Philippine Gov’t may skip rice deal with Cambodia

May 17, 2012
Bettina Faye V. Roc
Business World (The Philippines)

THE PHILIPPINES may forego a rice supply deal with Cambodia for this year if it is not signed next week, to allow the government to finalize all state-to-state deals for imports of the grain.

"We can let go of the Cambodia deal because we have to move. We can include them in our options next year, if ever," Agriculture Secretary Proceso J. Alcala said in an interview yesterday.

According to the Cabinet official, the department is only waiting to be granted the authority by Malacañang to be able to sign rice supply agreements.

"We hope Malacañang can give us authority within this week so we can finalize the deal and include Cambodia in our options for the government-to-government deals," the Cabinet official said.

The Department of Agriculture (DA), through the National Food Authority (NFA), imports rice to ensure sufficient supply of the staple, especially for the lean months of July to September.

For this year, the country is importing a total of 500,000 metric tons (MT) of rice.

Last March, the NFA bid out to the private sector the rights to import 380,000 MT of this volume duty-free through the agency’s tax expenditure subsidy.

The remaining 120,000 MT will be procured by the NFA through government-to-government deals with the countries that the Philippines has existing rice supply agreements with -- Thailand and Vietnam.

"If our agreement with Cambodia can be signed by this week so that the NFA can coordinate with them as well for the deals, then good. But if not, it will not be our priority. We have to proceed with the importation," said Mr. Alcala.

He also noted that the NFA is set to have a council meeting next week, wherein the state-to-state deals for rice imports will be discussed.

"After the May 21 meeting, we can proceed with the invitations," NFA Administrator Angelito T. Banayo said in a text message yesterday.

Mr. Banayo had said that finalizing the state-to-state deals within this month was an "urgent" concern because exporting countries need ample time to meet the Philippines’ rice import requirement by the end of June, which is the NFA’s deadline for the entry of shipments of the staple.

In 2011, the Philippines imported 860,000 MT of the grain. Traders and farmers’ groups from the private sector procured 660,000 MT of this total volume while the remaining 200,000 MT was shouldered by the NFA.