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THE
Philippines plans to shore up its rice buffer stock by
securing additional supplies without bidding but through
a government-to-government arrangement, among other
alternative modes of procurement, Agriculture Secretary
Arthur Yap said Tuesday.
Yap told
reporters before the Cabinet meeting that the government
enjoys “many flexibilities” in terms of rice
procurement, as it has already fully filled in its rice
requirements.
Republic
Act 9184, or the Government Procurement Reform Act,
provides for alternative methods of procurement that are
supposed to secure the most advantageous price for the
government—selective bidding, direct contracting, repeat
order, shopping and negotiated procurement—subject to
certain conditions.
Asked
why the government has broached the idea of a
government-to-government rice procurement, Yap cited the
need to “safeguard the transparency of the procurement;
second, we have to understand that we will go into it
only because we want to ensure that the Philippines gets
better offers.”
Officials remain confident, meanwhile, that Vietnam will
deliver on its promise to sell the
Philippines
the amount it reportedly committed in spite of its ban
on rice exports to safeguard its own food security.
Yap
confirmed Tuesday that Manila and Hanoi have an existing
agreement that practically ensures a steady source of
rice for the Philippines. “I don’t think we will be
affected by export bans imposed by
Hanoi.
Even the existing export ban imposed by
Vietnam
does not apply to the Philippines.”
Yap’s
statement appeared to be based on the memorandum of
agreement signed between the two countries on March 27.
His
assurance came as the Thai foreign minister declared
Thailand was dropping plans to create a Southeast Asian
rice cartel that would have fixed the price of the
skyrocketing commodity over food security concerns.
Instead,
Thailand proposed holding a meeting on rice in the next
month or two that would work with top Asian exporters
including India, China, Vietnam, Myanmar, Cambodia and
Pakistan to improve productivity; and discuss sharing of
technology, market information and price
information.
Yap said
the Government Procurement Policy Board will ensure that
any government-to-government procurement will be
aboveboard.
This
type of procurement, he added, may help keep down prices
because of the nature of public tenders. “In a public
tender, the winner is forced to procure as well because
a lot of the suppliers don’t really hold totally their
own stocks, they would have to turn to other suppliers.
So that drives up prices because you have no more
stocks. You know the volume to be procured, you know the
date of delivery, and you know the price so it really
ruins the trading,” he said.
He added
that “when transactions are made at least outside the
glare of big public tenders, there is every reason to
believe that prices can be negotiated lower than
international benchmark prices.”
Aside
from government-to-government procurement, the National
Food Authority will continue to buy from local rice
farmers to maintain the country’s 30-day buffer stock
throughout the tear, said
Yap.
“You can
locally procure, especially if there are still harvests.
And right now we’re about 60 percent to 70 percent, so
we still have about 30 percent to complete this May. We
can buy that. And as we are doing that we can also do
week to week, we can continue to buy from foreign
sources,” he said.
As
Thailand’s foreign minister was reported saying his
country would no longer push through with an Opec-like
rice cartel, Yap said on Tuesday the Philippines is
prepared to give the proposed rice cartel in the region
the “benefit of the doubt” until concerned countries
formally unveil their planned grouping.
Yap
issued the statement in an interview before the Cabinet
meeting even as he pushed for “greater trade flows” to
prevent speculation that drives up prices.
He noted
that the five nations pushing for Orec—Burma or Myanmar,
Cambodia, Laos,
Thailand
and Vietnam—are members of the Association of Southeast
Asian Nations (Asean), “so we have to give them the
benefit of the doubt and wait for some more formal
announcement.”
Earlier,
Hanoi said it will ban new rice-export contracts until
June to ensure food security and boost the value of its
grain. Vietnam capped its 2008 national rice exports at
3.5 million metric tons (MMT), down from the previous
target of 4.5 MMT.
But
under the MOA,
Hanoi is required to sell, unless it suffers a natural disaster or
harvest loss, up to 1.5 MMT of Vietnamese rice annually
starting this year to the
Philippines.
This
pact is subject, however, to market and production
conditions and to terms allowable under applicable laws
of the Philippines and Vietnam.
The
Vietnam Southern Food Corp. and the National Food
Authority were designated implementors of the agreement,
which is to be in effect for three years with automatic
renewal for another three years and thence continue year
to year unless terminated by either party through
diplomatic channels six months before date of
termination. (With J.A. Ng, Bloomberg) |
