Press Release
February 14, 2011

NFA urged to knock on 'budget door', instead of borrowing P6.5B
for rice procurement

The National Food Authority (NFA) could avoid incurring new debts by just tapping existing funds in the national budget for its rice-procurement program valued at P6.5 billion, Sen. Ralph G. Recto said today.

Recto said the national government could apply some sort of benevolent "conversion" by re-aligning funds in the 2011 budget and channel it to NFA's rice procurement "mission."

"The NFA has P171 billion in debts already -- padding it by billions more is not an example of fiscal responsibility that is being trumpeted by the Aquino government," Recto, Senate ways and means chair, said.

He said allowing NFA to use borrowed funds to buy rice from farmers would only mean additional burden to taxpayers, which also include farmers, who will eventually shoulder the new debt. "Who will shoulder the fresh borrowing of NFA? It is us, the taxpayers. The NFA is already swimming in debt, are we going to allow them to increase it some more?" Recto said.

He said the NFA will end the year with a total spending bill of P9 billion since it has already an appropriation of P2.5 billion under the budget.

He also said the national government could 'return to sender' the P2.5 billion rice subsidy allotment that it shaved from NFA budget in favor of the conditional cash transfer of DSWD and make it as initial seed money for the rice buying program.

The senator said the rest of the balance could be sourced from existing appropriations through "prudent and conservative" re-alignments under the watchful eye of the Department of Budget and Management (DBM).

"We are not tying its hands, we want NFA to succeed in its mandate. Our best suggestion is to refrain from incurring new debts by knocking on the budget door of the national government, which may have some extra cash to spare," Recto, who is also vice-chair of the Senate finance committee, said.

The NFA announced over the weekend that it was ready to borrow P6.5 billion to buy 870,000 of unmilled rice from farmers at the subsidized price of P17 per kilo.

The NFA said the funds would be sourced through commercial loans or borrowing.

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