Philippine food authority to borrow $180m for rice imports
The National Food Authority (NFA) of the Philippines will borrow another 8 billion pesos (US$180.07 million) to meet its expenditure requirements this year, particularly for more rice importation and payment of maturing obligations, Finance Undersecretary Jeremias Paul Jr said.
The NFA will use credit lines with banks to raise the 8 billion pesos, which will be on top of 8 billion pesos it raised in February from a sale of long-term bonds that carried a sovereign guarantee, Paul said.
Paul said the NFA's financial woes were a natural consequence of its mandate to ensure a steady supply of affordable riceselling rice at lower-than-market prices even if it buys it at high prices.
He said the NFA posted a budget deficit of 2.6 billion pesos ($58.52 million) last year. The deficit is expected to widen this year, given rising prices of rice in the world market.
Earlier projections showed the NFA deficit could reach 43 billion pesos ($968.35 million) this year, but Paul said the latest estimates indicated it would be 35.8 billion pesos ($806.21 million), given the measures the NFA has taken to address its financial problems.
To cover its deficit, the NFA's debts have ballooned to about 36 billion pesos.
One of the measures taken by the NFA to address its financial woes is introduction of rice varieties that it sells at higher than the support price of 18.00 pesos (40 US cents) per kilo.