The Philippines, the world's largest rice importer, were likely to curtail the subsidies given to ensure the costly imported rice be sold at affordable prices on local markets, a senior government official said Monday.
Press Secretary Ignacio Bunye told local media the reduction in subsidies, now being mulled by President Gloria Macapagal-Arroyo as an option to ease the government's fiscal strains, would free up funds to boost domestic rice production instead.
Bunye said if the prices of rice on the international market remains high, it would make sense to produce locally and the role of National Food Authority (NFA), the government's rice importing arm, would be reduced.
However, the Press Secretary clarified that the subsidies would not be phased out in the short term for the pressing need of the government is to "put food on the table for ordinary Filipinos."
Global financial institutions have voiced concerns as in recent weeks the Philippines, pushed by a panic over looming rice supply shortage, scrambled to buy rice from the international market at whatever price it was offered.
Manila announced it planned to buy around 2.6 million metric tons of foreign rice this year to meet the domestic consumption. About 1.5 million metric tons have so far been secured in biddings.
The government said it intended to buy as much as 600,000 metric tons of rice in the upcoming tender in May, the fifth of the kind it participated since last December, though the rice price soared from around 350 U.S. dollars a ton to 1,120 U.S. dollars a ton in less than five months.
In response, the authority has boosted the subsidies to keep the price of government-subsidized rice sold on local market remains at 18.25 pesos (0.45 U.S. dollars) a kilogram.
UBS Investment Research, among other global institutions, said the cost for the Philippine subsidies would probably shoot up over43 billion pesos (1.05 billion U.S. dollars), or 0.6 percent of the GDP (Gross Domestic Products) for this year.
"There is an issue about how much we are subsidizing cheap rice being sold to the public, and there is an issue whether we can allow NFA to continue incurring these," Agriculture Secretary Arthur Yap was quoted as saying in a local television interview Monday morning.
Yap said he was confident that the domestic palay (unhusked rice) output would hit a new high of more than 17 million metric tons this year and the country was on track to achieve rice self-sufficiency in 2010 or 2011.
The archipelago country has a limited 2.54 million hectares of lands set aside for rice production. The government says it is doling out 43 billion pesos (around 1.03 billion U.S. dollars) to increase hectare yielding by encouraging the use of hybrid seeds, the improvement of irrigation and access to better but cheaper fertilizers.
Source:Xinhua
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