DRAFT PROPOSAL BIGAS SARILING ATIN MONTHLY RICE ALLOWANCE FOR FAMILIES OF GOVERNMENT EMPLOYEES

1. DRAFT PROPOSAL BIGAS SARILING ATIN MONTHLY RICE ALLOWANCE FOR FAMILIES OF GOVERNMENT EMPLOYEES PROPONENTS: National Food Authority Employees Association (NFAEA) National Food Authority (NFA) November 2013

2. EXECUTIVE SUMMARY •  AS THE largest employer of Filipinos, the civil service sector constitutes an estimated 1.4 million government employees assigned to hundreds of government offices nationwide. A great majority of these employees and their families come from the lower- to middle- strata of the economic class. • Inflation and other economic realities at present lessen the purchasing power of underprivileged consumers, including a significant number of government employees, and their capability to provide adequate food at the household level. • In 2012, the National Statistics Coordinating Board (NSCB) pegged the poverty threshold at around Php93,000.00 per year yet the actual cost-of-living stands at almost Php30,000.00 a month. This is a glaring disparity to a mere Php15,000.00 a month—the current weighted average basic salary being received by a rank-and-file government employee.

3. An ordinary government employee, therefore, is incapable to cope with the rising cost of living without adequate living allowance or non-wage benefit over and above the monthly salary received. • The proposal is to grant monthly rice allowance to each government employee as a non-wage benefit. The scheme is expected to benefit around 1.4 million Filipino families making it a major component of the social amelioration thrusts of the national government. It is also consistent with efforts to sustain the Food Staples Sufficiency Program (FSSP)—one of the flagship programs of the administration of H.E. President Benigno Simeon Aquino III to secure the food needs of our people. • We recall the President’s SONA in 2011 where he declared as national policy the Food Staples Sufficiency Program and emphatically stressed: “Una, hindinatayoaangkatnghindikailangan. Ikalawa, ayawnanatingumasasapag-aangkat. Angisasaingni Juan dela Cruz ditoipupunla, ditoaanihin, ditobibilhin.”

4. The project specifically ensures that rice supply will be strictly sourced domestically—hence the project title ‘BigasSarilingAtin’—creating positive multiplier effects in the economy as more than 60,000 palay farmers nationwide will benefit from its implementation. Thousands of new jobs will be created especially in the rural areas, particularly in rice production, postharvest-related manufacturing, processing and transport trading sectors. • The monthly distribution of this non-wage benefit will steadily boost palay production, help spread rice supply evenly which, in turn, would stabilize prices and supplies of the bulk of commercial rice nationwide. • Since more than a million of government employees are situated throughout the archipelago, rice supply will be circulated evenly. This scheme will neutralize unscrupulous traders and warehousemen in the private sector seeking to manipulate rice prices and supplies.

5. The proposal naturally requires substantial budgetary expenditure but will certainly reap greater rewards from the further pump priming of the Philippine rice industry and the economy in general. Moreover, ‘BigasSarilingAtin’ Monthly Rice Allowance for Families of Government Employeeswill promote an environment for increased productivity that simultaneously ensures food security for their families. It is also a means of recognizing the value of government employees’ notable contribution to public service which would eventually result to an energized and motivated civil service corps performing and delivering the government's performance targets.

6. PROJECT TITLE BIGAS SARILING ATIN Monthly Rice Allowance for Families of Government Employees PROPONENTS National Food Authority Employees Association (NFAEA) National Food Authority (NFA)

7. OBJECTIVES: 1 Create an environment for government employees (G.E.) to become more productive while ensuring their household rice supply. 2 Sustain the Food Staples Sufficiency Program (FSSP) Rice Program by adopting this project as one of its strategic components. 3 Promote increasedproduction for palay farmers since rice supply shall only be sourced domestically. 4 Provide a new marketing “battlefield” for NFA’s distribution and procurement programs. 5 Evenly spread rice supply in circulation on a monthly basis thereby helping government efforts on stabilization of prices and supplies of rice through NFA.

8. 6 Produce amultiplier effect in the economy: A Help reduce poverty incidence. B Create jobs in the rural and urban areas as well. C Increase income of local manufacturers of production and post-harvest facilities / equipment, trading and transport entities. D Increase farmers’ income. E Increase revenue collections of the government. 7 Conform to the Organizational Performance Indicator Framework (OPIF) Log Frame such as the NFA agreed Mission, Vision, Societal Goals and Sectoral Outcome(s) as approved by the Commissioners of the Government Commission for GOCCs. 8 Conform to the NFA mandate, DA-FSSP-RICE PROGRAM VISION/MISSION and the Medium Term Philippine Development Plan (MTPDP) of the Aquino Administration.

9. II. DESIRED OUTPUTS 1 Alleviate the economic condition of one million families of G.E. by sustaining this monthly non-wage benefit. 2 Increase productivity of G.E. which shall result to improved public service. 3 Provide NFA with a new marketing “battlefield.” The procurement and distribution of rice for one million government employees nationwide is an additional volume of transaction which is over and above the regular rice procurement and distribution program of the government through NFA.

10. 4 Stimuli for economic growth in the countryside. The estimated one million bags required monthly for this project (50 kg per bag) shall be equivalent to 12-million bags of rice per annum (600,000 MT) required to supply the program. The said volume is equivalent to 923,000 MT of palay to be procured yearly by the government through NFA. The rice volume shall be sourced from domestic procurement of premium rice from farmers’ cooperatives and associations. This shall be over and above the NFA regular palay procurement for buffer stocking and food security. 5 Job generator in the rural and urban areas: Since this project has a multiplier effect on the economy, it shall create jobs in rice agriculture and marketing specifically in milling, trading, hauling, and manufacturing in rural areas; and in warehousing and hauling in urban areas. 6 Stabilize farm gate prices of palay and stabilize rice prices in consumer markets.

11. 7 Guarantee additional market and additional income for palay farmers who shall eagerly augment production to supply a captured market for 12 million bags of rice. 8 Reduce poverty incidence in the countryside. 9 Rice stocks shall be fast moving as turnover of stocks nationwide shall be made on a monthly basis. 10 Provide a potential window to international trading for well-milled rice (WMR), 90 percent head rice, and long grains aromatic varieties in the event that there shall be surplus production of premium rice. 11 Serve as incentive to farmers to plant more palay in support of the government’s Food Staples Sufficiency Program (FSSP).

12. III LEGAL BASIS: A Issuance of an Administrative Order (AO) by the President of the Philippines is required for this project to take effect. (See attached draft AO) The grant of this non-wage benefit or “allowance in kind” type of project is feasible under the following citation: In the cited Supreme Court decision of BFAR Employees Union, R.O. VII vs COA, G.R. No. 169815, August 13, 1998, compliance with Sec. 4.5 of Department Budget and Management (DBM) Circular No. 16 dated November 28, 1998: Section 4.5. All agencies are hereby prohibited from granting any food, rice, gift checks or any other form of incentive/allowances except those authorized via Administrative Order by the Office of the President (Emphasis Supplied)

13. B Enactment of a law is required in order to sustain this project along with the FSSP even beyond the current Administration. C This project is congruent with the NFA Road Map for 2014-16 and the OPIF Log Frame of the Commissioners of the Government Commission for GOCCs, and the NFA Mission, Vision, Societal Goals and Sector Outcome(s). D The said AO shall give NFA the exclusive authority to procure and distribute ‘BigasSarilingAtin’ rice variety and quality strictly in accordance with the specification as follows:

14. D.1. The rice quality shall be WMR, 90 percent whole long grains and aromatic, similar to that of MasaganangSakahan Incorporated (M.S.I.) rice being supplied monthly for Land Bank employees nationwide. MSI is a subsidiary of LBP which supplies 14,000 bags of rice to LBP employees every two months. D.2. One bag of rice is contained in a yellow colored bag of 25 kg (Phase I) and 50 kg (Phase II) with markings of BigasSarilingAtin—Monthly Rice Allowance for Families of Government Employees and Not for Re-Sale. (See Exhibit I for illustration of packaging material) D.3. Support price for premium palay (Long Grain Aromatic). Flexi-pricing shall take effect as a means to strategically procure premium quality palay from farmers and farmers’ groups. The pricing shall be formulated by the NFA ‘BigasSarilingAtin’ Project Monitoring Committee.

15. BUDGET EXPENDITURES

16. Procurement Operational Expenses: (see separate file)

17.  V. DRAFT ADMINISTRATIVE ORDER (see separate file)  VI. DRAFT SENATE/HOUSE BILL WITH EXPLANATORY NOTES (see separate file) VII. ANNEXES