NATIONAL FOOD AUTHORITY

Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

PROPOSED PROJECT : CONSTRUCTION OF 100,000 BAGS CAPACITY

WAREHOUSE
LOCATION : SAN JOSE, OCCIDENTAL MINDORO

I. BACKGROUND

The National Food Authority (NFA) by the virtue of RA 11203 or Rice Tariffication Law is
now tasked to ensure adequate buffer stocks for food emergencies and calamities. Hence, the
NFA is poised to undertake intensified palay procurement for a bigger volume of buffer stocks to
be sourced from the local harvest.

The NFA Occidental Mindoro Branch covers the Municipalities of San Jose, Magsaysay,
Rizal and Calintaan where voluminous palay procurement is projected. It has an average palay
production of 3.5 million bags during main cropping season and 1.5 million bags during second
cropping season. Strategically, the NFA Occidental Mindoro utilizes owned and leased
warehouses located all throughout the SAMARICA Area (San Jose, Magsaysay, Rizal and
Calintaan, Occidental Mindoro) to effectively increase the agency’s capability in addressing the
buffer stocking mandate.

However, even with the existing combined capacity of NFA-owned and leased warehouses,
the warehousing capacity of the branch will still not be enough to accommodate the voluminous
palay deliveries. As a matter of fact, during the 2019 procurement season, the vast volume of
palay delivered compelled the branch to resort to outside piling just to accommodate the farmers.

Thus, with such heavy procurement operations, there is a need for the NFA Occidental
Mindoro to increase its warehousing capability to accommodate more palay deliveries from the
farmers of SAMARICA Area.

II. JUSTIFICATIONS

The National Food Authority Occidental Mindoro highly recommends the construction of
additional 100,000 Bags Capacity Warehouse at San Jose, Occidental Mindoro due to the
following:

1. Based on NFA marketing profile for the last five (5) years (2014-2018), the following
information were gathered;
Table 1. VOLUME OF PALAY PRODUCTION PER MUNICIPALITY, 2014-2018

YEAR SAN JOSE MAGSAYSAY RIZAL CALINTAAN TOTAL

2014 1,536,686 593,930 1,135,293 993,710 4,259,619

2015 1,517,907 563,559 1,266,162 987,567 4,335,195

2016 1,637,007 610,843 1,365,220 1,064,725 4,677,795

2017 1,756,755 655,365 1,275,875 1,014,115 4,702,110

“A food secure Philippines with prosperous farmers and fisherfolk.”
 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

2018 1,833,929 700,838 1,349,829 1,022,537 4,907,133

Table 2. VOLUME OF PALAY PROCUREMENT PER MUNICIPALITY, 2014-2018

YEAR SAN JOSE MAGSAYSAY RIZAL CALINTAAN TOTAL

2014 60,345 15,632 50,348 19,335 145,660

2015 525,148 99,235 474,927 217,711 1,317,021

2016 330,698 77,183 370,722 113,809 892,412

2017 46,960 17,162 74,657 38,760 177,539

2018 198,228 60,127 253,325 83,477 595,157

Table 3. PARTICIPATION AND ABSORPTION RATE OF NFA PALAY PROCUREMENT IN

SAN JOSE AREA, 2014-2018

PALAY
ACTUAL PALAY TOTAL PALAY
PRODUCTION
YEAR PROCUREMENT PROCUREMENT %P %A
(SAN JOSE
in San Jose (SAMARICA AREA)
AREA)

2014 1,536,686 60,345 145,660 41.43 3.93

2015 1,517,907 525,148 1,317,021 39.87 34.60

2016 1,637,007 330,698 892,412 37.06 20.20

2017 1,756,755 46,960 177,539 26.45 2.67

2018 1,833,929 198,228 595,157 33.31 10.81

AVE 1,656,457 232,276 625,558 37.13 14.02

Table 1-3 shows that the palay production in San Jose is voluminous averaging about
1,656,457 bags annually. The NFA palay procurement in the municipality of San Jose showed an
average absorption rate of 14.02% or 232,276 bags per annum for the last five (5) years
representing 37.13% percentage share to the total actual procurement in SAMARICA even if the
prevailing buying price of palay by traders was higher than NFA price.
For the years 2014-2018, with the national scenario of increased price in rice in the
commercial market, palay prices have surged to as high as Php. 22.00 per kilogram which
decreased tremendously the procurement of the branch. However, on the latter palay
“A food secure Philippines with prosperous farmers and fisherfolk.”
 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

procurement season of 2018, with the help of the additional buffer stocking incentives (BSI) of
Php 3.00/kg, the NFA palay procurement in the area increased massively once again. This
scenario continued this 2019 with the passing of RA 11203 resulting to lax trading operation of
private traders/millers with the influx of imported rice even here in the Island Province of
Mindoro.

2. Based on warehousing capability of NFA Occidental Mindoro

Table 4.2014 -2018 HISTORICAL LEASED WAREHOUSES

YEAR MUNICIPALITY MONTHLY PRIVATE WHSES

/ LOCATION WHSE RENTAL
NO. CAPACITY AREA (in sq. m.)

2014 San Jose 174,380.00 7 207,500 4,216.00

Magsaysay 5,000.00 1 7,000 194.00

Rizal 31,800.00 4 53,000 1,022.00

Calintaan - - - -

TOTAL 211,180.00 12 267,500 5,432.00

2015 San Jose 190,955.00 7 244,102 5,571.00

Magsaysay 10,830.00 2 12,500 358.00

Rizal 38,980.00 6 56,300 1,302.00

Calintaan 12,100.00 2 21450 463.00

TOTAL 252,865.00 17 334,352 7,693.00

2016 San Jose 333,075.14 12 379,666.00 8,131.20

Magsaysay 10,830.00 2 11,048.00 257.50

Rizal 50,740.00 7 72,887.00 1,637.75

Calintaan 12,099.15 2 20,524.00 462.70

TOTAL 406,744.29 23 484,125.00 10,489.15

2017 San Jose 197,345.94 5 237,410.00 5,291.20

Magsaysay 10,830.00 2 13,810.00 357.50

Rizal 29,079.12 5 45,059.00 1,009.25

Calintaan 12,099.15 2 25,655.00 462.70

“A food secure Philippines with prosperous farmers and fisherfolk.”

 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

TOTAL 249,354.21 14 321,934.00 7,120.65

2018 San Jose 126,500.00 2 131,846.00 2,747.00

Magsaysay 12,000.00 2 11,048.00 357.50

Rizal 16,500.00 5 21,330.00 504.00

Calintaan - - - -

TOTAL 155,000.00 9.00 164,224.00 3,608.50

Table 4 shows that the existing leased warehouses being occupied by NFA in San Jose area
accumulate high cost of expenses in terms of rentals, security services and other NFA operation-
related services.

Table 5. PROFILE OF ALL NFA-OWNED WAREHOUSES

NO.
NAME OF CAPACITY SERVICE
LOCATION OF REMARKS
PHF (BAGS) AREA
UNITS

GID WHSE San Jose, 4 300,000 SAMARICA In good condition

(I,II,IV,V) Occidental
Mindoro

GID WHSE Calintaan, 1 100,000 SAMARICA In good condition

(III) Occidental
Mindoro

NAWACO San Jose, 2 91,710 SAMARICA The wall of NAWACO I

WHSE Occidental Warehouse collapsed
Mindoro brought by Typhoon “Ursula
and parapet wall at
NAWACO II might collapse
anytime due to its old
condition

“A food secure Philippines with prosperous farmers and fisherfolk.”

 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

TOTAL 491,710

Table 5 shows that there are only seven (7) NFA-owned warehouses located at San Jose and
Calintaan Area with a minimum and maximum capacity of about 30,000 bags and 100,000 bags
respectively. They served not only as buying stations but also as terminal warehouses for all the
leased warehouses throughout the SAMARICA Area.

However, NAWACO 1 & 2 Warehouses were severely devastated by Typhoon Ursula last
December 25, 2019. The front wall of NAWACO 1 Warehouse with a designed capacity of
30,000 bags situated at San Roque, San Jose, Occidental Mindoro, where the 2.5 TPH rice mill is
housed, collapsed. There was also appearance of large cracks and fissures on the remaining walls
and one of the side walls already tilted. On the other hand, NAWACO 2 Warehouse with a
designed capacity of 60,000 bags exhibits a noticeable swaying when strong winds hit its front
and back walls. Due to its prolonged usage, cracks and fissures on its wall manifest the lesser
dependability in terms of structure integrity. As a precautionary measure, these walls were
temporarily tied using nylon ropes into the wooden post inside the warehouse.

Moreover, as these warehouses were acquired from PNB-NIDC in the early 1980’s, these
facilities are already perceived beyond its serviceable life, hence our recommendation to have
these structures undergo a structural integrity test.

NAWACO 1 warehouse after the devastation of Typhoon Ursula

“A food secure Philippines with prosperous farmers and fisherfolk.”

 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

The parapet wall NAWACO II Warehouse as being hold still by nylon rope.

3. Based on the actual accomplishment of NFA Occidental Mindoro

TABLE 6. TEN-YEAR HISTORICAL ACCOMPLISHMENTS, 2010 TO 2019 (in bags)

YR. PROCURE RICE MILLING DISPERSAL DISPERSAL

-MENT DISTRIBU (STOCK OUTFLOW) (STOCK INFLOW)

Palay Rice Palay Rice

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 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

-TION

2010 2,002,216 1,019,292 1,765,679 27,000 152,563 - 1,625

2011 1,359,819 304,773 805,885 399,100 138,750 - -

2012 1,466,827 241,890 1,261,484 199,000 598,100 - 550

2013 1,207,490 437,930 1,946,534 - 862,672 12,500 13,093

2014 145,660 188,111 299,224 - 131,331 - 121,553

2015 1,317,021 275,952 721,183 - 195,630 35 56,072

2016 892,412 577,818 980,291 222,000 167,950 - -

2017 177,539 223,652 450,017 - 100,091 3,802 22,116

2018 595,158 113,050 102,674 - 2,700 - 49,257

2019 1,616,541 102,905 942,170 305,400 401,750 600 70,500

AVE. 1,078,068 348,537 927,514 230,500 275,154 4,234 41,846

Table 6 clearly shows the consistent achievements of NFA Occidental Mindoro in terms of
palay procurement, rice distribution, milling and dispersal operations. For the past years, with the
national scenario of increased price in rice in the market, palay prices have surged to as high as
P22.00 per kilogram resulting to a very low or almost nil procurement transaction for the branch.
However, on the latter palay procurement season of 2018 up to recent, and with the help of the
additional Buffer Stocking Incentives (BSI) of Php 3.00/kg, the NFA palay procurement in the
area increased massively once again. Also, with new approved NFA buying price of
Php.19.00/kg and considering that the rice traders did not participate much on palay
procurement, huge volume of palay procurement will be again anticipated. Thus, additional
warehousing capacity is extremely needed by the branch.

TABLE 7. MONTHLY ACTUAL ACCOMPLISHMENT OF NFA OCCIDENTAL MINDORO

FOR 2019

% EST. %
MONTH ACTUAL TARGET
ACCOMP. PRODN ABSORP.
JANUARY 7,144.12 1,500 476.27%

FEBRUARY 3,454.53 20,000 17.27%

MARCH 98,881.41 150,000 65.92%

APRIL 253,829.30 350,000 72.52%

MAY 212,202.97 100,000 212.20%

JUNE 28,527.78 15,000 190.19%

SUB-TOTAL 604,040 636,500 95% 1.4 M 43%

“A food secure Philippines with prosperous farmers and fisherfolk.”

 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

JULY 7,535.10 1,000 753.51%

AUGUST 9,695.84 2,000 484.79%

SEPTEMBER 25,660.45 175,000 14.66%

OCTOBER 352,738.90 350,000 100.78%

NOVEMBER 346,049.81 600,000 57.69%

DECEMBER 270,821.17 159,400 169.90%

SUB TOTAL 1,012,501 1,287,400 79% 3.2 M 32%

GRAND
1,616,541 1,923,900 84% 4.6 M 35%
TOTAL

Table7 shows the 2019 Monthly Accomplishment of NFA San Jose Occidental Mindoro in
terms of palay procurement. The branch has procured a total of 1,616,541 bags of good quality
palay resulting to 84% accomplished for the given procurement target with an average absorption
rate of 35%. The branch did not hit the given target due to the huge deficit in storage capacity
even if the branch simultaneously conducted milling, dispersal and rice distribution to create
additional warehouse spaces.

On the other hand, with the set 2020 procurement target 5.5 million bags for whole Region IV
(Southern Tagalog) comprises of ten (10) Provincial Offices, NFA Occ. Mindoro (SAMARICA)
shared the biggest slice to wit:

Provincial Offices 2020 Procurement % SHARE

Target
1. Batangas - 50,000 0.9%
2. Infanta - 30,000 0.5%
3. Laguna - 50,000 0.9%
4. Mamburao (MAPSSA, Occ. Mdo.) - 1,500,000 27.0%
5. Marinduque - 0 0%
6. Occ. Mindoro (SAMARICA, Occ. Mdo.) - 2,705,000 48.61%
7. Or. Mindoro - 650,000 11.68%
8. Palawan - 550,000 10.00%
9. Lucena, Quezon - 30,000 0.54%
10. Romblon - 0 0%
TOTAL - 5,565,000

About 48.61% or 2,705,000 bags 2020 procurement target of NFA Region IV was allotted to
the NFA SAMARICA Branch vis-à-vis its combined NFA-owned warehousing capacity of
approximately 440,000 bags only. Said capacity will be lessened due to NFA-owned NAWACO I
and II Warehouses that are possible to be condemned due to damages brought by Typhoon
“Ursula” and its old condition.

Table 8. ADDITIONAL WAREHOUSING / STORAGE SPACE REQUIREMENT (in bags)

COMBINED LESS: CAP. OF LESS: 2020 (DEFICIT) REQUIRED

CAPACITY OF OWNED- PROCUREMENT ADD'L
NFA-OWNED WAREHOUSES TO WAREHOUSING /
“A food secure Philippines with prosperous farmers and fisherfolk.”
 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

WAREHOUSES BE CONDEMNED TARGET STORAGE SPACE

(in bags)

440,000 80,000 2,705,000 (2,345,000)

Table 8 shows that with the given procurement target for 2020, although procurement,
milling, dispersal and rice distribution will be simultaneously conducted, still the Branch will
experience a huge deficit in storage space due to continuous and heavy influx of palay deliveries
from various farmer groups.

III. RECOMMENDATIONS

From the aforementioned information and data, the following can be inferred:

1. It is hereby strongly recommended the construction of warehouses with combined

capacity of 100,000 bags to serve the warehousing needs of the branch to cater to the
farmers of SAMARICA area. These structures will be best erected at NFA
NAWACO compound at San Roque, San Jose, Occidental Mindoro considering the
idle area in our six (6) hectares lot.

It is worthy to note however that the office has a pending Civil Case Numbered R-
2053 regarding unpaid real property taxes filed by the Municipality of San Jose,
Occidental Mindoro thereby prohibiting NFA Occidental Mindoro to conduct any
further improvements in its real properties. The branch has already asked legal
assistance from Central Office to resolve the issue.

2. As a result of the devastation of Typhoon Ursula last December 25, 2019, the
NAWACO I and NAWACO II warehouses were severely damaged. Regarding this,
we are recommending the conduct of structural integrity test for these facilities,
however based on our initial assessment even before the conduct of the actual
structural integrity test; we are highly recommending the demolition of these
structures due to the threat/danger it may cause to the employees and individuals
working in the area.

Prepared by: Noted:

JORIEL P. CANO LILIBETTE P. IGNACIO

“A food secure Philippines with prosperous farmers and fisherfolk.”
 NATIONAL FOOD AUTHORITY
Occidental Mindoro Provincial Office

Labangan, San Jose, Occidental Mindoro Tel No. (043) 457-0322 E-mail add: [email protected]

OIC Facility Management Provincial Manager

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