PITC asked to abandon planned G2G importation of 300,000 MT of rice

By Madelaine B. Miraflor, Manila Bulletin, 17 Jun 2020

As it faces financial and legal issues for the overseas purchase of 300,000 metric tons (MT) of rice, the Philippine International Trading Corporation (PITC) was told to just abandon the controversial government-to-government (G2G) importation plan.

In a statement, the Federation of Free Farmers (FFF) advised the PITC and the Department of Agriculture (DA), the government agency that proposed the said importation, to not pursue such a plan even if the former already conducted the bidding.

Right now, the PITC is having a hard time withdrawing from the Department of Budget and Management (DBM) the P7.45 billion that is needed to bankroll the importation. As a result, the PITC decided to withhold the award of winning bids.

The DBM said it still needs a formal instruction from President Rodrigo Duterte himself before it can release the funds.

To recall, FFF already questioned before the legality of PITC’s planned importation, citing the Rule 6.4 of the Implementing Rules and Regulations (IRR) of the Rice Tariffication Law (RTL).

Such section indicates that for PITC to be able to proceed with the rice importation, there should be an official pronouncement of a rice shortage in the country as well as formal authorization of the President allowing Department of Trade and Industry (DTI) and PITC to move forward with such a plan.

“In the event of rice supply shortage, the President may direct the Secretary of Trade and Industry and the Philippine International Trading Corporation (PITC) to expeditiously participate in the rice industry thru contracts with private traders that would purchase the needed rice supplies from domestic and foreign sources to enhance market competition and stabilize rice prices,” the IRR states.

On Tuesday, FFF National Manager Raul Montemayor supported DBM’s position not to release the funds to PITC.

“Secretary Dar has insisted time and again that we have enough rice. Therefore, there is no rice shortage and there is no reason why PITC should import rice. That is the law and Secretary Dar, who has repeatedly referred to the RTL as ‘a good law’, should be the first to follow it,” he said.

Montemayor also said that the real reason behind the DA’s push for PITC imports may be the depletion of National Food Authority’s (NFA) stocks that were released for relief operations during the COVID-19 lockdown.

Three weeks ago, although the government has assured that there will be no rice shortage, the NFA has decided to “rationalize” its buffer stock and has told the local government units (LGUs) and Department of Social Welfare and Development (DSWD) to directly buy from farmers for their COVID-19 relief efforts.

“We have to move our inventories from surplus to deficit areas while the current good weather still allows us to transfer stocks between regions and ship to island provinces that are vulnerable to isolation during the rainy season,” NFA Administrator Judy Carol Dansal said.

She then said that LGUs and DSWD may source their rice requirements for relief operations directly from farmers, farmer cooperatives, or commercial rice traders.

Under a liberalized regime, NFA’s sole mandate has been reduced to buffer stocking for calamities and emergencies.

To perform this task, the agency buys locally produced palay from farmers, which it sells to LGUS and partner agencies like the DSWD.

NFA, which has an annual budget of P7 billion for palay procurement, has so far issued a total of 4.89 million bags of rice to LGUs, DSWD, legislators, and other relief agencies since March. This is 243 percent more than the 2.014 million bags distribution target for the period.

“The DA, which oversees NFA operations, should have properly calibrated the releases of buffer stocks in accordance with the law, knowing that unforeseen calamities can suddenly arise and that it cannot replenish inventories when the harvest season ends. It also appears that the DA did not do enough to comply with its mandate under the law to maintain buffer stocks equivalent to at least 15 days consumption. Maybe it was why they have been relying on the PITC imports all along,” Montemayor further said.