MANILA, Philippines - (1st UPDATE)  The National Food Authority (NFA)  said it has created a systems and management team that will look closely into the operations of the agency, especially rice importations.

At a briefing in Malacanang on Tuesday, NFA Administrator Angelito Banayo said the mandate of the group will be look into specific areas of  concern raised by President Benigno Aquino III in his state of the nation address last Monday.

These include allegations of overstocked warehouses, P177 billion debts of NFA since June 30, rice wastage, inability  to help farmers, allegations of anomalies in rice importation, local purchase, contracting of services and selling.

In his speech, Aquino said that NFA's debts swelled to P177 billion because of its excessive rice importations over the years.

"It is a peculiar situation that we find ourselves in," said Banayo, adding that the systems audit will be very thorough."

"The systems audit will investigate the purchase and importation protocols insofar as timing and volume. Kailan dapat  mag-import at mamili, gano kadami ang dapat bilhin. We may need 1 million ton, pero hindi naman bibilhin yan ng ora orada," said Banayo.
 

He said the team will study the inventory system to prevent waste and spoilage of stocks, the methods and procedures of selling stocks to ensure these are sold efficiently.
 

Aquino also said there is a lot of wastage at NFA's warehouses, and Banayo said there could be a basis for the allegations of  corruption as well, particularly in the area of rice distribution.

"May posibilidad ang corruption. Kasi sino ba ang nagde-decision kung alin nga ang bulok na bigas - di po ba mga tao sa bodega, mga NFA managers, nasa 740 or more warehouses all over the country. May posibilidad na kwentahin na bulok ang bigas  at ibenta na sa merkado, at ang kumikita ay hindi magsasaka, kundi mga traders, those are the possibilities."

A major problem he said, is NFA's inability to help farmers. Because NFA warehouses are full and they buy at prices higher than private traders, it does not have enough facilities to store the commodity.

Another disadvatange of the NFA is that  unlike the private traders, it cannot pay farmers in cash or even in advance. This forces farmers to agree to a lower price  of P11 to P13 a kilo of palay, substantially lower than NFA's buying price of P17 a kilo.

It is very likely, Banayo said, that anomalies also occur in the importation, as well as local purchases of rice. The situation is made worse by smuggling, he said.

"Smuggling is a problem of the Bureau of Customs. In the same way that oil and sugar are smuggled...we need help because if there is an oversupply due to smuggling, it is the rice farmers that suffer."

He said that annually, the volume of rice illegally brought into the country is 400,000 to 500,000 metric tons, which is equivalent to 8 million to 10 million sacks of rice.

Banayo said that the systems and management audit team will have partial results in half a month, and which will be the basis for some major reforms in the structure of the NFA.

He said the team will make recommendations, and may propose changes or ammend procedures that are defective, add systems and fiscal safeguards and reshuffle or remove personnel accordingly. Rocel Felix, abs-cbNews.com