State-run National Food Authority (NFA) is set conduct in the first week of July the bidding for 250,000 metric tons of rice supposedly to beef up government buffer stocks during the lean months.
NFA spokesperson Marietta Ablaza said that the grains agency hopes to publish the invitation to bid on Friday for them to conduct the tender “as soon as possible,” noting that it would take 28 days to complete the entire bidding process alone.
“The [NFA] Council has already approved the TOR [terms of reference]for the bidding. We are just waiting for their resolution approving the TOR,” Ablaza said in a text message.
“Most likely if we can publish immediately or Friday, bidding will be conducted July 3,” she added.
Following delays due to internal politics and shady backdoor negotiations, Manila is now scrambling to fill up its buffer stock requirement of the grains with the lean months just around the corner.
The NFA earlier said that stocks at government-owned warehouses are expected to hit critical levels, with two days worth of supply left by end of June. This is well below the its mandated buffer stock requirement.
Traditionally, lean season in the Philippines starts in July and ends in September. It is also the time when the government imports rice that would help stabilize the staple’s prices in retail markets.
The state-run grains agency is required by law to have at least 15-day buffer stock at any given time, and 30-day buffer stock during lean months.
On Tuesday, the interagency NFA Council ordered the NFA to scrap the traditional government-to-government (G2G) scheme and shift to government-to-private (G2P) or an open tender scheme for a more transparent bidding process.
The council noted that previous G2G schemes were exempted from the Procurement Law, hence the NFA was free to make its own guidelines and implement the same.
“Such acts that are all below the radar of government rules and procedures. Thus, in effect the G2G scheme is tantamount to ‘self-regulation’ which, as we all know, does not work well when an agency is required to perform both regulatory and proprietary functions such as the NFA,” Cabinet Secretary Leoncio Evasco said.
Evasco, who is the chairman of the NFA Council, said that combining both functions makes the entire process prone to conflict of interest.
He also said that delivery period of the G2P importation shall be in tranches, from July 31 until the last week of September.
To date, only Hanoi has the capability to supply Manila with rice since other major rice producing countries have no newly-harvested rice, which is one of the requirements under the terms of reference of the open tender.
However, allowing staggered delivery of the rice stocks would allow other countries and private traders to join the bidding, making it more competitive.
Meanwhile, Ablaza said the NFA has yet to open application for the private sector-led importation under the so-called minimum access volume (MAV), saying that they are currently focused on filling up government coffers to a more comfortable level.
The 250,000 MT of rice to be imported by the government is expected to add another eight days to government stocks; while MAV imports, which totaled 805,000 MT, translates to about 26 days.
The NFA Council, however, clarified there is no immediate need for bulk importation for both NFA and the private sector, saying that total rice stocks in the country are still at comfortable levels with 44 days for household stocks and 28 days for commercial stocks.
A staggered arrival for rice imported for both government and private sector would ensure that there will be no oversupply of the grains come harvest season starting September, the council said.