Doing the right thing

“The person who stands for nothing will fall for anything. But even the person who does stand for something – who has the conviction to abide by what he believes is right – will soon discover that not everyone appreciates his commitment to decency.”

I lifted this passage from a book by Harold Sala entitled “Just for Today: Guidelines for Living,” because it reminded me of how difficult it is to do what is right. This is of course particularly true for those working in government who have to live with the old adage “damn if you do, damn if you don’t”.

Sugar Regulatory Administration (SRA) chief and former Negros Occidental Governor Lito Coscolluela faces the same predicament.

Bad people do bad things. So when one goes after crooks, including smugglers, expect the worst possible retaliation.

In Lito’s case, it is believed that the graft charges he is facing before the Office of the Ombudsman and the Sandiganbayan are the crooks’ way of getting back at him for going after sugar smugglers.

Sugar farmers all over the country are steadfast in saying that Lito is far from being a crook.

Federico Locsin III, national president of the Confederation of Sugar Producers Associations (Confed) which is the country’s biggest aggrupation of sugar farmers of more than 20,000 farmers nationwide, says that Lito belongs to a league of his own, being one of the very few government officials who stepped down from power poorer than when he first became government. Lito was governor of Negros Occidental for nine years.

Locsin believes that the negative publicity attacking the character of Lito is being funded by a strong group of individuals involved in sugar smuggling.

He says that the initiatives that Lito took to stop smuggling have incurred the ire of these syndicates and they are now trying to get him out of the SRA so that they can continue their money-making activities. The problem has always been that Lito cannot be bought.

Lito was accused of a case that was filed against him in 2001 and after he proved that he did not benefit from the transaction, the case slept for eight years until it was suddenly revived by the Ombudsman and forwarded to the Sandiganbayan.

Locsin declared the full support of his organization for Lito, saying that he is an honest and upright man and he has worked hard to support the sugar industry.

“We will continue to support him and encourage him to continue his fight against the smugglers who are trying to sabotage the industry. We hope that the public will not be misled by the negative publicity being undertaken by people who want to get him out of SRA,” Locsin adds.

Smart move

Critics are again unduly cashing in on a rice import deal last Dec. to hit Malacañang, the Department of Agriculture and the National Food Authority.

What these critics are missing out on is the fact that because of these imports from Vietnam, the Arroyo administration was able to stabilize supply and prices even at this time – the onset of the traditional lean months of July to September – when retail costs of this food staple normally go up until the start of the main harvest season.

Contrary to their claims of a 40 percent overprice, the FOB price at that time actually ranged from $456 to $459, based on the official records of Thailand’s Board of Trade, which is the international benchmark for rice prices.

The price was the cheapest and best offer at that time –Manila was to pay Vietnam not in cash but on a deferred payment basis of six months – and had actually saved the country roughly P369 million ($7.54 million) in rice imports, because global prices have gone up by the time Hanoi started shipping the stocks to Manila last February.

It must also be stressed that the negotiations were monitored, participated in and approved by the Private Sector Procurement Transparency Group (PSPTG), which is headed by the representative of the Bishops-Businessmen’s Conference (BBC) in this private-sector watchdog.

It was the first time ever in such government-to-government transactions that private-sector representatives were allowed to participate in the negotiations instead of simply observing the talks, in the interest of greater transparency as espoused by the DA and NFA.

During the time that the deal was finalized, the NFA had estimated the price per metric ton of rice in the world market at $555.80, which already comprised the FOB projected price of $491.68 at 25 percent brokens; a processing fee (called quality premium) of $5 per ton; cost of money at $23.70 (computed at 0.9 percent per annum); the projected seven percent increase in world prices in the first semester of about $32, based on the price trend during the last five years; a $35 freight cost; and other expenses such as surveyors costs, bid and performance bonds and fumigation fees computed at $0.42.

Such add-on costs to the actual purchase price are necessary to ensure that huge volume purchases are delivered by the seller to the buyer. The final amount also took into account the deferred-payment arrangement.

Against this $555.80 projected price, the Cabinet Rice Procurement Committee (CRPC) was able to successfully negotiate a reduced contract price of $549.50 per metric ton from Vietnam’s sealed offer of $554 per ton (reducing it by $4.50 for each metric ton), proving that the transaction was a “good deal” considering the volume of imports involved, which was 1.5 million million tons. 

Thus, the Philippine government was actually able to shave off $6.75 million or roughly P330 million from Vietnam’s original offer.

Unlike in other products that can be reproduced again and again, crops take time to be produced, so one has to pay a premium to corner a sizeable chunk of the available supply in the world market. Transactions for rice imports cannot be compared to purchases of, say, rubber prices, in which a buyer can haggle for a discount when buying in bulk or huge orders.

The Philippines could have actually resorted to the usual practice of procuring rice imports through public tenders, but had refrained from doing so to prevent speculative price hikes and market instability as what had happened last year at the height of the rice price crisis.

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