Philippine Center for Postharvest Development and Mechanization (PHilMech) is hurrying to finish the auction for P10-billion worth of farm equipment by the end of this year in fear of falling short anew in spending its annual Rice Competitiveness Enhancement Fund (RCEF) allocation.
PHilMech Executive Director Baldwin Jallorina Jr. said in a virtual media briefing that the agency is now in the process of distributing P2 billion worth of farm equipment under RCEF, while the auction and awarding is still on-going for another P5.5 billion worth of machineries.
But because the agency actually has P10-billion worth of RCEF money to spend this year, Jallorina hopes to be able to bid out another P2.5 billion worth of farm machinery before the year ends.
One of the requirements of Rice Tariffication Law (RTL), which allowed unlimited rice importation in the country, is for the government to help Filipino rice farmers become competitive by giving them access to free seeds and modern farm equipment to be funded by RCEF, the collection of tariffs from rice imports.
RCEF is supposed to be injected with P10 billion annually from 2019 to 2024. Of this, only P5 billion is allotted to mechanization but because PhilMech wasn’t able to spend its last year’s RCEF allocation, PhilMech has now P10 billion to spend this year.
“PhilMech plans to conduct in the third quarter the pre-bidding and award of contracts for another P2.5 billion worth of farm machineries scheduled to be distributed early next year,” Jallorina told reporters.
“If we can at least award the contracts so we don’t have to return the money the better,” he added.
Jallorina may be referring to the provision of General Appropriations Act (GAA) where unspent funds should be returned to the government’s “General Fund” towards the end of the year.
However, the implementing rules and regulations (IRR) of RTL specified that the utilized RCEF money, not like a regular budget allocation, shall not revert to the General Fund but shall continue to be used for the purpose for which it was set aside.
Meanwhile, Jallorina said Philmech targets to finish the distribution of the P7.5 billion worth of machineries under the first and second batch of bidding the agency conducted and is currently conducting all by the end of this year.
So far, the agency has already distributed 512 pieces of farm machines in six regions. The type of farm machines distributed so far are four-wheel tractors, hand tractors, floating Tillers, precision seeders, walk behind transplanter, reaper, and combine harvester.
Philmech Director for Applied Communications Division Aldrin Badua said all the companies that participated in the bidding are local companies but a lot of them will just be importing these machineries.
“A lot of the machinery that will be supplied to us are locally manufactured such as the tractors, floating tillers, rice miller, mechanical driers,” Badua said.
“There are also imported ones which will come from Thailand, India, and China, but we can assure you that these are good quality,” he added.
When asked how PhilMech is adjusting when it comes to the significant increase in its annual budget, Jallorina said PhilMech had no problem absorbing billions of RCEF money
“We don’t have a problem in terms of absorptive capacity. Now that we are handling billions, our capacity is still enough,” Jallorina said, adding that the Department of Budget and Management (DBM) approved the earlier request of the agency to hire additional 59 personnel.
In March last year, PHilMech Deputy Director Raul Paz said while his agency is the most appropriate agency to handle the farm mechanization program of the government it is also a “very small agency” that is not prepared to handle billions of funds.
He said at that time that PhilMech only receives an average annual funding of around P200 million to P300 million.
According to him, PhilMech needs to hire more people, get more vehicles for effective transportation, and expand its procurement unit before it can effectively utilize its P5-billion annual RCEF allocation.