NFA eyes P5B bonds to pay off due debts

10/23/2009

The state grain agency National Food Authority (NFA) joined the borrowing bandwagon indicating plans to issue up to P5 billion worth of 10-year debt papers on Oct. 27, according to the Bureau of Treasury.

The NFA, which is tasked with securing domestic rice supply and stabilizing prices, earlier indicated needs to raise P27 billion to fund operations and repay maturing obligations. It said it may float bonds to complete its funding requirements in several tranches.

The NFA has debts of around P100 billion, most of which is falling due within a year.

Most of the debts were incurred in the importation of rice which it sells at subsidized prices. The Philippines is now the biggest importer of the grain in the world with an average yearly importation of 1.5 million metric tons.

Lately, it indicated plans of importing up to 2 million metric tons of rice after back-to-back typhoons early this month caused devastations to rice producing provinces in Luzon.

The NFA is buying an initial 250,000 tons from Vietnam through an import tender on Nov. 4.

“We’re going to most likely buy again,” NFA deputy administrator Ludovico Jarina told reporters when asked if there would be more rice import tenders this year.

Rice prices in the world market rose in reaction to the government’s indication of an increase in rice importation.

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