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Wednesday, May 07, 2008
Arroyo cancels rice procurement through bidding
MANILA -- President Gloria Macapagal-Arroyo on Tuesday canceled procurement of rice through bidding and decided to go for a government-to-government deal after Monday's auction to secure rice supplies failed.
President Arroyo decided to settle for the new scheme to maintain government's 30-day buffer stock until the end of the year. She announced her decision during an informal media interview in Camarines Sur.
Arroyo Watch: Sun.Star blog on President Arroyo
Agriculture Secretary Arthur Yap confirmed the new policy, saying "I think the important thing to note is we will enter the July 1 lean months with more than 30 days buffer stock. That's the most important thing that we've managed to contract, the 10 percent gap. So whatever we're going to be buying in the coming months, we have flexibilities and it is to maintain the buffer stocks up to December, because that July 1 stock will be depleted if we don't add to it."
The agriculture chief said the options that can be considered under the Government Procurement Act (Republic Act 9184) are government-to-government contract or an executive agreement and a negotiated contract in case of a failed bidding.
The National Food Authority (NFA), the state-run grain importer, declared Monday a failure to secure supplies of rice after only one company -- Vietnam Southern Food Corp. -- submitted a bid, which even did not comply with the required documents.
In an interview, the agriculture secretary said the private sector could also import and the National Food Authority (NFA) could buy rice locally, adding that he has ordered the NFA to buy the last remaining harvest for the summer crop.
He said he has invited wholesalers and traders to join the May 9 private sector tenders for 163,000 metric tons (MTs) of rice.
The government can buy from local farmers and can do the government-to-government deal to buy 400,000 MTs to maintain the 30-day buffer stock throughout the year, Yap added.
"At this time when we see that the world is going through these very constricted supply phase, we just want to be sure," he said, adding that government raised its buffer stock level from 15 to 30 days.
According to Yap, the government-to-government deals can help ease world prices because public tenders, such as what the Philippines has been conducting, drives up prices as the winner turns to other suppliers.
"We have reason to believe that when transactions are made at least outside the glare of big public tenders, there is ever reason to believe that prices can be negotiated lower than international benchmark prices," he said.
He added that the country is pushing for government-to-government guarantee now to safeguard the procurement's transparency and "because we want to ensure that the Philippines gets better offers."
Asked on the country's position on the proposed creation of the Organization of Rice-Exporting Countries (Orec), Yap said what is important now is to support greater trade flows into the world market "because when trade flows are being controlled, that's when speculation comes in and prices get affected."
He said the five countries advocating its creation should be given the benefit of the doubt, adding that the Philippines is not worried about it because it has secured its supply.
President Arroyo, during her opening statement in Tuesday's Cabinet meeting, meantime said the government would intensify its campaign against price gouging and the diversion of cheap rice to commercial rice.
In Camarines Sur on Tuesday morning, the President also announced the earmarking of P15 million for the construction of additional irrigation canals in Albay to boost food production in the province.
She said special attention should be given to government farm-to-market road projects, as well as the planned P200-million construction of two dams in Albay Province to increase rice production. (AP/JMR/Sunnex)
For more Philippine news, visit Sun.Star Pangasinan. (May 7, 2008 issue)
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