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This is How San Miguel Plans to Address PH's Rice Woes

Conglomerate plans to build giant climate-controlled grains terminals in eight locations to store rice
By Pauline Macaraeg |

 

 

In his televised “tête-à-tête” with Presidential Chief Legal Counsel Salvador Panelo on September 11, President Rodrigo Duterte threatened he will move for the abolition of the National Food Authority (NFA) Council for its failure to prevent the soaring rice prices through timely imports.

 

A day after, Ramon Ang, the head of the country’s largest food and beverage company, San Miguel Food and Beverage Inc., told reporters the company was eyeing to import massive amounts of rice to help put an end to seasonal shortages of the commodity after the importation of rice is liberalized by law. Currently, rice imports are tightly controlled by the government through the NFA Council.

 

If San Miguel’s plans push through, it may yet demonstrate how a private company could succeed in accomplishing what the government has been trying to do for decades.

 

Tutulong kami diyan sa negosyong ‘yan. Kung may batas na pwede kaming pumasok sa ganoong negosyo (We will help in that business. If there’s a law that we can participate in that kind of business), we will get into that—and quickly we can do it,”  Ang said after the special stockholders’ meeting for San Miguel Food and Beverage Inc. on Wednesday, September 12.

 

A proposed bill passed by the House of Representatives will allow businesses and individuals to import rice as long as they pay a 35-percent tariff. The lower legislative body has approved House Bill No. 7735 or the Revised Agricultural Tariffication Act on third and final reading on August 14. Its counterpart bill in the Senate is also expected to be passed in September.

 

Ang shared that they are looking to build more silos, or the temperature-controlled towers or pits on farms used to store grain in bulk. He said storing imported rice in these containers will improve its quality and will be a good solution for food security in the country.

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’Pag nag-import tayo dito ng bigas or palay, dahil may tariff na ilalagay ang gobyerno, 35 percent tax, ‘di ‘yung perang ‘yun, i-subsidize sa rice farmers (If we import rice, the government will impose a 35-percent tax. In turn, that tax should be subsidized to rice farmers),” Ang reasoned. He proposed that the tax collected from importers should be allocated for the production needs of rice farmers, such as tractors and other planting materials, in order to improve the system and alleviate the rice shortage in the country.

 

Importing rice would also not be a problem for SMC since they already own piers that can handle Panamax ships, or shipping vessels that have a payload capacity of 60,000 to 80,000 tons each, said Ang.

 

Once President Rodrigo Duterte signs the bill into law, he said they could set up the grain terminals in at least eight of their existing facilities all over the Philippines: in Mabini, Batangas; Darong, Davao; Leganes, Iloilo; Bacong, Negros Oriental; Mandaue, Cebu; San Fabian, Pangasinan; Mariveles, Bataan; and Sariaya, Quezon.

 

’Yung bawat isang grain terminal namin (In each of our grain terminal), we usually handle mga three to four million tons per year on our grain or wheat for our flour mills and feed mills,” he said. “Kung meron kang sampung lugar non, ‘di sobra sobra ‘yun. (If you own 10 facilities, then it would be more than enough).”

 

San Miguel Corp., San Miguel Food and Beverage Inc.’s parent firm, is the 19th biggest listed firm in the country by market capitalization as of September 12. In 2017, the company recorded profits of Php54.81 billion, a 4.9-percent increase from the previous year.

 

 

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Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg

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