely Philippine International Trading Corp. (PITC) and Land Bank of the Philippines (LandBank), which are in charge of SIDA’s shared facilities program and credit component, respectively.

Under the law, P1 billion of the P2-billion annual fund of SIDA should go to infrastructure for farm-to-mill roads; P300 million for credit; P300 million for block farming of land reform beneficiaries; P300 million for shared facilities program; and P100 million for scholarships.

Upon his appointment as SRA chief, Serafica said his first priority was to fast-track the procurement of machineries to improve local production of sugarcane. The involvement of PITC on the procurement of various machineries under SIDA began in August 2018, as suggested and decided by the Sugar Board of SRA, he said.

“[In] December of 2018, it was finalized and we transferred funds in January 2019 almost
P568 million worth of various machineries for our small farmers [but] as we speak only one lot was awarded and delivered to various small farmers associations in Luzon and Mindanao,” Serafica said.

“So that is one of the causes of underutilization because for as long as it is not delivered to the farmers and it is given by PITC to the SRA, that’s underutilization,” he added.

For the credit program, Serafica said the SRA initially focused on bringing down the interest rates of loans to sugar farmers, planters and workers to 2 percent from 8 percent.

“[W]e submitted to LandBank production loans in the amount of P462 million [but] as of December 31, 2019, LandBank approved P161 million and P111 million was released to various loan applicants,” he said.

“For the 2017 fund of the socialized credit, it is still with SRA and that’s P300 million. We cannot released it to LandBank simply because they have not fully liquidated the P324 million. So again this is part of where underutilization is coming from,” Serafica added.

The SRA chief, meanwhile, stressed that SIDA’s infrastructure component, which is being implemented by the Department of Public Works and Highways (DWPH), was “one of the best performing” component of SIDA.

To address these issues, Serafica said the SRA will submit proposals of amendments on the implementing rules and regulations (IRR) of SIDA.

“The SIDA law is a good law for the sugarcane farmers. What we would like to propose
maybe is on make amendments and revisions on the IRR on the various programs,” he said.

Sharing the same stance was Abang Lingkod party-list Rep. Joseph Stephen Paduano, who said: “Actually the problem is not the law, the problem is the actual implementation of such law in which for the past four years, talking with SRA, napakaraming dapat ayusin sa IRR (there is a lot to work on in the IRR).”

For this year, SIDA’s allocation was slashed to just P500 million, a sustained decline from P1 billion in 2018, P1.5 million in 2017, and P2 billion in 2016.

RA 10659 was the first law that Sen. Cynthia Villar, chair of the Committee on Agriculture and Food, passed as a senator, which she said “is a measure meant to make sure the sugar industry will be able to compete head on against foreign players.”