President Marcos must be pretty desperate or naive to think that because confiscated smuggled sugar is now selling at P70/kg at the DA Kadiwa Center, the sugar supply problem is solved or about to be solved.
For one thing, Kadiwa Centers have limited reach. There is a whole country waiting for sugar retail prices to go down. It was still at P110/kg at the Marketplace grocery I visited in Pasig last Holy Thursday.
The President also said we are now closer to the P20/kg price for rice because it is now selling for P25 at the same Kadiwa Center. Whoever told him that fooled him.
Someone visited the Kadiwa Center shortly after the President made the claim and found no rice available at P25/kg. The price range for different rice varieties was from P38-P50/kg.
The President should not indulge in Kadiwanomics because it is unreal. Kadiwanomics is nothing more than an aspiration… more of an easily dismissed PR gimmick.
Finance Secretary Ben Diokno has seen the problem because despite Kadiwanomics, the inflation rate is still being spooked by high food costs. In a briefing last week, Diokno stressed the importance of getting the latest accurate agricultural commodities data to the President.
Diokno has seen how the President is being fooled. So, Ben unveiled a supposed plan to use technology to update the President on food supply and agricultural production every two weeks.
How? Diokno talks of using satellite, Lidar and other technology available to DOST. Diokno said this will provide a better and timely basis for crafting importation initiatives and overall government policy.
Good idea. But Ben already promised to use these technologies when he was Budget Secretary under Duterte. I attended the dinner meeting of the Foundation for Economic Freedom when Ben as guest speaker said he will use satellite, Lidar, etc to monitor progress of Build Build Build infra projects. He said we can even go to a website anytime and see up to the minute progress of BBB construction projects. That never happened.
Ben is always full of enthusiasm on press releases but short on follow up. Besides, I don’t think satellite and Lidar can see through the bodegas of the agricultural cartels to reveal stocks of sugar, rice, etc they are hoarding to jack up retail prices.
What we need is a DA chief who is not part of the so-called DA mafia in cahoots with the cartels. Government must do battle with the cartels or everything is just pa-pogi.
Just to show how powerful the onion traders are, they refused to honor an invitation of a House committee investigating the onion price increases. They all simultaneously sent their lawyers with a letter saying they are sick and are confined in hospitals.
There are reasonable doubts the President is ready to break with the past and deal the trading cartels a death blow. Photo releases showing him with the favored sugar traders, for instance, reinforces the image of a president who is captured by greedy vested interests and so, not ready to fight the evil he must eradicate.
Why did the President allow his alter ego at DA and SRA to make a personal decision to choose the favored traders using no transparent criteria? It would have been better if SRA auctioned the right to import so that there is a level playing field and the government gets some of the windfall profits that is now going only to the pockets of favored traders.
In deciding to sell smuggled sugar, where will the money go? SRA is selling at P70/kg even as it has incurred no cost since the stock was simply confiscated. SRA should sell lower to bring down the over P100/kg current retail price.
Is it possible the SRA entered into a secret agreement with the smugglers to be quiet because they will be reimbursed from the sales proceeds? Is this why the usual procedures on seizure of smuggled items were not followed?
The government should just totally remove all the SRA rules that protect the local sugar industry but are at the expense of the consuming public. It is not just the consumers who suffer. Industries, big and small, that use sugar become less competitive because the domestic sugar pricing is way above the world market. Some have closed down due to lack of sugar and their workers lost their jobs.
The big guys adversely affected by the unfair sugar cartel pricing have written a letter to the President asking for an audience to explain their predicament. This includes Coca Cola, Pepsi Cola, Alaska, Nestle, Monde Nissin and ARC Refreshments Corporation. They represent over 90 percent of industrial users of refined sugar, contributing in excess of P40 billion in taxes yearly.
In their letter to the President, the industrial users noted, “the country’s sugar supply depleted further, with demand far outpacing domestic supply. The surge in prices have continued unabated, with imported sugar being priced with an 80 percent markup from landed cost, and retail prices having soared at P70/kg. Further, we have received reports of outright refusal on the part of some traders to provide price quotes for industrial buyers.”
The industrial sugar users expressed concern that “the absence of adequate sources of domestic sugar in the market places our businesses in peril. It is imperative we prevent another sugar supply crisis and stabilize the sugar prices…”
They appealed to the President to “allow industrials to directly import premium refined sugar to address the shortage of supply and stabilize the domestic prices of sugar… we also propose that importation be used to create a buffer stock for at least one quarter. Finally, to stabilize local pricing, and control inflationary consequences, prices for imports for sale in the Philippines should be pegged closer to world market prices.”
The sugar barons say they need special treatment to protect jobs. Not true. Only their bank accounts are protected. But more jobs are put at risk if the MSMEs and big industrial sugar users continue suffering supply and price problems arising from government protection of the sugar industry.
The President must not be a captive of vested interests and must decide in favor of the greater good of the country.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on Twitter @boochanco