Break-in at the value chain

Late Wednesday afternoon, Press Secretary Trixie Angeles issued a brief statement to belie a reported go-signal to import 300,000 metric tons (MT) of raw and refined sugar. In a full blown press conference at Malacañang Palace the next day, Angeles released copies of official documents on the reported authorization to import sugar but none showed any signature of President Ferdinand “Bongbong” Marcos Jr., PBBM for short.

Since PBBM is the concurrent Department of Agriculture (DA) Secretary, naturally, he should be the final approving authority. After all, the Sugar Regulatory Administration (SRA) is one of the attached agencies under the DA and the Secretary sits as board chairman of the SRA. The President though delegated the day-to-day control and supervision of the DA to one of his deputies, Undersecretary for Operations and concurrent chief of staff Leocadio Sebastian.

It all began when the news came out on Sunday quoting SRA chief Hermenegildo Serafica that the DA and the SRA are looking to import 300,000 MT of sugar products purportedly to augment the projected domestic supply gap from production and millers. Then on Wednesday, copies of SRA Resolution No. 4 were posted on the SRA website, with Sebastian’s signature approving it “for and in behalf of the President.”

By Thursday, Sebastian submitted to the Office of the President his letter making his “offer of apologies” and “offer to be relieved” from all his delegated duties. In making both offers, Sebastian cited: “I take accountability and responsibility for its consequences.”

The SRA-approved authority to import sugar products was first raised to public knowledge by Albay Rep. Joey Salceda. In our weekly Kapihan sa Manila Bay news forum at Café Adriatico in Malate last Wednesday, Salceda cautioned the government to slow down in importing sugar because it could impact on the prices of this basic commodity.

“Of all the agricultural products, sugar is the most labor intensive. If you allow the entry of 300,000  (metric tons) of sugar, prices may drop,” Salceda warned. For the past few months, the country’s sugar sector reportedly missed production targets due to weather disturbances, high farm input costs, and delayed order to import the sweeteners as alternative to sugar.

Was it gut feel? Or A-1 economic intelligence information at work?

Acknowledged as the resident economist at the House of Representatives, Salceda reminded government authorities there are other means to address projected shortage of supply of both raw and refined sugar. For one, Salceda underscored “the need for demand management” that could be implemented to mitigate, if not avert supply shortage of sugar requirements of the country.

Long before the controversial SRA No. 4 Resolution came out, I teased Salceda for coming out with what seemed to be a trivial call to impose a “ban” on the sale of soft drinks in school premises all over the country. With the school children returning to face-to-face classes starting next week, Salceda issued this call to all the concerned national and local government agencies.

The proposed “ban,” he pointed out, will save our children from “unhealthy” effects of too much sweet and sugar intake. He cited sugar comprises 80 percent of softdrinks content. Too much intake of sweet and sugar-rich foods is the leading cause of diabetes – precursor of the deadly kidney failure and its other related illnesses.

As chairman of the House ways and means committee, Salceda conceded that the tax imposed on all “sweetened” products apparently had little effect to influence cutting down consumption of these products despite its inherent health issues. On economic point of view, Salceda explained, the proposed measure could at least make a dent and ease pressure on demand side for sugar. As major user of sugar, producers of soft drink products have been asking the government to be allowed direct importation of their sugar requirements.

Granting there is indeed a looming sugar supply shortage, Salceda suggested the formation of a “working group” to track the imported sweetener “High Fructose Corn Syrup.” According to him, this will be comprised of the Department of Finance, the Bureau of Customs, the Bureau of Internal Revenue, and the Food and Drug Administration (FDA). As Salceda proposed it, this group will be tasked, among other things, to ensure that import volumes “make sense” with the tax payments of beverage manufacturers on sweetened beverages.

“I expect higher revenues from sweetened beverages as a result of this temporary shift, and those revenues can be used to enhance the domestic sugar industry,” Salceda pointed out.

Meanwhile, Sebastian’s resignation letter to PBBM strongly indicated he is not quitting without a fight. He pointed to unnamed “moving forces” behind the botched SRA sugar import. Whether new or old, two-legged shadowy, sinister creatures also walk in the so-called “Palace snake pit.”

As of this writing, there were no official words yet if PBBM accepted Sebastian’s resignation pending completion of the Palace investigations on all those involved in the SRA import mess. The Press Secretary – who is also a lawyer – cited though Sebastian’s resignation does not exculpate him from whatever liability he has to account for later on.

PBBM has maintained that “imported inflation,” or external factors have fueled much of the rising prices here of basic goods and commodities. For one, the global impact of the Ukraine-Russia war has seriously affected the Philippines because of too much dependence on importations from gasoline and other refined petroleum products to food stuffs such as rice, sugar, pork and chicken meats.

But for now, the policy direction of the present administration looks at importation as last recourse of timely intervention for any supply gap situation. PBBM has vowed his administration would be guided by the entire value chain in the country’s agriculture.

Then somebody, or some quarters tried to make a fast break-in from the value chain. But their hands got caught in a cookie jar.