Philippines rice crisis: NFA’s government-to-government supply plan fails as Thailand and Vietnam opt out

By Pearly Neo contact

- Last updated on GMT

Thailand and Vietnam have backed out of the bidding process to supply rice to the Philippines, due to the National Food Authority’s (NFA) ‘difficult’ Terms of Reference (TOR). ©Getty Images
Thailand and Vietnam have backed out of the bidding process to supply rice to the Philippines, due to the National Food Authority’s (NFA) ‘difficult’ Terms of Reference (TOR). ©Getty Images

Related tags: Philippines, Thailand, Vietnam, Rice

Thailand and Vietnam have backed out of the bidding process to supply rice to the Philippines, due to the National Food Authority’s (NFA) ‘difficult’ Terms of Reference (TOR).

The Philippines has been facing a national rice crisis​ over the past several months, with prices steadily on the rise and inflation reaching 6.7% in September 2018, the highest the country has seen in nine years.

Despite rice imports being introduced earlier in the year, and President Rodrigo Duterte denying any rice shortages​, the rapid climb of rice prices has not been deterred. The bid is hoped to bring in enough rice to remedy this situation.

According to the NFA’s official statement, the bid was for “203,000 metric tons (MT) of 25% broken long grain white rice under a government-to-government tender with […] Thailand and Vietnam, [who both have] existing Memorandum of Agreement on Rice Trade with the Philippines.”

Maria Mercedes Yacapin, NFA Committee Chair on Government-to-Government Procurement, read a letter from the Thai government during the Opening of Bids: “The TOR, even with amendments, ‘remains difficult… in terms of compliance,’ thus the DFT ‘will not participate in the G to G procurement’.”

Vietnam had also submitted a letter citing difficulties meeting the TOR which was read during the Opening of Bids.

“Bach Ngoc Van, Deputy General Director of Vietnam Southern Food Corporation (Vinafood 2), said they ‘could not meet [the] Terms of Reference (TOR)’s regulations” thus they will not participate in the bidding’,”​ said NFA.

Vinafood 2 is a Vietnamese state-run enterprise.

NFA spokesman Rex Estoperez told Reuters that the TOR were ‘more stringent’​ in response to concerns from previous rice purchases, including health and safety issues.

Although the specific TOR portions that Thailand and Vietnam found difficulty with were not stated, NFA spokesperson Gerry Imperial said in an interview with CNN​ that: “Their main consideration is the shortness of the delivery period.”

This was concurred by Agriculture Secretary Emmanuel F. Pinol, who said in a briefing that the bid fell through due to both countries being unable to commit to a December 15 delivery date.

“They are now negotiating to take Dec. 15 out of the contract, and they prefer a deadline of end-December with deliveries to start by Dec. 15,” ​he added.

According to GMA,​ both countries attended the auction, but did not submit any bid.

This 203,000 MT is the balance from the NFA’s prior Open Tender bid in October 18 for 250,000 MT of rice.

“With majority of the bid offers exceeding the NFA’s approved budget of US$428.18/MT, only 47,000 MT was awarded to three suppliers who offered prices lower than the approved budget,” ​said NFA.

The three suppliers at the time were Vinafood 1, Vinafood 2 and Thai Capital Crops Co Ltd.

In another statement, the NFA revealed that another bidding for this 203,000 MT will be scheduled.

Failed bid ‘not a problem’ for Philippines’ rice prices

Imperial also commented that this failed bid will not have any serious effects on the country’s rice prices.

“[It is] not a problem, it is for 203,000 MT. 47,000 MT is already coming in in November [from the previous bid),” said Imperial.

“[Rice] prices are already going down due to the Suggested Retail Price (SRP) implementation​.”

More bidding plans underway

A pre-bid conference has also been conducted by the NFA in the hopes of raising bidders for an additional 500,000 MT of rice imports.

“[The] pre-bidding conference [was] to allow prospective bidders to clarify provisions of the Terms of Reference (TOR) covering the importation,”​ said NFA.

13 companies from Singapore, Vietnam, Thailand, Pakistan, and the United Arab Emirates participated in the pre-bid conference, according to BusinessWorld​.

The opening of this bid will be on November 20.

“The first half or 250,000 MT should be delivered not later than December 31, while the remaining 250,000 MT should arrive in the country not later than January 31, 2019,”​ it added.

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