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Sugar: Some questions to answer

A vendor repacks sugar at Quinta Market in Quiapo, Manila, Aug. 11, 2022. — PHILIPPINE STAR/ EDD GUMBAN

It looks like alleged smuggling of agricultural commodities have come front and center in news reports. For many years there was talk of smuggling of rice, pork, chicken, hamburger patties, garlic, and now onions and sugar.

One former government official remarked that “We are a strange people. We used to smuggle jewelry, Rolex watches, Italian shoes, luxury cars but now people are smuggling or attempting to smuggle onions and such kitchen items or stuff.” One can however say that smuggling becomes financially attractive when there are shortages — real or artificial.

At this time, the latest controversy is the alleged order of the Sugar Regulatory Administration (SRA) to import 440,000 metric tons of sugar before March 1. The SRA is the government agency primarily responsible “for the development of the sugar industry and to improve the working conditions of laborers.” The SRA is attached to the Department of Agriculture (DA). Unless the administrative code has changed has administrative supervision over the SRA. The SRA itself performs technical functions.

For context, during the martial law years, up to the end of the Marcos Sr.’s rule on Feb. 25, 1986, the SRA functioned independently of the DA. Marcos had given free rein to allies in the sugar industry to function as de facto governors of the SRA. Then Secretaries of Agriculture, Arturo Tanco, Jr. and Salvador Escudero, especially the former, had little to do with the operations and policy making at SRA. Given the involvement of presidential cronies in the industry, Tanco was just only too happy with the “arrangement.” He was focused on rice, corn, fisheries, livestock and poultry industries, and fertilizer availability which were already gargantuan tasks to begin with.

Context is important because the incumbent President of the Republic is also the (part time) Secretary of Agriculture. In effect, the SRA is now directly under the Department and Secretary of Agriculture. Senior Undersecretary Domingo F. Panganiban, who has been at the DA for probably at least 30 years, off and on, is in effect the Chief Operating Officer (COO) who works closely with the Office of the Executive Secretary. As we stated earlier, the DA has now come directly under the President who is also Secretary of Agriculture. He can and it seems, has “delegated” some of his powers to Mr. Panganiban and the Executive Secretary. We are not aware where the SRA Administrator and the SRA Board fit in or figure in all of these.

Given some context or background, we can perhaps go over reports of staff of legislators, investigative groups, and some media outfits to provide us a clearer perspective. Portions of such reports are found in this column.

Sugar Order (SO) No 6 was approved on Feb. 15, 2023. The Order allows the importation of 440,000 metric tons (MT) of sugar. The initial batch of imports were intended to arrive no earlier than March 1. However, there was a shipment that arrived at the Port of Batangas a week before the SRA approved SO No. 6.

The imported sugar was allegedly “connected with a draft and undated memo” supposedly issued by Senior Undersecretary Panganiban. The memo informs the SRA to “allocate the importation to three companies — All Asian Countertrade, Inc. (250,000 MT), Sucden Philippines and Edison Lee Marketing Corp. (1000,000 MT).” The order was allegedly based on the instructions of the President “through” the Executive Secretary. All this according to legislators’ staff reports.

Panganiban, an amiable civil servant throughout our association with him in the early to the mid 1970s, said (again according to reports) that there were no irregularities that attended the importation and he considered the memo issued by the Executive Secretary dated Jan. 15 a “sugar order” to proceed with the importation.

Panganiban, according to staff reports, said he picked the three companies from a list and instructed them “to proceed with the importation of sugar provided that they agree to reduce the prices of sugar.”

Panganiban also claimed that the President was aware and “properly informed” when the imported sugar arrived on Feb. 9. Study groups point out that the Anti Agricultural Smuggling Act (RA 10845) states that the entry of into the country of sugar worth at least P1 million and without a proper permit, is prohibited.

To be sure, the sugar industry, a potent political force, is up in arms over this issue unless proper answers are given to some basic questions. The sugar industry is probably the most organized agribusiness industry, mandating when to mill, where to mill, and a host of other rules and norms that have survived decades.

Expect questions like the following to be asked:

1. SO No. 6 provides that the first shipment should come in not earlier than March 1. Isn’t the early arrival of the sugar a violation of the Sugar Order?

2. What role does the Executive Secretary have in the sugar importation process? What is the role of the SRA Board in this process, if any?

3. What were the bases for choosing the three importers?

These questions need to be answered for the sake of transparency and accountability, two governance principles which have been violated for political expediency’s sake.

Philip Ella Juico’s areas of interest include the protection and promotion of democracy, free markets, sustainable development, social responsibility and sports as a tool for social development. He obtained his doctorate in business at De La Salle University. Dr. Juico served as secretary of Agrarian Reform during the Corazon C. Aquino administration.

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