A REVIEW PAPER ON GOCC

PERFORMANCE:
NATIONAL FOOD AUTHORITY
 INTRODUCTION

• The Grain Industry Development Act of 1996

(RA 8178) mandated the National Food
Authority (NFA) to ensure food security by
maintaining a buffer stock of rice and corn in
the country. One of the ways NFA maintains
the buffer stock is through the procurement of
palay (unmilled rice) from farmers, which is
then milled and sold as rice in the market.
 GOCC Performance of National Food
Authority in the Philippines has come
under scrutiny due to various issues.
o The agency has been losing money due to low
procurement prices, high operating expenses, and
inefficiencies.

o NFA has failed to maintain a buffer stock of rice and corn,

leading to concerns about food security.

o NFA has been criticized for its management of rice

imports, with allegations of corruption and irregularities.
Efforts to Improve Performance of NFA:

• The Rice Tariffication Law was passed in 2019 to

increase competition in the rice market and lower
the price of rice for consumers.

• The Rice Competitiveness Enhancement Fund (RCEF)

was created to provide support to farmers to
increase productivity and competitiveness. It is
funded by tariff revenues from rice imports and
provides access to credit, training, and equipment.
NATURE AND
SCOPE OF
GOCC
 Characteristics
• The National Food Authority (NFA) is a
government-owned and controlled
corporation established under Presidential
Decree No. 4 in 1972. It is responsible for
ensuring food security in the Philippines by
maintaining a buffer stock of rice and corn. It
is governed by a Board of Directors, with a
General Manager as chief executive officer.
 Salient Features:
• Buffer Stock Management: NFA maintains a buffer stock of rice
and corn to ensure their availability and affordability in the
market.
• Procurement: NFA procures palay (unmilled rice) and corn from
farmers and local traders to augment its buffer stock.
• Regulation: NFA regulates the importation and exportation of
rice and corn in the country and ensures that they meet the
required standards.
• Distribution: NFA distributes its buffer stock to different parts of
the country to ensure the availability of rice and corn at a
reasonable price.
• Price Stabilization: NFA plays a crucial role in stabilizing the
prices of rice and corn in the market.
 Rationale
• The establishment of NFA was a response to
the country's need for a stable supply of rice
and corn, which are staple foods for most
Filipinos. It was created to ensure food
security and stabilize food prices, given the
volatility of the global market.
 Objectives
• Ensure the availability and affordability of rice and corn in
the market.
• Maintain a buffer stock of rice and corn to ensure their
continuous supply.
• Regulate the importation and exportation of rice and corn to
protect local farmers and ensure the quality of imported
commodities.
• Stabilize the prices of rice and corn in the market to protect
consumers and provide a fair return to farmers.
• Promote the development of the rice and corn industries in
the country.
 Basic concerns:
• The National Food Authority (NFA) in the Philippines is
primarily concerned with ensuring food security in the country.
Its main objective is to ensure the availability and affordability
of rice and corn, which are staple foods for most Filipinos. It
maintains a buffer stock of these commodities and regulates their
importation and exportation to protect local farmers and ensure
the quality of imported commodities. NFA is also concerned with
stabilizing the prices of these commodities in the market and
promoting the development of the rice and corn industries. It
provides support to farmers through its procurement program
and encourages the adoption of modern farming techniques to
increase productivity and improve the quality of local produce.
 HISTORY AND EVOLUTION

Marcos Administration (1972-1986):

• The NFA was established in 1972 to ensure the

availability of rice and corn in the country. It
was responsible for procuring, storing, and
distributing rice and corn, as well as regulating
the importation and exportation of these
commodities to protect local farmers and
ensure the quality of imported products.
 Corazon Aquino Administration
(1986-1992):
• The NFA expanded its role to include price
stabilization and promotion of rice and corn
production, providing subsidies to farmers and
implementing price stabilization measures to
prevent price spikes.
 Ramos Administration (1992-1998):

• The NFA's role under the Ramos

administration was to promote the
development of the rice and corn industries,
providing support to farmers and encouraging
the use of hybrid rice and other high-yield
crops.
 Estrada Administration (1998-2001):

• The NFA's role was to promote agricultural

development and ensure food security,
providing credit and technical assistance to
rice and corn farmers, and establishing
partnerships with the private sector.
Arroyo Administration (2001-2010):
• The Arroyo administration expanded the NFA's
role to include developing the rice and corn
industries, providing support to farmers,
encouraging hybrid rice and other high-yield
crops, and improving the quality of local rice
and corn. It also provided food assistance to
vulnerable groups during times of crisis.
Benigno Aquino III Administration
(2010-2016):
• The NFA implemented reforms to streamline
procurement and distribution processes and
reduce operational costs, and developed a rice
subsidy program for low-income families to
ensure access to affordable rice.
 Duterte Administration (2016-
present):
• The NFA's role under the Duterte administration is to
ensure food security and promote the development
of the rice and corn industries. It has implemented
reforms to improve efficiency, launched programs to
support rice farmers, and implemented the Rice
Tariffication Law, which liberalizes rice importation
while providing support to local farmers.
NFA Council Organization Structure
 PERFORMANCE REVIEW
MAJOR MANAGEMENT ISSUES
• Issues and Problems encountered by National Food
Authority in the Philippines"
1. Corruption
2. Mismanagement
3. Inefficiency
4. Lack of transparency
5. Lack of modernization
6. Inadequate budget
 "List of actions for problems resolution of
National Food Authority in the Philippines"
1. Strengthen Anti-Corruption Measures
2. Improve Management and Efficiency
3. Increase Transparency
4. Increase Budget
5. Enhance Rice Importation Policies
6. Strengthen Partnership with Farmers
7. Strengthen Disaster Response Capacity
INTERNAL AND EXTERNAL MANAGEMENT
ON FINANCIAL AND PERSONNEL
GOVERNANCE OF GOCCS

Financial Supports to GOCCs

Subsidy:
2016: 4,250,000,000
2017: 6,882,089,400
2018: 12,785,154,971
2019: 12,980,800,251
2020: 36,250,000,000
 Equity
2016: 5,000,000,329

2017: 151,769,790,509

2018: 153,363,902,823

2019: 157,718,095,187

2020: 135,006,365,594
 Net Lending

2016: 2.329 billion

2017: 5.400 billion

2018: 6.551 billion

2019: 25.196 billion

2020: 22.037 billion

 Statement of Assets, Liabilities, and Net worth
(SALN)/Financial Statement

SALN  2016 2017 2018 2019 2020

         
Assets 30,984,124,564 313,857,643,785 313,857,643,785 86,238,195,373 73,811,157,990

           
Liabilities 30,984,124,564 462,221,546,279 462,221,546,279 238,956,290,231 203,817,523,254

           
Net worth 141,240,584,186 148,363,902,494 148,363,902,494 152,718,094,858 130,006,365,264
 Financial Returns from GOCCs
NET INCOME
  2016 2017 2018 2019 2020
Revenue          
Service and business income 29,238,467,957 17,809,516,177 18,117,173,119 18,345,178,197 14,579,598,043
Share, grants and donations 34,176 375,308 43,548 37,878 2,277
Miscellaneous income 73,270,032 121,622,991 105,617,260 67,380,958 120,080,862
  29,311,772,165 17,931,514,476 18,222,833,927 18,412,597,033 14,699,681,182
 
         
Current operating expenses
Personnel services 2,010,961,217 2,195,736,109 2,402,055,563 2,741,564,887 3,866,120,446
Maintenance and other operating
2,022,563,364 1,738,427,552 1,479,667,695 1,745,142,242 2,049,271,405
expenses
Financial expenses 5,906,902,690 5,962,357,592 6,366,230,096 7,136,472,965 3,797,107,979
Direct costs 32,107,973,327 19,385,764,047 20,171,062,391 23,120,725,158 19,578,780,534
Non-cash expenses 183,581,211 189,237,810 177,158,471 186,986,747 846,392,519
  42,231,981,809 29,471,523,110 30,596,174,216 34,930,891,999 30,137,672,883
 
         
Surplus/(deficit) from current
(12,920,209,644) (11,540,008,634) (12,373,340,289) (16,518,294,966) (15,437,991,701)
operations
           
Gains 1,435,218,090 97,718,532 160,810,053 206,651,128 265,803
Losses (204,494,462) (81,205,280) (187,267,540) (102,347,625) 756,415
Financial assistance/subsidy 10,646,651,890 6,882,089,400 12,785,154,971 12,980,800,251 (7,981,631)
           
Net surplus/(deficit) for the period (1,042,864,126) (4,646,405,982) 385,357,195 (3,433,191,212) 20,805,048,886
 DIVIDEND
  2016 2017 2018 2019 2020
           
Balance at January (143,754,578,352) (141,242,454,104) (148,551,879,577) (148,363,902,494) (149,915,435,969)
 
         
Changes in net assets/equity
Add/(Deduct):          
Surplus/(Deficit) for the period (1,042,834,126) (6,428,495,382) 385,357,195 (3,433,191,212) -

Prior period errors 3,432,319,297 5,614,225,614 (21,780,174,349) (6,115,014,203) 21,185,784,225

Other adjustments 122,639,077 (6,495,155,705) 21,582,794,237 5,194,013,051 (4,562,295,111)

           
Balance at December (141,242,454,104) (148,551,879,577) (148,363,902,494) (152,718,094,858) (130,617,388,735)
 
         
Changes in net assets/equity
Add/(Deduct):          
Surplus/(Deficit) for the period (4,646,405,982) 385,357,195 (3,433,191,212) 20,805,048,887 -

Prior period errors (147,965,375,448) (21,780,174,349) (6,115,014,203) 5,792,835,862 4,864,428,510

Other adjustments 147,084,445,357 21,582,794,237 5,194,013,051 (3,886,155,156) 1,577,552,265

           
Balance at December next CY (146,769,790,177) (148,363,902,494) (152,718,094,858) (130,006,365,265) (124,175,407,960)
EVELOPMENT AND ACCOUNTABILITY/GOVERNANCE REFORMS

Performance Evaluation System and Corporate Governance Scorecard

2015 - 2016
2017
2018
2019
2020
 Integrated Corporate Reporting System

• The ICRS is a web-based platform designed to

provide relevant information on GOCCs to
GCG, agencies, the media, and the public, in
accordance with the "GOCC Governance Act
of 2011".
ICRS is a web-based platform that is intended to:

a.) Assist the State in the exercise of its ownership

rights in the GOCC Sector through the provision of up-
to-date, complete and relevant information;
b.) Streamline the various reportorial requirements for
GOCCs; and
c.) Promote greater transparency and timely access to
relevant information on the GOCC Sector through a
single online web portal.
 Compensation and Position Classification System
• The CPCS Study was carried out through a series of consultant-
facilitated and participative approaches to develop the following:
• A reward strategy that is aligned with provisions set forth in R.A. No.
10149, taking into consideration other pertinent laws and regulations
relevant to pay principles adopted in the CPCS;
• A position classification system for all officers and employees of
GOCCs to ensure that a common yardstick is used in measuring
internal equity and value of roles relevant to organization size;
• Base pay structures that are comparable with private sector pay but
are not far- off from National Government pay, taking into
consideration GOCCs' financial capacity and sustainability:
• A variable pay mechanism to manage fixed cost, and to drive GOCCS
to deliver expected levels of performance; and
• A CPCS system that is easy to understand and implement for both
GCG and the GOCCS.
Board of Directors – Trustees - Officers

POSITION NAME

Chairperson/DA Secretary President Ferdinand Marcos Jr.

Acting Administrator Roderico R. Bioco

BSP Governor Felipe M. Medalla

DSWD Secretary Rexlon T. Gatchalian

DOF Secretary Benjamin E. Diokno

DTI Secretary Alfredo E. Pascual

LANDBANK PRESIDENT Cecilia C. Borromeo

OP Representative Ricardo P. Bernabe

NEDA Director General Arsenio M. Balicsacan

Farmer’s Sector Representative Vacant

 Transparency
• a) Transparency in the procurement process and in the
implementation of procurement contracts through wide
dissemination of bid opportunities and participation of
pertinent non-government organizations.
• b) Competitiveness by extending equal opportunity to
enable private contracting parties who are eligible and
qualified to participate in public bidding.
• c) Streamlined procurement process that will uniformly
apply to all government procurement. The procurement
process shall be simple and made adaptable to advances in
modern technology in order to ensure an effective and
efficient method.
• d) System of accountability where both the public officials
directly or indirectly involved in the procurement process as
well as in the implementation of procurement contracts and
the private parties that deal with government are, when
warranted by circumstances, investigated and held liable for
their actions relative thereto.
• e) Public monitoring of the procurement process and the
implementation of awarded contracts with the end in view of
guaranteeing that these contracts are awarded pursuant to
the provisions of the Act and this IRR-A, and that all these
contracts are performed strictly according to specifications.
 Accountability
• The National Food Authority (NFA) is a government agency
mandated to stabilize the supply and price of grains, particularly rice
and corn, and maintain stocks as buffer for food security purposes.
Warehouse men or stock accountable officers are accountable for the
stocks they handle in their assigned warehouses. Tolerable allowance
(TOLA) computation is the process of determining losses due to
natural causes such as moisture content variation, insect infestation,
rodent infestation, and bird infestation. The TOLA Committee (TAC)
and Field Offices and COA addressed this problem by designing a
computerized system which integrated the conduct of stock
examination and TOLA computation, and decentralized in the field
offices to facilitate and speed up the process.
SUMMARY OF DATA AND INFORMATION GATHERED
• The National Grains Authority (NGA) was created under Presidential
Decree (PD) No. 4 dated September 26, 1972, with the mandate of
promoting the integrated growth and development of the grains industry.
On January 14, 1981, PD No. 1770 reconstituted the NGA into the
National Food Authority (NFA). Executive Order (EO) No. 1028 was
issued to deregulate NFA’s non-grains marketing activities, leading to the
termination of NFA’s non-grains trading activities and the return of feed
grains and wheat importation to the private sector. On May 5, 2014, the
NFA, together with the National Irrigation Administration, Philippine
Coconut Authority (PCA), and Fertilizer and Pesticide Authority (FPA),
were transferred from DA to the Office of the Cabinet Secretary of the OP.
On June 30, 2016, NFA was reassigned to the Office of the Cabinet
Secretary of the OP.
• The National Food Authority (NFA) is responsible for collecting and
managing data and information related to the country's food supply and
distribution. It has 22 organizational units in the Central Office, 15
Regional Offices, and 45 Branch Offices nationwide with corresponding
2,644 plantilla positions. Food security management is not limited to
ensuring the steady availability of supply of staple food within the
country, but also ensures that all sectors of society have access to the
available supply, including the poor and vulnerable groups. The NFA is
the main repository of food-related data in the country, and its main
functions include setting food safety standards, conducting inspections
and investigations, and enforcing regulations. It also works to promote
food security and provide information and education to the public on
healthy eating habits. The NFA's goal is to ensure a stable and sufficient
food supply in the country.
CONCLUSION ON THE GOCC PERFORMANCE
• The National Food Authority (NFA) is responsible for ensuring the
country's food security by managing the food supply and distribution
system. It has been successful in stabilizing food prices and ensuring
sufficient food supply, but has faced criticism for its inefficiencies and
corruption. The government has investigated the idea of reorganizing,
simplifying, or privatizing specific NFA activities in response to
globalization and efforts to lower the national budget deficit. The NFA
carries out these duties using a variety of techniques, such as buying
paddy from individual farmers and their organizations, buffer stocking,
processing, dispersing paddy and milled rice to key locations, and
distributing the staple grain to different marketing outlets at the right
times of the year. However, there is still room for improvement in terms
of efficiency and transparency in its operations.
 RECOMMENDATIONS ON THE GOCC
PERFORMANCE
• The National Food Authority (NFA) must implement a more effective
procurement procedure to ensure the timely acquisition of sufficient rice
supplies to meet the needs of Filipinos. It must also improve buffer stock
management to prevent supply shortages and unexpected price rises. It must
also improve farmer support programs to promote the production of high-
quality rice, strengthen public-private partnerships, and enhance transparency
and accountability. These measures will help ensure a consistent supply of
inexpensive and high-quality rice for Filipinos, and build trust and confidence
among stakeholders.
• The National Food Authority (NFA) should regularly report on its activities and
performance, establish clear metrics and targets to measure its effectiveness,
engage with farmers, traders, and consumers to understand their needs and
concerns, review policies and regulations to ensure they are responsive to the
changing needs and challenges of the agriculture sector, and collaborate with
other governmental organizations, business stakeholders, and academic
specialists to create evidence-based regulations that support the agriculture
industry's inclusive and sustainable growth.
• The SDGs are a set of 17 global goals adopted by the
United Nations in 2015, aimed at achieving a sustainable
future for all by 2030. To achieve SDG 2, national food
authorities need to focus on improving agricultural
productivity and sustainability, promoting responsible
food consumption and production, strengthening food
systems, increasing access to nutritious food, and
ensuring food safety and hygiene. Each country's
progress towards achieving its national food authority
agenda will contribute to the overall success of the SDGs.