DBM called to release billions of ACEF funds to farmers

Published July 13, 2020, 10:00 PM

by Madelaine B. Miraflor

Billions of funds under the Agricultural Competitiveness Enhancement Fund (ACEF) are said to have been idling at the Department of Budget and Management (DBM) and farmers, the fund’s supposed beneficiaries, are looking for it. 

In separate statements, the Agricultural Sector Alliance of the Philippines (ASAP) and Federation of Free Farmers (FFF) both called the Philippine government to release whatever is left of the ACEF funds to address the urgent needs of farmers for credit.  

Based on FFF’s estimate, ACEF, tariff collections on imports of certain agricultural products, had a fund balance of P5.15 billion as of May 2018, of which the allocation for credit amounted to P4.12 billion.

Of that, DBM released P1.28 billion for Land Bank of the Philippines’ (LANDBANK) credit program in 2018 and remitted a second tranche of P1.44 billion early this year, leaving a balance of P1.4 billion. 

The available fund balance could be significantly higher since additional tariff collections since May 2018 have not yet been taken into account, FFF noted.

Under the Agricultural Tariffication Act of 1996 or Republic Act (RA) 8178, ACEF is placed in a Special Account under the National Treasury and should be used to enhance the competitiveness of local producers affected by trade liberalization when the country joined the World Trade Organization in 1995. 

RA 10848 provided that 80 percent of the ACEF fund balance would be allocated to LANDBANK for credit support to farmers and small and medium-scale agricultural enterprises, while the rest would be appropriated for technology commercialization and scholarships.

Nicanor Briones, president of ASAP and the vice president for Luzon Pork Producers Federation of the Philippines, recently made a direct appeal to President Rodrigo Duterte to address the over-importation of pork, poultry, vegetables, and fisheries products in the country.

He also called on the national government to make sure that the tariff collected under ACEF, not just Rice Competitiveness Enhancement Fund (RCEF), will be received by the farmers.

Right now, the Department of Agriculture (DA) is preoccupied with the distribution of RCEF, which is where all the tariff from rice imports should go and is supposed to be injected with ₱10 billion annually from 2019 to 2024.

FFF pointed out that farmers are now complaining that after DA and LANDBANK encouraged them to apply for loans, they were now told that no more funds are available and that DBM has yet to release the remaining ACEF funds despite repeated and urgent requests.

Raul Montemayor, FFF National Manager, argued that there should be no delay in the release since the funds have been in the Special Account since 2018.

“While we understand that DBM should release the ACEF in tranches based on actual demand and usage, it should not withhold funds when the releases have already been exhausted and there are still pending loan proposals,” Montemayor said. 

“Based on our rough estimates, only half of the rightful amount, or only about P700 million, is being added to the ACEF every year.  We do not know where the other half went,” Montemayor further said.
Montemayor noted that RA 10848 contained a key provision that stated that “fund releases shall not be subject to any ceiling by the Department of Budget and Management (DBM).”

He also said that the National Treasury may be charged with fund diversion if it has used the ACEF for unauthorized purposes.

Affected farmers could also file a complaint against the DBM for unreasonably delaying the release of ACEF funds in violation of RA 10848.

The DA is now urged to exercise due diligence in ensuring that the proper tariff collections are fully credited to the ACEF Special Account and are made readily accessible to qualified beneficiaries.