Former agriculture secretary . Arthur Yap, now Bohol third district congressman, took exception to published reports detailing an alleged overprice in rice importation during his DA watch. The Bohol solon texted the Post yesterday to belie allegations of impropriety in the importation of rice supply in his capacity as DA secretary during the regime of former President Gloria Macapagal-Arroyo. The National Food Authority was in the center of accusations of General Manager Angelito Banayo that it imported rice on several occasions during GMA's time at an overprice amount of $61 per metric ton. As this developed, Pres. P-noy, in what could be the first instance of graft charges being brought against Arroyo officials, the chief executive on Friday ordered further investigation of the Banayo report.

Turning the tables on Banayo, Yap has accused instead the NFA administrator of muddling the rice import data that he presented to President Aquino showing that the previous Arroyo administration had bought the country's staple grain at inflated prices. A member of Mr. Aquino's legal team said that further investigations were already under way to pinpoint those responsible. The President on Friday issued instructions to conduct a follow-up investigation of Banayo's report alleging that the Arroyo administration had vastly overpriced its imports of rice over a 10-year period, thus supposedly contributing to the P177-billion “debt” of the NFA. Mr. Aquino said the Banayo report had been discussed and those liable would be charged. “Several departments have been given assignments, which I am not yet at liberty to discuss,” he said. An executive summary of Banayo's report claimed that the overprice increased considerably in the last three years of the Arroyo administration, 2008 to 2010, when it reached $125 a ton. The overprice in the last three years accounted for more than 86 percent of the total overprice during the 10-year period, Banayo claimed. Invalid comparison

In a statement to the Post yesterday, Yap said Banayo had used “raw spot prices” of rice picked up on the Internet and the actual landed price of the rice in making his conclusion that rice imports during the Arroyo administration had been overpriced by an average $125 per metric ton in its last three years and an average of $60 per metric ton over a 10-year period. Yap pointed out that a “spot price” was obviously lower than the landed price which included “the cost of transport, insurance, freight, arrival schedule, volume, specifications and terms of payment.” “The spot price is on ‘as-is-where-is' basis and if the benchmark for prices are spot quotations, then they are of no value. You cannot compare the prices registered in tenders with serious suppliers as against spot prices which are merely indicative,” said Yap, who also served as NFA administrator before becoming agriculture secretary. “Commodity prices are inherently volatile as well. You cannot compare the prices registered in tenders with serious suppliers, as against spot prices which are merely indicative,” he said. Yap also noted that state and private traders from the world's biggest rice exporters—Thailand, Vietnam and Pakistan—took part in the NFA rice auctions and “none of the bidders ever complained of foul play.” ‘Misguided' claims

He also said that Banayo may have been “misguided” in claiming that the NFA had “overstocked” its warehouse beyond the mandated 30-day inventory level. He explained that the 30-day level for NFA rice inventories was not a fixed benchmark but a minimum, so that “when the private sector does not import, the NFA usually takes over the burden of importing the volume balance for food security.” With the country reeling from the devastating effects of Typhoons “Ondoy” and “Pepeng,” and the long dry spell brought about by the El Niño weather phenomenon from 2009 to 2010, Yap said “there was a need to buffer stock early at above-normal benchmarks” which was why the inventory levels had risen to slightly more than 50 days and not 70 days as claimed by Banayo. Yap said that it was an inter-agency committee on rice and corn—consisting of the finance, trade and industry, science and technology and agriculture departments, the Pagasa weather bureau, and the Bureau of Agriculture Statistics—that recommended the importation of 3.2 million metric tons last year. But he said the Arroyo government only imported 2.2 million metric tons out of the 3.2-million metric ton target while the private sector brought in only 245,000 metric tons. “Clearly, the recommended import volume was not breached,” he said.

Losses from subsidies

Yap also explained that the P177 billion were losses that the NFA has been accumulating since 1972 when the agency was created primarily to ensure that rice was sold at prices within the reach of the masses. “The NFA subsidizes rice price, hence the losses. That is why I filed House Bill No. 160 calling for the removal of that provision. The NFA must supply rice at market prices to stop losses,” he said. The poor can be helped through the Department of Social Welfare and Development's conditional cash transfer program, he said.

Building up case

A member of the Palace legal team said Mr. Aquino has ordered his lawyers to start to build up the government's case against those responsible for the alleged overpricing at the NFA. The Palace official, who asked not to be named because he was not authorized to speak on the issue, said Banayo's report to President Aquino just provided the preliminary information that would lead to the filing of charges. “The instructions I've been given is to conduct further investigation, who were involved and how it happened,” the official said. “If the findings merit it, charges will be filed,” he added. Communications Strategy and Development Secretary Ricky Carandang acknowledged the need for more details regarding the overpricing that allegedly contributed to the NFA's 177-billion debt.

Broad strokes

“At this stage, we need more fact-finding,” he said. “What we have now are the broad strokes. From the fact-finding, we would know how to proceed,” he added. The NFA administrators during the nine-year Arroyo administration included, besides Yap, Domingo Panganiban, Anthony Robert Abad, Gregory Tan and Jessup Navarro. The deputy administrators during the same period were Tan, Edgar Asuncion, Michael Angelo Paderanga and Pedro Hernando. (With reports from the Philippine Daily Inquirer)