RP abandons rice self-sufficiency goal

MANILA, Philippines - The country has abandoned its goal of being fully self-sufficient in rice by the end of the decade, realizing that it has to pump more capital to improve irrigation facilities and farm-to-market roads. Augusto B. Santos, acting National Economic and Development Authority (NEDA) director general, said the government would be spending some P52-55 billion until 2013 to boost rice production, such that the Philippines would no longer have to import. "We wanted to attain 100% rice self-sufficiency by 2010 pero mukhang hindi na kaya (but it appears to be no longer doable) so we pushed it back to 2013," Mr. Santos told a press briefing Wednesday. "The government has to make a lot of public investments particularly in irrigation and farm-to-market roads, which are capital-intensive," he added. Despite its being an agricultural country, the Philippines continues to depend on imports to meet the demand for rice. The country is the world’s biggest rice importer this year after it contracted some 2.3 million tons to offset a domestic shortfall. Imported rice accounts for 10-15% of the country’s rice supply, while the rest comes from local production. Mr. Santos said the funds would be sourced from state coffers, following the government’s decision to forego a balanced budget goal this year as it spends more to spur growth and help the poor cope with rising food and fuel prices. The fiscal gap is expected to reach as much as P75 billion this year, or 1% of gross domestic product (GDP). The shortfall should be trimmed to P40 billion in 2009 and to zero by 2010, as originally planned. Mr. Santos said the government could also tap multilateral donors such as the World Bank and the Asian Development Bank, which both earlier announced increased support for nations battling the global food crisis. "It (funds for rice production) will be part of [programmed] deficit spending. If the government lacks revenues, we will have to borrow in order to attain this rice sufficiency," he said. The NEDA chief downplayed criticisms of the government’s rice subsidy program, pointing out that the spending paled in comparison with its Asian neighbors. "Malaysia spends more on food subsidy programs, about 1.5% to 2% of GDP. We don’t even reach 1% of that," Mr. Santos said. The government, however, has no plans of further subsidies to mitigate the impact of rising food and energy prices on the poor, he said. Subsidies announced by the Arroyo administration in the wake of the energy and food crisis include the continuation of a discounted rice program for the poor, a one-time P500 handout for each lifeline power user, and an expansion of diesel discounts for the transport sector. "The plan is to tighten the implementation, avoid leakages and see to it that the intended support goes to beneficiaries," Mr. Santos said.