Lady financier used co-op’s import permit

PANGASINAN, Philippines—A farmers’ group in Pangasinan, one of the cooperatives allegedly tapped by commercial traders as a dummy to import huge amounts of rice two years ago, said a financier from Manila borrowed its import permit from the National Food Authority (NFA).

Bilmario Cordero, chair of the Sta. Maria Farmers Multipurpose Cooperative, said cooperatives had no direct hand in importing rice, but were merely used by big businessmen.

Like other cooperatives, “we have financiers who borrow our permits and they are the ones actually importing rice,” Cordero said.

“We are not capable as we don’t have enough capital. So we have an agreement with Sofia Guzman from Manila. We gave her the authority to use our permit to import 100,000 bags in 2009,” Cordero said by telephone on Wednesday.

Guzman’s name appeared on several manager’s checks paid by cooperatives to the NFA as service fee so they could import the grain tax-free.

She was identified as the representative of several rice traders and farmers’ cooperatives.

Cordero said cooperatives did not really earn much from the transactions as Guzman only gave them P2 for every bag of imported rice.

He said Eastern Sta. Maria Multipurpose Cooperative and the Pindangan Estate Multipurpose Cooperative based in Alcala town were also funded by Guzman.

Guzman was among the 13 people that the National Bureau of Investigation charged in April 2008 with hoarding, illegal price manipulation, unauthorized possession of NFA rice and unauthorized re-bagging of government rice into commercial sacks.

The charges were filed following NBI raids on warehouses in Valenzuela, Bulacan and Laguna during a government crackdown on rice hoarders.

The three cooperatives [that Guzman funded] are registered and have been given certificates of good standing for tax exemption privileges, said Evelyn Nuñez, the officer in charge of registration of the Cooperative Development Authority (CDA) in Pangasinan.

“But it is the CDA central office which gives the permit for importation purposes,” Nuñez said.

An NFA official in Pangasinan distanced his office from the alleged irregularities in the rice importation program of then President Gloria Macapagal-Arroyo.

Centralized transactions

Nicanor Rosario, head of the NFA office in eastern Pangasinan, said all transactions in the program were done at the NFA main office and local offices were not consulted.

“We have no participation. Everything is done in the central office—from bidding to giving of notice of awards. We don’t have documents here. I know some of the multipurpose cooperatives (MPC) [named in the report], but I learned only about the involvement of the MPCs based in eastern Pangasinan in the newspapers,” Rosario said on the phone on Wednesday.

While it is true that Pangasinan is a major rice producer, local farmers sell their harvest to traders, who in turn bring and sell it to other provinces, he said.

“The rice we produce does not stay in the province. We cannot control rice [trading] as there are traders who buy and sell the produce to other provinces,” Rosario said.

Legalized smuggling

An audit team hired by the NFA said there were elements of a “cartel” among rice traders that took part in the agency’s private sector-financed importation program in 2008-2010.

The team described as “legalized smuggling” the rice importation program in the last three years of the Arroyo administration.

It said NFA’s first-come, first-served rule was violated because some bidders had received permits despite being absent or late in the queue.

The names of contact persons on the manager’s checks submitted by different companies to the NFA were also the same, the audit panel said.

The audit team urged the NFA to bid out service fees and not to give rebates to commercial rice traders. It also suggested that the NFA do a background check on the participating groups to ensure that they were unrelated to one another and that they had the capital to buy rice.

The team looked into 18 groups, 10 from Pangasinan and eight from Cebu, which participated in the private sector-financed rice importation program.

NFA’s importation program culminated in the delivery of 2.4 million metric tons for 2010, which the UN Food and Agriculture Organization described as one of the highest import volumes on record.

The audit team said the program in the last three years of the Arroyo administration resulted in huge losses for the NFA. A 2009 report by the Commission on Audit placed NFA losses at more than P100 billion in a span of 10 years.

Program to continue

NFA Administrator Angelito Banayo defended the private sector-financed importation program, saying the agency has implemented reforms to ensure that only qualified bidders are given licenses.

Banayo said the government was able to raise revenues from the program.

He said the government earned P1.52 billion from this year’s importation bidding, which was held last March and April, through service fees.

Banayo said the NFA allowed the private sector to buy the bulk of the rice imports to cut their losses.

This year, the government pegged the country’s rice import requirement at 860,000 metric tons, of which 660,000 metric tons were given to the private rice traders. The government bought the balance from Vietnam at a cost of P4 billion.

34 traders got permits

The NFA said 34 commercial rice traders were given import permits.

“This year, due to an inherited indebtedness of P176.7 billion and tight finances, the NFA gave the bulk of the imports to the private sector, while buying only 200,000 metric tons, or less than 10 percent of the previous year’s imports,” Banayo said in a statement.

Unlike the previous administration’s allocation of import volumes to the private sector on a first-come, first-served basis, the Aquino administration’s first import allocations were awarded “after actual and open bidding for the service fee, which accrues to the NFA and thus, the government,” he added.

Banayo said the NFA imposed stringent conditions on the bidders and raised the service fee. Before, it was fixed at only 50 centavos per kilo. In the current importation program, the NFA has set a floor price of P2 per kilo.

He said the NFA conducted three bidding sessions for the importation of 660,000 metric tons by the private sector after some bidders failed in the post-qualification process.

In Malacañang, presidential spokesperson Edwin Lacierda said the 2009 COA report that showed the NFA had suffered losses amounting to P100 billion in 10 years was vital in building a case against officials responsible for the alleged irregularities in the Arroyo administration’s rice program.

But Lacierda said Malacañang had yet to get a hold of a copy of the COA findings.

“We don’t know the exact details of the COA report other than those that were mentioned in your paper,” Lacierda said at a news briefing, referring to the Inquirer story on the NFA losses reported by the COA.

“The COA report is important as a basis to proceed with any prosecution,” he added. With reports from Kristine L. Alave and Norman Bordadora