NIA seeks Congress’ restoration of P90B budget slashed by DBM

September 21, 2023 Ryan Ponce Pacpaco 175 views

THE National Irrigation Administration (NIA) has appealed to the House of Representatives to restore P91 billion in capital outlay slashed by the Department of Budget and Management in the 2024 national expenditure program, saying the substantial reduction will stall projects intended to significantly increase rice production and ensure food security.

Under the proposed national expenditure plan, the DBM set a budget of P41.2 billion for NIA, whose original proposal during the government’s budget call was a ceiling of P132.4 billion.

In a letter to House Speaker Ferdinand Martin G. Romualdez and Appropriations Committee Chair Elizaldy Co, NIA acting Administrator Engr. Eduardo Guillen said his recommended annual allocation of P200 billion for irrigation aims to shorten full coverage to 10 years from 80 years to quickly address problems in food security, agricultural productivity and job creation. Only 66% of agricultural land in the Philippines are covered by irrigation that constantly needs maintenance to function efficiently.

Guillen said the budget proposal also includes immediate measures to cope with an impending El Nino that could severely affect farm production due to water and irrigation shortage.

“We firmly believe that our original budget ceiling request aligns with these factors and would allow us to fulfill our mission better and serve the interest of the Filipino people,” Guillen said in his letter.

NIA has noted the significant increase in yield of irrigated farms. In Nueva Ecija, where the Pantabangan dam supplies water to thousands of hectares of rice lands, farmers can crop 2.5 times a year with an average yield of 7 tons a hectare. The national average rice production is around 4 tons a hectare.

In areas without irrigation, where farmers rely on rainfall, farmers could only plant and harvest rice once a year.

“This is not ideal, considering the urgent need to address food security and uplift the livelihoods of our farmers. To expedite the progress and substantially contribute to accelerated and inclusive economic growth, I strongly recommended a dramatic increase in funding for irrigation infrastructure,” Guillen said.

With insufficient domestic production, the Philippines has relied on importation to fill the gap in rice supply, making the country susceptible to adverse events in major rice exporters, unscrupulous rice traders as well as smugglers.

A decision by India, the world’s biggest rice exporter, to suspend export on non-basmati rice varieties has pushed rice prices significantly higher. This forced President Ferdinand Marcos Jr. to impose a price ceiling on regular- and well-milled rice to tame inflation and buy time to go after rice smugglers and hoarders.

Rice has a heavy weight in the consumer price basket used to determine inflation that is closely-watched by the Bangko Sentral ng Pilipinas to set interest rates. The BSP has raised interest rates aggressively since May last year to slow inflation, and has tripled its overnight rates to 6.25 percent from 2.00 percent to do so.

Higher interest rates makes funding for business costlier and credit card, home mortgages and car loans more expensive to pay, hurting the economy and stalling job creation.