Obsession over fiscal balance behind gov’t proposal to increase NFA prices – Ibon

The government’s obsession with balancing the budget to satisfy its creditors is behind the proposal to increase National Food Authority (NFA) rice prices, according to independent think-tank IBON Foundation.

Record rice imports are needed to make up for shortfalls in local production, which could mean as much as a P64.1-billion subsidy for NFA rice this year— an amount that it is over five times the 2007 national government deficit of P12.4 billion. To achieve fiscal balance, the administration has opted to increase NFA prices and lift the rice import quota to allow more private importation, said IBON research head Sonny Africa.

“This is another situation of the administration being more concerned about impressing creditors than addressing the deteriorating welfare of the country’s poorest,” Africa said. “It comes on top of the regressive increased value-added tax in 2005 and drastic cuts in social services spending especially in the period 2001 to 2006.”

As it is, the country’s rice cartel and other hoarders are already exploiting the situation of expensive NFA rice to manipulate stocks and raise prices even higher, he added.

The administration trumpets successes on the fiscal front. But the current
problem of rising rice prices confronts it with the challenge of translating any so-called gains into concrete benefits for the people, said Africa. (Ibon)


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