COA flags NFA for P7B loan repayments instead of food stocks
Credit to Author: racosta| Date: Fri, 09 Aug 2019 21:25:40 +0000
The National Food Authority (NFA) spent P7 billion in government subsidy to pay for maturing loans instead of implementing the agency’s Food Security Program (FSP), which was its intended purpose.
In its annual audit report, the Commission on Audit (COA) said the FSP was designed to provide the agency with, among other things, rice buffer stock, and to implement the farmer assistance program by buying palay from farmers.
According to the COA, the national government, through the General Appropriations Act, or the national budget for fiscal year 2018, allocated P7 billion to the NFA for the implementation of the FSP of the agency through buffer stocking.
But instead of using the funds for the intended purpose, the NFA opted to use the money to pay for its already maturing loans, which in turn affected the buffer stock of rice.
Based on the NFA’s own strategic objectives, the agency should maintain a 15-day strategic rice reserve (SRR) and a 30-day government rice buffer stock (GRBS).
But in 2018, the COA found that the NFA only had one-half day SRR and three days GRBS.
The NFA likewise has set targets to buy 388,889 metric tons of palay from individual farmers as well as farmers’ organizations.
But the COA said the NFA only bought 61,784 MT, or a mere 15.89 percent of the target amount.
Because the NFA did not use the national government subsidy for its indeed use, it had to spend P6.3 billion in loans to import rice in 2018, or P403.872 million more than the previous year, the audit body said.
In its response to the COA, the NFA said it used the amount to pay for loans since it felt that it was “more prudent” to pay back the loans to save on interest and tax expenses totaling P24.453 million.