Senate probe into 'irregular' sale of NFA rice sought

A Senate investigation into the National Food Administration's "irregular" sale of rice to certain traders at a lower price has been sought in the Senate.

"Now, therefore, be it resolved as it is hereby resolved, directing the appropriate Senate committee to conduct an inquiry, in aid of legislation, into the irregular disposition and sale of the National Food Authority repackaged rice stocks to certain rice traders at low prices," said Senator Imee Marcos in her proposed Senate Resolution 940 filed Monday.

Marcos cited the February 12 letter-complaint to the Office of the President filed by NFA Assistant Administrator for Operations Lemuel Pagayunan regarding the alleged irregular sale of "treated and fit for consumption" rice stocks allegedly made by NFA Administrator Roderico Bioco to two rice traders.

According to Marcos' resolution, Pagayuman indicated in his letter-complaint that Bioco issued several memoranda allowing the sale of 75,000 bags of "deteriorating or aging" NFA rice totaling P93.75 million to the traders.

In supporting this, Marcos noted Pagayunan's citing of a November 13, 2023 memorandum supposedly issued by then-Assistant Administrator for Operations John Robert Hermano that gives instructions that the stocks will be rebagged in containers without the NFA markings prior to selling them as commercial rice.

It was also alleged by Pagayuman that "while the payment for the sale was made directly in NFA Central Office, no other bidders or buyers were allowed to submit their bid price for the NFA stocks being sold. There is also no showing that the amount paid by G4 and NBK was the best price offered. In short, the buyers were pre-selected..."

Marcos also noted the NFA's side, contesting all the accusations raised by Pagayuman, stating that the involved stocks were already exhibiting deteriorating quality due to prolonged storage in the warehouses and that the choice of the two traders as buyers was made to prevent connivance between the NFA personnel and old local millers who have been engaged in irregular warehouse transactions.

Further, the NFA, according to Marcos' resolution, cited its council's Resolution No. 1025-2022 dated January 25, 2022, which provides that palay can be stored for a maximum of six months and three months critical storage for rice.

"The sold NFA stocks were already stored for more than three months, thus, the sale transactions were in accordance with the approved NFA Council Resolution," the NFA said, as cited by Marcos in PS Resolution 940.

Marcos also included in PS Resolution 940 a Commission on Audit observation dated February 20, 2024, which reported that the sale of 349,100 kilograms of well-milled rice at P25 per kilogram to private individuals and rice millers, amounting to P8.727 million, lacks the necessary NFA Council authority and did not undergo the required bidding process in violation of Section 5 of the 2014 NFA Code of Corporation Governance.

"COA noted that such sale resulted to a loss of Php3.631 million on the part of the national government and that such casts doubt on the propriety of the procedures adopted in the disposition of aging stocks, transparency and the appropriateness of the selling price of palay," Marcos said in her resolution.

On Monday, Agriculture Secretary Francisco Tiu Laurel Jr. said he would temporarily take over the NFA as the suspension order covering nearly 140 officials and employees takes effect.

In a statement, Laurel said the suspension order of the Ombudsman against 139 NFA officials and employees — including administrator Roderico Bioco and assistant administrator for operations John Robert Hermano — will be implemented on Monday, March 4, 2024.

Laurel earlier created a panel to look into allegations that certain NFA officials authorized the sale of milled rice stored in the agency’s warehouse for P25 per kilo without bidding and after purchasing the grains in palay form at P23 per kilo.

Following this, the NFA issued a statement saying that it is mandated to keep and dispose of 99.9% of its stocks in good and consumable condition.

The Rice Tariffication Law, which allowed liberalized importation of rice, removes the NFA’s role to regulate the rice sector, as well as allows it to be the only agency that can import rice to the country.

The NFA’s mandate now solely focuses on ensuring sufficient supply of buffer stocks of rice in the Philippines — 30 days worth of the country's total consumption during the lean season, and 15 days otherwise. —KBK, GMA Integrated News