Wednesday, February 12, 2014

Recto: Probe sorry state of P12-B fund made possible by rice imports

MANILA-Senate President Pro-Tempore Ralph Recto has called for a probe into the “sorry state” of a P12 billion agriculture fund pooled from tariff payments on rice and other agricultural imports which were later loaned to groups most of whom have defaulted on their repayment.

Recto filed Senate Res. 495 directing the Senate committee on agriculture to inquire on the ACEF and evaluate its status.

Recto said audit reports on the Agriculture Competitive Enhancement Fund (ACEF) are littered with adverse findings like  “dismally low repayment rate”, “double recording of loan releases”, “return to sender of demand letters”, and “loans without collateral.”       

Some grantees, Recto said, “have done a Houdini and can no longer be found.”

He said P2.5 billion worth of loans were covered by letters of confirmation whose addressees could not be found or who did not reply at all.

Conceived as a safety net when the country joined the World Trade Organization, the ACEF was created by RA 8178 in 1996  to assist farmers affected when tariff walls came crashing  down  as a result of  the  Philippine ratification of the  General Agreement on Tariffs and Trade.

It was to be funded by “in-quota tariffs” collected from imported commodities, such as rice, placed under the restricted Minimum Access Volumes (MAV) which the Philippines imposed.

By May 15, 2013, total actual collections of ACEF has reached P11.8 billion, of which P10.3 billion was from “MAV” quotas and P1.2 billion was from so-called sugar conversion fees.

Of the P11.8 billion, almost P8.9 billion was released by the Department of Budget and Management to ACEF Executive Committee  which administers the fund.

The said body in turn released P2.6 billion as grants to local governments, government corporations and state colleges, and P5.9 billion as loans to 304 groups which, except for 10, were private corporations.

Almost a billion pesos of the grant portion went to the National Agribusiness Corp. (NABCOR), a DA-subsidiary President Aquino recently ordered abolished.

Quoting audit reports, Recto said the loan portion of the ACEF fund  suffered from low collection rate. “For every one peso lent, only 14 centavos were collected.”

The amount in arrears is P5.1 billion, he said. “For that amount, we can repair 5,000 kilometers of farm roads.”    

Recto said that while 294 private parties were granted a total of P4.4 billion in loans, only 23 had fully paid as of December 2011.   

Of the remaining 271 private borrowers, only 15, or 5 percent of the total, had no arrears. 

As a result, P2.2 billion in loans were already due and demandable two years ago.

Recto said all ACEF transactions audited by the CoA in 2010 and 2011 transpired before the Aquino administration.

He said current agriculture officials have implemented “remedial management” on ACEF utilization as spelled out in Department of Agriculture Administrative Order 12–2013.

Among these are loan restructuring, the suspension of some surcharges and penalties, and the demand for more collateral cover.

“In spite of these, we have to study the present state of ACEF,  draw lessons from how it was used, so that if it will be retained as a mechanism of using imported rice duties  to promote farm productivity, we avoid the shortcomings of the past,” Recto said.

“If we are going to import more rice in the future, then we must see to it that the original intent of plowing back to farmers the taxes levied on these imports is honored,” he said.

As of May last year, ACEF has an available balance of P3 billion. 

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