Press Release
January 18, 2006

To review the agency's policies and recommend charges on erring officials

Senator Manny Villar, Chairman of the Senate Committee on Finance, says that government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs) are expected to be profitable and not incur huge losses year in year out.

Villar expressed incredulity over the huge losses of the National Food Authority (NFA) in particular. Thus, Villar filed Senate Resolution 411, directing his committee to look into NFA for possible mismanagement or inefficiencies taking place in the agency.

According to Villar, "GOCCs and GFIs like NFA should function like private companies and strive to post profits. They should contribute to the national coffers instead of being a burden to the government. The government, in turn, should not always willingly shoulder the unjustifiably huge losses being incurred by these agencies."

During the deliberation of the Senate Committee of the Whole on the budget of the NFA, Villar found out that the agency has been suffering huge losses that have reached a stupendous amount. Based on NFA's presentation, it was revealed that it incurred the following losses over the years: P4 billion in 2003, P7.6 billion in 2004, P21.2 billion in 2005 and this year, it is expected to post losses of P21.6 billion.

NFA officials attribute the losses or its poor performance to the depreciation of the peso, pricing policy constraints and high importation costs. Of the projected losses of P21 billion, P14 billion is due to importation taxes.

"Year in year out, they provide us with the same justification for the huge losses and it came to a point that it sounds like alibis for mismanagement and inefficiency," cites Villar.

Villar earlier urged for the implementation of limit or cap on the allowable losses of GOCCs and GFIs. "If they go beyond certain loss levels, then we should consider abolishing them. We should monitor them closely and reprimand or administratively charge inefficient or erring officials or managers," adds Villar.

The NFA is among the 15 GOCCs earlier reviewed by the Department of Finance (DoF) and Department of Budget Management (DBM) for their contribution to the country's fiscal crisis. NFA has also been reported to be negligent in performing its key mandates of ensuring rice market efficiency since, for one, the country has been importing more rice than exporting it.

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