Cebu City council approves amended cheap rice program deal

Local

THE Cebu City Council has approved an amended agreement with Food Terminal Inc. (FTI) that imposes stricter financial and accountability safeguards on the city’s long-delayed P20-per-kilo rice program.

This is intended to address the concerns that stalled the project for months.

The Sangguniang Panlungsod approved the resolution during a special session on Friday, Dec. 19, authorizing Mayor Nestor D. Archival to sign the Amendatory Memorandum of Agreement (AMOA) with FTI, the government-owned firm tasked to supply subsidized rice under the national government’s food security program.

Under the amended deal, all rice stocks delivered to Cebu City will be on a consignment basis, with ownership remaining with FTI until the rice is actually sold, distributed, or otherwise validly disposed of to beneficiaries.

City Attorney Briccio Joseph Boholst said this arrangement ensures that no obligation to pay arises upon delivery, preventing the premature disbursement of public funds.

“This clearly distinguishes the transaction from a sale and prevents premature transfer of ownership,” Boholst said in his legal opinion.

He added that payments will only be made after actual sale or disposition of the rice, consistent with government fiscal responsibility rules.

The AMOA also declares that proceeds from the sale of the P20-per-kilo rice will be treated as trust funds.

These will be subject to segregation, proper liquidation, and remittance only after verification, a provision meant to address potential audit concerns.

The city’s liability is limited to losses resulting from negligence, while losses due to force majeure will be handled in accordance with Commission on Audit (COA) regulations, the legal opinion said.

Boholst said his office found the payment terms, replenishment mechanisms, and continuity provisions in the amended agreement to be clear and reasonable, and raised no legal objection to its execution and implementation.

Meanwhile, Archival said the city will initially implement the program on a limited scale to test its systems before expanding distribution.

He said Cebu City initially requested an allocation of 10,000 sacks from FTI, acknowledging that the city may not be able to distribute rice in fixed quantities, such as 10 kilos per household, due to logistical constraints.

“Ang akong initial request is 10,000 sacks sa Cebu City,” Archival said in an interview earlier this week.

He added that unsold stocks may be redistributed to other areas if demand falls short.

Archival said barangay governments will be responsible for setting detailed guidelines for distribution, while FTI may establish designated selling areas within barangays.

He added that senior citizens may purchase subsidized rice through existing Kadiwa outlets and will not be limited to barangay-based distribution.

Under the P20-per-kilo rice program, FTI supplies rice procured at about P33 per kilo and sells it at P20, with the price difference subsidized by the national government and the local government unit.

Archival said Cebu City’s share of the subsidy could be as low as P6 per kilo, but would still provide meaningful relief to low-income households.

The P20-per-kilo rice program is a flagship initiative of President Ferdinand Marcos Jr. aimed at easing the impact of high food prices on vulnerable sectors, including indigent families, senior citizens, persons with disabilities, solo parents, disaster victims, and indigenous peoples.(TGP)