By Jasper Y. Arcalas, August 29 2019; Business Mirror

Image Credit to Business Mirror

AFTER months of uncertainty, the Department of Budget and Management (DBM) said it will release the remaining P4 billion for a fund that will bankroll initiatives to help planters cope with the influx of cheap rice imports.

The DBM said, however, that it will only disburse the amount once the Bureau of the Treasury (BTr) certifies that there is excess government money which can be allocated for the Rice Competitiveness Enhancement Fund (RCEF).

During a Senate hearing, Budget Assistant Secretary Rolando U. Toledo settled the score over the controversial P5-billion fund that the DBM released to the Department of Agriculture (DA) in December.

Toledo said the P5 billion, which was released through special allotment release orders (Saro), was a supplement to the DA’s national rice program.

The DBM released the money to support farmers in anticipation of the passage of the proposed rice trade liberalization law.

Since the DA has already returned P1 billion of the said P5 billion, the DBM owes rice farmers P4 billion. The DBM disbursed P5 billion for the RCEF last month.

Toledo also clarified that the P5 billion released to the DA through the Saro could not be considered as part of the RCEF since Republic Act (RA) 11203, which mandated its creation, had not yet been passed when the money was given. The money, he said, was sourced from the national government’s extra unprogrammed funds.

“So [the DBM] still has to release another P4 billion [this year],” he said during the Senate Committee on Agriculture and Food hearing on Wednesday.

“But the release of the P4 billion is subject to the excess revenue collection. Because it is in the unprogrammed funds and that’s [what was prescribed] in the [2019 General Appropriations Act],” he added.


However, senators were quick to point out that the DBM must not wait for excess revenues to allocate funds for the RCEF. Sen.Cynthia A. Villar said the national government must give farmers P10 billion regardless of the government’s revenue collection.

“What is in the law is P10 billion. It is immaterial if you have excess revenue. You cannot reason out [the need for] excess revenue because we agreed that we will not pass the RCEF if [the allocation] is not P10 billion a year,” said Villar, who chairs the Senate Committee on Agriculture and Food.

“So you owe farmers P4 billion because you made the mistake of giving funds immediately to the DA. You should release that P4 billion without any condition,” she added. Toledo said the DBM still needs the BTr’s certification that the government has excess revenues before releasing the P4 billion, since the RCEF consists of unprogrammed funds under the 2019 General Appropriations Act (GAA).

“It is in the provision of the 2019 GAA and we must follow it. We just wait for the certification of BTr and [we will] release that P4 billion,” he said.

For months now, the DA and the DBM have been debating on whether the P5 billion is part of the RCEF despite the failure of Congress to pass the proposed rice trade liberalization law before the end of 2018.

The DBM had argued that the P5 billion was part of the RCEF but the DA said it was a supplementary fund for its national rice program.


This developed as Sen.Risa Hontiveros moved to fast-track the subsidies for rice farmers, warning against the negative effect of the entry of cheap imported commercial rice on local planters.

“Government should immediately release subsidies and assist rice farmers,” the senator said in Filipino after a joint hearing of the committees on agriculture and food, finance, trade, commerce and entrepreneurship.

She pressed for faster and additional subsidies for rice farmers to help them mitigate the negative effects of RA 11203.

The senator said that while the law was expected to increase the supply of cheap commercial rice during the lean months of July to September, it also posed risks to planters as it cuts the farm-gate price of unhusked rice.

Hontiveros cited computations indicating that around 42,000 farming households will fall into poverty if subsidies are not immediately given by the government.

The average loss of the poor and nonpoor rice farming households are P8,700 and P19,700 respectively, while the average gain is P5,300 and P3,900, respectively. In short, the savings from cheaper rice consumed by rice farmers could not offset the loss from the lower price of the palay they sell.

She also noted that the RCEF will have to be implemented for several years before it could improve the competitiveness of planters. In contrast, Hontiveros noted that the “income shock” is immediate, estimating that at a rate of P5,500 per hectare per planting capped at 2 hectares, decoupled payment will cost the government P10.6 billion annually.

The senator said government must not delay the grant of assistance to rice farmers as they could end up losing income, and be plunged deeper in debt and poverty due to the drop in farm-gate prices.

At the same time, she suggested the need for urgent reforms in the rice trade liberalization law. Hontiveros noted that under the law, tariff collections from rice imports must exceed P10 billion before direct financial assistance could be extended to farmers.

“For instance, it is expected that tax collection from rice imports this year will not be lower than P13.5 billion. I will urge [national government] to advance this money and not wait for 2020. We have the money as agencies have been underspending,” the senator said in Filipino.

She also prodded the National Food Authority (NFA) to buy the local farmers’ rice as part of their buffer stock at a relatively competitive price while they wait for the needed subsidies to be distributed.

Higher budget

Meanwhile, President Duterte vowed to prioritize farmers during the last two years of his term.

Speaking during an event at the Department of Agrarian Reform (DAR) in Quezon City, Duterte also called on agrarian reform beneficiaries to support the development of the farm sector.

“This year, the one with the highest budget allocation is education then the Department of Public Works and Highways. Maybe in my last two years, I will prioritize you, farmers,” he said in a speech during the 31st anniversary celebration of the Comprehensive Agrarian Reform Program (CARP) and Certificates of Land Ownership Award (CLOA) Distribution.

Duterte also led the ceremonial distribution of CLOAs to agrarian reform beneficiaries.

While the President did not specify what particular budget item he was referring to, the proposed budget for the DA next year is P56.8 billion, making it the eighth department with the highest budget allocation.

The proposed DA budget for next year is 14.38 percent higher than this year’s budget of P49.67 billion, but it is a far cry from the P333 billion sought by the agency.

In March, then Agriculture Secretary Emmanuel F. Piñol said the President had instructed him to submit a budget proposal for 2020 that is “10 times bigger” than its present budget of almost P50 billion.

During the event, the President ack-nowledged DAR’s gains in the implementation of CARP in the past three decades, but stressed the need to achieve the ultimate goal of the program.

“As we highlight our accomplishments and milestones in implementing CARP, let us never lose sight of the primary aim of this program, which is to uphold the welfare of our landless farmers, promote social justice, and attain sound rural development through the equitable distribution of all agricultural lands across the country,” he said.

He also said the administration will continue to correct the historical injustice brought about by the misallocation of funds that resulted in social injustice and sluggish rural economy.