G/STR/N/19/PHL  
 
5 September 2023 
(23-5948) Page: 1/6 
Working Party on State Trading Enterprises  Original: English  
 
  
STATE TRADING  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVII OF THE  
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON  
THE INTERPRETATION OF ARTICLE XVII  
PHILIPPINES  
The following communication, dated and received on 5 September 2023, is being circulated at the 
request of the delegation of the Philippines.  
 
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Pursuant to Article XVII:4(a) of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and 
paragraph 1 of the Understanding on the Interpretation of Article XVII of the GATT 1994, and in 
response to the call for notifications contained in document G/ STR/N/19, the Philippines makes the 
following notification for the years  2020 and 2021.  
 
I. ENUMERATION OF STATE -TRADING  ENTERPRISES  
 
A. Identification of state trading  enterprises  
 
National Food Authority (NFA)  
 
B. Description of products  
 
1. Rice (HS No. 1006.10 and  1006.30)  
 
2. Corn (HS No. 1005.90)  
 
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING STATE -TRADING 
ENTERPRISES  
 
A. Reason/Purpose  
 
The purpose of NFA  as the State Trading Enterprise (STE) is to ensure the food security of 
the country by managing and maintaining a national buffer stock of rice and corn to be 
sourced solely from local rice farmers.  
B. Legal  Authority  
 
1. Republic Act (R.A) 11203, otherwise kno wn as "An Act Liberalizing the Importation, 
Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import 
Restriction on Rice, and For Other Purposes ".  
 
2. Presidential Decree (PD) No. 4 of 1972, as amended.  
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  III. DESCRIPTION OF THE FUNCTIONING OF THE STATE -TRADING  ENTERPRISES  
 
A. Summary statement providing overview of operations of the state trading  enterprise  
 
• Maintain and manage a national buffer, the quantity and locations of which shall be 
determined by NFA.  
• Acquiring an optimal le vel of sufficiency of rice by purchasing rice paddy from local 
farmers.  
• Engage with the Department of Social Welfare and Development (DSWD) and Local 
Government Units (LGUs) in the distribution of buffer, in support of the disaster relief 
and food distribu tion programs of the government and dispose of stocks as necessary, 
before the quality of rice deteriorates or becomes unsafe for human consumption . 
 
B. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise  
 
• PD No. 04 of 1972 authorized NFA to maintain and manage a national buffer stock for 
rice and corn. This involves undertaking and assuming primary responsibility for all 
government activities relating to processing, storage, transport and marketing. It also  
includes determination of buying price, procurement and control of required quantities, 
and locations to manage the government buffer stocks.  
• The enactment of RA 11203 limited NFA's power to buffer stocking on rice, but 
maintained its trading and regulat ory power on corn.  
• It further authorized NFA to undertake  domestic procurement of rice paddy from local 
farmers at prices determined by NFA  in maintaining the optimal level of rice buffer 
stock of 300,000 MT at the national level.  
• It also empowered the NFA  to distribute rice, in coordination with relevant government 
agencies involved in disaster relief operations and food distribution programs, for food 
security purposes. This authority includes disposing stocks, as necessary before the 
quality of rice dete riorates or becomes unsafe for human consumption.  
• In maintaining its operation, NFA 's corporate receipts shall be supplemented by the 
national government, including but not limited to the General Appropriations Act (GAA).  
• Certain pre -existing rights or privileges specified in PD No. 04, as amended have been 
removed. Specifically, upon effe ctivity on 05 March 2019, RA 11203 removed NFA 's 
authority to import and export rice.  
 
C. Types of entities other than the state trading enterprise that are allowed to engage in 
importation/exportation and conditions for  participation  
 
With the removal of NFA 's authority to import and export rice, the government now opens 
to any interested accredited entity to engage in the importation, exportation, and trading 
of rice, and play a greater role in boosting the domestic supply of this product.  
Under Article VI S ection 4 of the Implementing Rules and Regulations (IRR) of RA  11203, 
all accredited importers are required to secure a Sanitary and Phytosanitary Import 
Clearance (SPSIC) from the Bureau of Plant Industry (BPI) prior to importation in 
accordance with exis ting laws, rules and regulations.  
 
D. How import /export levels are established by the state trading  enterprise  
 
Not applicable under RA 11203 . 
E. How export prices are  determined  
 
Not applicable under RA 11203 . 
F. How the resale prices of imported products are  determined  
 
Not applicable under RA 11203 . 
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  G. Whether the state trading enterprise is used to fulfill contractual obligations entered 
into by the  government  
 
No longer part of NFA's mandate under R A 11203 . 
H. Brief description of market  structure  
 
The private sector that comprise the marketing players are paddy producers/farmers, 
millers, wholesalers, importers and retailers who are the major players in the grains industry. 
A free interplay of the market forces/participants in the domestic rice industry  now prevails 
in the local market with only lesser interventions from the national government.  
The NFA intervenes only through the maintenance of a national rice buffer stock, strategically 
positioned nationwide to be used in times of emergency/calamity si tuations and to sustain 
the disaster relief programs of the government during calamities, whether natural and/or 
man-made.  
IV. STATISTICAL  INFORMATION  
Please refer to attached Tables I -III. 
V. REASON WHY NO FOREIGN TRADE HAS TAKEN  PLACE  
The Philippines did not en gage in the export of rice and corn because there was no surplus from 
the domestic production of both products.  
   
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TABLE I  
STATE TRADING: NATIONAL FOOD AUTHORITY  
STATISTICAL INFORMATION, IMPORTS  
(In Metric Tons)  
Product/ Year  Description of product (s)  
including HS number (s)  Total 
quantity  
imported  Quantity imported by  
state trading enterprise  Average 
import  price 
(PHP/kg)  Average representative  
domestic sales price 
(PHP/kg)  National production  
(calendar year) 
1 2 3 4 5 6 7 
Rice* 1006.10 Rice paddy/ 
1006.30 Semi -milled or 
wholly milled rice, whether 
or not polished or glazed   
2020 2,112,232  None None 43.69  19,294,856  
2021 2,856,014  None None 43.36  19,960,170  
Corn  1005.90  Maize (corn), other 
than seed   
2020 748,353  None None 24.94  8,118,546  
2021 440,600  None None 25.54  8,300,322  
*Columns 3 and 4 are in rice term s while column 7 is in palay term . 
Column 6 represents the national average prevailing domestic retail price of commercial rice/corn sold in the local market mo nitored by the Philippine Statistics Authority . 
Column s 3 and 7 are sourced from the Philippine S tatistics Authority . 
    
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TABLE I I 
STATE TRADING: NATIONAL FOOD AUTHORITY  
STATISTICAL INFORMATION, EXPORTS  
(In Metric Tons)  
Product/ Year  Description of product (s)  
including HS number (s)  Total 
quantity  
exported  Quantity exported by  
state trading enterprise  Average 
export price 
(PHP/kg)  Average representative  
domestic sales price 
(PHP/kg)  National production  
(calendar year) 
1 2 3 4 5 6 7 
Rice 1006.10 Rice paddy/ 
1006.30 Semi -milled or 
wholly milled rice, 
whether or not polished or 
glazed   
2020 None None None 43.69  19,294,856  
2021 None None None 43.36  19,960,170  
Corn  1005.90  Maize (corn), 
other than seed   
2020 None None None 24.94  8,118,546  
2021 None None None 25.54  8,300,322  
Column 6 represents the national average prevailing domestic retail price of commercial rice/corn sold in the local market monitored by the Philippin e Statistics Authority (PSA).  
Column 7 sourced from Philippine Statistics Authority .    
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TABLE I II 
STATE TRADING: NATIONAL FOOD AUTHORITY  
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES  
(In Metric Tons)  
Product/ Year  Description of product (s)  
including HS number (s)  Domestic purchases by 
state trading enterprise  National 
production  Domestic sales by state 
trading enterprises  National consumption  
1 2 3 4 5 6 
Rice* 1006.10 Rice paddy/  
1006.30 Semi -milled or wholly 
milled rice, whether or not 
polished or glazed   
2020 683,132 19,294,856  590,654 13,624,000 
2021 460,482 19,960,170  414,673 14,887,000 
Corn  1005.90  Maize (corn), other 
than seed   
2020 None 8,118,546  None 2,372,000 
2021 None 8,300,322  None 2,153,000 
*Columns 5 and 6 are in rice terms while columns 3 and 4 are in palay terms.  
Production and National Consumption data sourced from Philippine Statistics Authority (PSA).  
 
 
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