G/STR/Q1/PHL/3  
 
16 October 2018  
(18-6415) Page: 1/2 
Working Party on State Trading Enterprises  Original: English  
 
  
STATE TRADING  
REPLIES TO QUESTION S1 FROM THE EUROPEAN U NION  
REGARDING THE PHILIP PINES'S NEW AND FULL  NOTIFICATION2 
The following communication, dated 15 October 2018, is being circulated at the request of the 
Delegation of the Philippines . 
 
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Question 1  
 
Is the National Food Authority (NFA) notified by the Philippines as an STE related to rice 
tariffication? Could the Philippines please provide updates concerning this issue?  
 
Reply : 
 
Yes. The Rice "Tariffication" legislation is still currently being deliberated in the Philippine Congress 
particularly in the House of Senate, and the legislation has been a priority of the Executive Branch 
of the Philippine Government.  
 
Question 2  
 
How does the NFA ensure "reasonable" price levels  for rice?  
 
Reply : 
 
The NFA mandate 's goal is to ensure reasonable price levels for rice through local procurement of 
paddy in the domestic market especially in areas where farm gate prices are significantly below its 
buying price of PHP17/kg -- the calcul ated price determined having a fair return on farmer 's 
investment a decade ago (2009).  However, given the historically low domestic procurement – about 
less than 2% of the annual domestic production in the last 15 years -- and the buying price has not 
been adjusted upward to factor in the cost -push inflation episodes that have built up over the years, 
the benefits of the NFA procurement to all farmers in the Philippines should have been limited in 
scope and scale.  The paddy procurement is being conducted ye ar-round to build -up buffer stocks 
for food security purposes.   
 
At times of high farm gate prices, NFA mainly imports  rice – apart from the ones conducted by the 
private sector – to ensure availability of rice in sufficient quantity for its buffer stockin g and 
marketing activities.  
 
Aside from the above, NFA also provides support to consumers by selling its milled paddy (rice) and 
imported rice at prices that are  lower than the prevailing retail prices especially in communities with 
low-income families and where poverty is high to ensuring access to affordable rice.  
                                                
1 G/STR/Q1/PHL/2.  
2 G/STR/N/8/PHL -G/STR/N/9/PHL -G/STR/N/10/PHL -G/STR/N/11/PHL -G/STR/N/12/PHL -
G/STR/N/13/PHL -G/STR/N/14/PHL -G/STR/N/15/PHL -G/STR/N/16/PHL and G/STR/N/8/PHL/Rev.1, 
G/STR/N/9/PHL/Rev.1 -G/STR/N/10/PHL/Rev.1 -G/STR/N/11/PHL/Rev.1 -G/STR/N/12/PHL/Rev.1 -
G/STR/N/13/PHL /Rev.1 -G/STR/N/14/PHL/Rev.1 -G/STR/N/15/PHL/Rev.1 -G/STR/N/16/PHL/Rev.1.  G/STR/Q1/PHL/3  
 
- 2 - 
 
  Question 3  
 
The notification indicates that, besides rice and corn, the NFA  is also engaged in trade of 
"other commodities". Which are the commodities concerned? How is the implementation 
of the Nairobi decision ensured?  
 
Reply : 
 
The NFA's non -grains marketing activities has been regulated resulting in the termination of the 
NFA's non -grains trading activities. NFA mainly focuses its intervention on rice and on a very limited 
scale for corn.  
 
Since NFA did not procure other commodities, other than rice and corn, from the domestic market 
over the last two decades or so, the WTO De cisions on Public Stockholding in 2013 -2015 do not 
apply. It will also be noted that public stockholding programmes conducted at market prices and in 
accordance with the requirements under paragraphs 3 and 4 of Annex B of the Agreement on 
Agriculture is pe rmitted in unlimited scale and scope.  
 
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