G/STR/N/17/PHL  
G/STR/N/18/PHL  
 
16 December 2020  
(20-9109) Page: 1/9 
Working Party on State Trading Enterprises  Original: English  
 
 
STATE TRADING  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVII:4(A) OF THE  
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON  
THE INTERPRETATION OF ARTICLE XVII  
PHILIPPINES  
The f ollowing communication, dated 25 November  2020, is being circulated at the request of the 
delegation of the Philippines.  
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Pursuant to Article XVII:4(a) of the 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 s G/STR/N/17  and G/STR/N/18 , the Philippines  makes the following notification for the 
years 201 6-2019. 
I. ENUMERATI ON OF STATE -TRADING ENTERPRISES  
A. Identificati on of state trading enterprises  
National Food Authority (NFA)  
B. Description of products: The NFA is engaged in the trade of the following 
commodities:  
1. Rice (H.S. No. 1006.10 and 1006.30) ; 
2. Corn (H.S. No. 1005.90) ; 
3. Other commodities as authorized by the President of the Philippines . 
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING STATE -TRADING 
ENTERPRISES  
A. Reason/Purpose  
As the trading arm of the government, NFA is tasked to ensure the following:  
1. Food security – The NFA ensures food security in staple cereals in times and places of 
emergency, both natural or man -made. Specifically , NFA responds within  48 hours to 
the requirements of calamity/emergency stricken areas. Also, it should restore or 
maintain within two weeks the commodities ' supply and prices at levels immediately 
prior to the calamity/emergency.  
2. Stabilization – The NFA ensures farmgate p rice levels that enable farmers to derive 
reasonable returns on their production investment on the one hand, and ensur e 
reasonable retail prices for consumers on the other.  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 2 - 
 
  B. Legal Author ity: 
1. National Grains Authority (NGA) Act of 1972 (Presidential De cree No. 4), as amended, 
which created the NFA (then NGA) to promote the integrated growth and development 
of the grains industry and accorded the exclusive authority on the importation and 
exportation of rice, corn and other grains . 
2. Agricultural Tariff ication Act of 1996 (Republic Act No. 8178), which lifted the 
quantitative import restriction on corn, liberalized corn importation and reiterated the 
NFA's exclusive authority to import rice while restoring its prerogative to allocate import 
quotas of ric e to local importers in cases of production shortfalls.  
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE -TRADING ENTERPRISES  
A. Summary statement providing overview of operations of the state trading enterprise  
The NFA's mandates are currently anchored to a direct market intervention strategy that revolves 
around the maintenance of a year -round 15 -day rice buffer stock which is to increase to a 30 -day 
stock level during the lean season of each year. Under this st rategy, the NFA is allowed to engage 
in domestic grain procurement from individual and organized small farmers at government support 
prices. The strategy banks on the price -pull effect of its marketing operation and is oriented on a 
support or release pric e structure that is sustained by subsidy infusion from the government to 
finance the cost of stabilization. Alternatively, the NFA may undertake rice importation.  
B. Specification of exclusive or special rights or privileges enjoyed b y the state trading 
enterprise  
The NFA has the exclusive authority to import rice. It also has the authority to issue import quotas 
and import permits for rice, corn and other cereals.  
C. Types of entities other than the state trading enterprise that are allowed to engage in 
importation/exportation and conditions for participation  
The private sector, registered and licensed with the NFA, is given limited participation in the 
importation of rice (i.e. limited volume and importation of premium, fancy and glutinous varieties 
only). Those who have availed of this privilege were rice millers and traders.  
D. How import /export levels are established b y the state trading enterprise  
Determination of  import quantity is the function of an Inter -Agency Committee on Rice and Corn led 
by Department of Agriculture (DA), with the NFA as a member. The Committee regularly conducts 
an evaluation of the country's Rice Supply/Demand Situation and Outlook on a cr op year basis. 
During the evaluation process, the Committee determines the volume/deficit the country will have 
by the end of the crop year, for approval by the President of the Philippines.  
It is also governed by commitments to Annex 5 of the Agricultural  Agreement.  
Import price is determined through negotiations between the NFA and the source of importation, 
taking into consideration prevailing world market prices.  
E. How export prices are determined  
Rice exportation is carried out only in times of surplu s or excess supply. The last time that the 
Philippines exported rice was in 1987 when it shipped out 111,000 MT as partial payment of the 
country's rice loan with Indonesia. Since then, government, through the NFA has not engaged in 
exports. In case of pri vate exports, prices are generally based on the world market prices.  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
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  F. How the resale prices of imported products are determined  
The NFA considers the following parameters in determining the selling price of the rice it imports – 
procurement, unloading, d ispersal, handling and distribution costs, tariff rate and equalization fee.  
G. Whether the state trading enterprise is used to fulfill contractual obligations entered 
into by the government  
Negotiations entered into by  the NFA depend on who is availi ng of the imported rice stocks.  
H. Brief description of market structure  
The private sector is the major player in the grains industry. The NFA intervenes only through set 
standards, rules and policies. It likewise monitors adherence to the regulations implemen ted. 
During the lean months of July, August and September, the NFA sells directly to end consumers or 
through its various accredited retailers/outlets at government -set release prices. At the onset of the 
main crop harvest months, the NFA buys palay at a g iven support price purposely to give farmers 
reasonable returns and to pull farm prices up.  
IV. STATISTICAL INFORMATION  
Please refer to attached Tables I -III. 
V. REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE  
The NFA did not engage in the export of rice and corn because of the shortage of domestic supply 
of both products . 
 
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  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 4 - 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 (P/kg) Average 
representative 
domestic sales price 
(P/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       
2016 681,249.00  597,553.15  20.36  43.80  17,627,245.00  
2017 916,528.95  249,900.00  21.09  37.49  19,276,347.00  
2018 1,536,061.60  706,848.55  25.02  40.75  19,066,093.00  
2019 2,768,196.94  538,099.00  25.02  38.67  18,814,827.00  
* Column 3 is in rice term s while column 7 is in palay term s. 
** Column 6 represents the average prevailing domestic retail price of commercial rice sold in the local market.    
  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 5 - TABLE II  
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 
(P/kg) Average representative 
domestic sales price 
(P/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       
2016 None None None None None 
2017 None None None None None 
2018 None None None None None 
2019 None None None None None 
   
  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 6 - TABLE III  
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 
enterprise  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      
2016 118,257.00  17,627,244.00  1,144,220.00  12,567,000.00  
2017 29,441.00  19,276,347.00  692,822.00  13,965,555.29  
2018 61,784.00  19,066,093.00  590,379.00  14,209,240.36  
2019 732,571.00  18,814,827.00  723,125.00  15,299,017.10  
* Columns 5 and 6 are in rice terms while columns 3 and 4 are in palay terms.  
   
  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 7 - 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 (P/kg)  Average representative 
domestic sales price 
(P/kg) * National 
production  
(Calendar Year)  
1 2 3 4 5 6 7 
Corn  
10.005.90 Maize (corn), 
other than seed       
2016 None  None  None  White corn ( WGN) 23.87  
Yellow corn ( YGN) 22.57  7,218,817.00  
2017 None  None  None  WGN 29.09  
YGN 22.49  WGN 2,104,201  
YGN 5,810,708  
2018 None  None  None  WGN 28.81  
YGN 24.52  WGN 2,145,306  
YGN 5,626,612  
2019 None  None  None  WGN 27.68  
YGN 24.95  WGN 2,070,887  
YGN 5,907,957  
* Column 6 represents the average prevailing domestic retail price of commercial corn sold in the local market.  
   
  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 8 - TABLE II  
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 (P/kg)  Average representative 
domestic sales price 
(P/kg)  National 
production  
(Calendar Year)  
1 2 3 4 5 6 7 
Corn 
10.005.90 Maize (corn), 
other than seed       
2016 None None None None None 
2017 None None None None None 
2018 None None None None None 
2019 None None None None None 
   
  G/STR/N/17/PHL • G/STR/N/18/PHL  
 
- 9 - TABLE III  
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 enterprise  National 
consumption * 
1 2 3 4 5 6 
Corn  
10.005.90 Maize (corn), other 
than seed          
2016 1,488.00  7,218,816.00  388.00  8,030,000  
2017 5,980.00  7,914,909.00  284.00  7,820,788.60 ** 
2018 - 7,771,918.00  589.00  9,064,188.28 ** 
2019 - 7,978,844.55  - 8,300,924.00 ** 
* Column 6 is total of seeds, feeds/wastes, processing, and per capita consumption.  
** Per capita consumption was based on Selected Statistics on Agriculture 2020, PSA . 
 Population was based on Mid -Year Population Projections of 2017, 2018, and 2019 – PSA. 
 
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