Private sector-led rice importation pushed

Dominguez proposal

Finance Secretary Carlos G. Dominguez III wants to remove some functions of the National Food Authority (NFA) in regulating the supply of rice and allow a private sector-led importation of the Filipino stable food to stabilize its skyrocketing prices.

Dominguez said that the current rice importation system being implemented by the NFA is inefficient as it discourages legitimate businesses that have the capability to store and distribute rice to easily buy from abroad.

The culprit for the current high cost of rice, Dominguez believes is the sole authority given to the cash-strapped grains agency to choose who is allowed and not allowed to import rice.

Under the government’s commitment to the Word Trade Organization, the Philippines should allow the entry of at least 805,000 metric tons of rice at a tariff rate of 35 percent. Anything above the minimum access volume (MAV) is charged 40 percent.

“I’m really wondering, how come the companies that have warehouses and distribution networks, for instance the

flour milling companies, why they’re not importing rice? Because it’s too troublesome to import rice, you have to go there [NFA] to file application and all these things,” Dominguez said.

“They don’t bother to do it [the application process] and besides they are not ‘allocated’ [by the NFA],” the finance chief added.

Instead of stabilizing the prices of rice in the local market, Dominguez said that

NFA’s present licensing system is “choking” legitimate importers that resulted in skyrocketing retail costs particularly during the lean months for palay.

Dominguez suggested that the government’s regime being imposed on fuel imports should also be adopted in rice.

“The system we have now in fuel is very efficient, anybody can import fuel as long as you pay the tax. You don’t have to apply to anybody to get a permit,” Dominguez said. “Can you imagine if you started allocating the importation of fuel? Okay to import fuel you have to meet all these standards before I give you a permit to do it.”

Once the private sector is openly allowed to import rice, Dominguez said that “companies that are in retail business will be encouraged to do that, as you do that the tendency of the price is to go down because there will be sufficient supply.”

“If you want to import 1,000 rice, you go ahead and import it, that’s all we want and let anybody import. I’m telling you, the government is not very good at predicting the market, it’s terrible at that! So why do you allow the businessmen to do it on a daily basis?” Dominguez said.

The finance chief, meanwhile, warned the private sector that if “you want to import

you [and] make money, good, [but if] you loss money, tough luck.”

Meanwhile, an additional importation of 250,000 tons of rice via an open tender, has been approved by the NFA, as the government rushes to boost domestic supply and curb rising retail prices of the staple grain.

The decision comes as the country’s annual inflation shot up to a faster-thanexpected 6.4 percent in August, the highest in nearly a decade, due in part to price increases of key food items including rice.

Additional rice demand from the Philippines could give a boost to export prices of its key suppliers, Vietnam and Thailand, where traders have been waiting for new deals with one of their biggest customers.

The Philippines’ additional purchases, which should arrive in November, are on top of the 133,500 tons to be delivered between Sept. 15 and Nov. 30 to beef up thin supply in the southern provinces, the National Food Authority (NFA) said.

Separately, the National Economic and Development Authority said in a statement that 5 million sacks of imported rice would arrive over the next 1-1/2 months and another 5 million sacks would be imported early next year.