The country signed a deal in January to buy 1.5 million tonnes of milled rice from Vietnam and the source said the decision to import additional stocks would hinge on the outcome of rice production in the first half of the year.

Most of the Vietnamese rice has arrived in the Philippines and deliveries are expected to be completed in July.

The Philippines, which imports around 10 percent of its annual rice needs, has also allocated up to 400,000 tonnes of rice import rights to private firms this year, up from a previous allotment of 300,000 tonnes, the same source said.

The Philippines, which is facing national elections in 2010, wants to ensure it has more than enough rice stocks to steady local prices of the staple.

''As much as possible, the government wants to stabilize prices. We cannot afford a repeat of the crisis last year,'' the source said.

Manila imported a record 2.3 million tonnes of rice in 2008, mostly from Vietnam, helping push the price of the grain to a record $1,080 a tonne in April last year.

Benchmark Thai rice has since fallen, and traded around $530 per tonne last week after Vietnam, the world's second largest rice exporter after Thailand, said it may sell a record 5.2 million tonnes of the grain this year after lifting export curbs last month.

If the government uses its option to bring in additional stocks via a tender or a government-to-government deal, and the private sector takes up all of its allocation, the Philippines' total rice imports this year would reach 2.25 million tonnes, slightly under the 2008 level.

The Philippines was earlier aiming to buy a total 1.8 million tonnes of rice overseas this year, including the 300,000 tonnes previously allotted to private firms.

Another government source said world rice prices and Vietnam's production forecast would be key for the Philippines' decision on its purchase strategy.

State-run National Food Authority (NFA) allowed private firms to start buying 200,000 tonnes last week.

''NFA can also take up any unused allocation of the private sector if the need to import more would arise,'' the source said.

Last year, private firms imported only about 75,000 tonnes, about a fifth of their allocation of more than 350,000 tonnes.

Agriculture Secretary Arthur Yap said in March the country's paddy rice production could reach 7.4 million tonnes in January to June, up from 7.1 million a year earlier on increased area.

The NFA's milled rice inventory as of May 4 stood at 1.024 million tonnes, equivalent to about 29 days consumption, said NFA spokesman Rex Estoperez.

The state's rice importing arm has to have at least 30 days' stocks when the lean season starts in July, he added. (Reuters)

source: http://mb.com.ph/articles/205013/nfa-import-350000-mt-additional-rice

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