Banayo: Resigned under what cloud?

By Lito Banayo

Resigned under what cloud?

The NFA under my two-year watch earned 1.6 billion pesos in 2011, then 2.6 billion in 2012, from import permits granted to the private sector to finance needed rice imports.

You know how much NFA earned from issuing the same rice permits, through a first come-first served method, which means the Bids and Awards Committee became a misnomer because no bidding was ever done, and only 2 cartel heads monopolized imports? 103 million pesos in 2010.

What did we do?

First we lowered rice imports. From 2.45 million tons in 2010 (which we inherited and prompted P-Noy to say “ang daming bigas na nabubulok na sa mga kamalig”), imports were lowered to 860,000 tons in 2011, and then 500,000 tons in 2012.

That’s not because of quantum jumps in rice production. The gap between consumption and domestic rice production cannot be bridged overnight. That’s because NFA had too much rice in its warehouses it had to slowly dispose of in a one and a half year period over 2010 requirements.

The fact that smuggling continues is simply because there is a market for it. We are not producing enough palay yet.

Now, did prices of palay at farm-gate go down during my watch, thereby impoverishing farmers? No sir.

It even went up for last year’s 2012 harvests to as high as P19,50 per kilo of palay, higher than NFA’s buying price of P 17 per kilo.

What does that simply mean? The law of supply and demand, simple. Which by the way, cannot be repealed.

Now, what did DBM recommend to Congress in July 2010, in submitting it’s proposed General Appropriations Act?
From 8 billion in 2010, of which more than 6 billion was released before the elections, leaving me with less than 2 billion for the second half of the year which is when the PNoy administration, and I, took over, DBM recommended a ZERO budget for NFA.

Why? Because daw we had a 178 billion peso debt inherited from the previous government. By the way, NFA’s debt in 2000 was 12 billion. In 2010, it grew to 178 billion, or 166 billion more in the 9 and so years of GMA.

Congress restored 2.5 billion for NFA in 2011, by reducing the PPP budget of the Department of Agriculture in half from 5 billion. (No such PPP project has materialized to my knowledge). Thank Congress for small mercies. 2.5 billion in 2011 compared to 8 billion in 2010. But, beggars cannot be choosers.

In 2012, it became a 4 billion peso budget for NFA. Still and all, we managed to:

1) Reduce our inherited or “legacy” debt from 178 to less than 150 billion in 2 years, and, we restructured short-term debt by 75 billion pesos, into longer-term maturities (10 years) with the private banks supporting us.

2) Earn for NFA 4.2 billion pesos in import permits, as against 103 million (that’s 40 times plus over) because there was now an open, transparent bidding, instead of simply giving out the permits to a favored two. The bidding process was covered by media, by the way. Nobody ever said the bidding was rigged. From 25 pesos per sack or 50 centavos per kilo of rice (flat fee) in 2010, bids went as high as 3.50 per kilo in 2011, and then in 2012, to as high as 6.70 per kilo.

What did we do with the money earned? That is what we used to augment the 2.5 billion, and the 4 billion that we were niggardly granted as budgetary support to buy palay from farmers. Do the arithmetic. Add up our import fee income with our meager budgetary support, and compare this to what we were able to buy from local farmers as support price. They even up.

Now, should we be sad that private millers and traders bought palay at 18 to 19.50 last year, and government through NFA could only offer 17 pesos? N. On the contrary, we should be happy. It means, we were able to manage the situation to keep farmers contented, without unduly increasing consumer prices.

Did smuggling of rice keep consumer prices low. In hindsight, yes, but that is because Customs probably slept on the job. Clearly, if there are no NFA import permits, the rice is illegal, smuggled. How did they come in? Not through the NFA; our personnel cannot enter Customs or ports, unless it’s our own imports that are being unloaded, and then still, with Customs permission.

All these were properly explained to the Senate investigating committees by me. But I resigned in September 30, 2012, to file my certificate of candidacy for a congressional seat in Butuan City where my family has been in residence for the last 55 years.

Unfortunately, I suffered chest pains on Dec. 12, 2012, and had to go to the Philippine Heart Center. The doctors did not allow me to leave without an angiogram, and on the 14th, an angioplasty. Good I was in Manila at the time.

I could not attend a Senate hearing on December 17, for obvious reasons. I was discharged from the hospital just about a day before, and I wrote a letter to the Senate, together with my receipts from the hospital and a doctor’s certificate. I wrote the Senate that I would attend the next hearing, and even followed that up in early January this ear, but the Senate has not rescheduled a hearing.

And what would I respond to, that I have not yet previously explained in several hearings in 2012? The outburst of one Simeon Sioson, who came to the hearing on December 10, UNINVITED, just to point a finger at me as past Administrator of NFA, as having rigged the bidding on imports to favor a few?

Did he bring proof? NO.

And who is this Sioson? A farmer cooperatives “leader”, who kept on participating in NFA bids but always lost, and whined thereafter. What did he tell the Senate? That NFA should have just given away the import permits to farmers coops, not bidded them out, as in “hating-kapatid”. But that’s not what our Procurement Laws state.

I was not invited to that hearing, because I had already said my piece in late October, and explained what we in NFA had done. On the basis of Sioson’s uninvited presence mouthing allegations without a shred of proof, I was told (through media) that I would be invited to the next hearing, which was on Dec. 17, 2012, three days after my heart procedure. By the way, Perry, I was hospitalized in a government hospital, Philippine Heart Center, not the famously expensive St. Luke’s.

Now what triggered the rice smuggling expose of Senate Pres. JPE? The entry into Subic of 420,000 bags of Indian rice. That’s 21,000 tons, mind-boggling because of sheer volume, yet in fact, only 2/3 of a day’s consumption of rice in the Philippines.

What came out of the Senate investigation? The Indian owners said these were rejected in Jakarta, and they needed a place to warehouse it while looking for buyers (abroad, they said). What had NFA to do with it? None.

Subic customs wrote me a letter on April 17, 2012, asking if the said shipment had an NFA permit. I responded immediately, April 18, to state there was no NFA permit.

When did Customs seize the rice shipment? Late June or early July or thereabouts.

What else came out of the hearings?

They were unloading the rice as early as April 4, 2012. By April 20, everything was warehoused in the bonded Subic bodega.

But they wrote me only on April 17, 2012, right?

Something does not wash.

Now, for the benefit of Mr. Arcilla. I did a private-sector management audit when I came in. I presented the private-sector audit to the President, in the presence of the entire economic team and the DA Secretary. I sent copies of the private-sector management audit to the Office of the President and the Ombudsman, which requested for a copy.

Meanwhile, life had to go on. I had food security to manage. I had problems to solve right after Typhoon Pedring laid flat Nueva Ecija’s palay harvest in 2011 (1 million tons lost in one day and night of howling winds and rushing waters). I had to keep consumers from complaining, and farmers to keep planting because they were making tidy profits.

I state quite clearly: I did my job. I accomplished what my responsibility, and NFA’s mandate, called for.

I have borne in silence all insinuations that NFA under my watch had to be responsible for smuggling. That’s not the responsibility of the NFA. That’s some other agency, and someone else’s task.