SANS COMMERCIAL ROLE, NFA NARROWED LOSSES IN 2021

With its commercial functions and regulatory powers scrapped under the Rice Tariffication law, the state-run National Food Authority (NFA) slashed its net loss by almost two-fifths to P9.6 billion last year, according to the Department of Finance (DOF).

The DOF’s corporate affairs group headed by Undersecretary Antonette Tionko recently reported to Finance Secretary Carlos Dominguez III that the NFA’s net loss in 2021 narrowed by 37.8 percent from 2020’s P15.4 billion.

“This net loss does not include the NFA’s subsidy support from the national government of P30.7 billion in 2020 and P7.5 billion in 2021, representing the conversion of national government advances into subsidy,” the DOF said.

The DOF noted that the Rice Tariffication law limited the NFA’s mandate to procuring emergency rice buffer stocks from local farmers.

“The targeted use of its buffer stock as mandated by law meant lower procurement volumes, which can be funded solely out of subsidies from the national government. Thus, it no longer needed to borrow funds to augment the financial resources needed for procurement activities,” the department said.

Since the DOF and the Department of Budget and Management supported the NFA’s financial restructuring, the agency “was able to gradually reduce its outstanding borrowings and financial charges.”

“The NFA’s lower procurement volumes led to a reduction in operating costs and the organizational restructuring of the NFA, resulting in billions of pesos in savings for the government,” Finance Assistant Secretary Soledad Emilia Cruz said.