PCC urged to probe rice smuggling

October 05, 2019

The Philippine Competition Commission (PCC) and the Department of Agriculture (DA) recently sealed a partnership to strengthen coordination aimed at ensuring fair competition in the agriculture sector.

PCC Chairman Arsenio Balisacan and Agriculture Secretary William Dar signed the memorandum of agreement (MOA) at the DA Central Office in Quezon City.  Dar said the joint initiative would prioritize the rice industry with the implementation of Republic Act 11203 or the Rice Tariffication Law (RTL). It will also help address ‘unscrupulous’ practices in the agriculture sector that could affect prices and output.

Reports of traders offering to pay as little as P6 per kilo have mobilized government agencies to organize direct palay purchasing efforts in order to establish an effective floor for the market, paying ‘fair’ prices to farmers with government money, in the absence of the private traders from the market.

‘The PCC has the mandate to investigate whether there is unfair competition between and among… players in the rice industry—traders, millers, importers,’ Dar said.

Senator Cynthia Villar, for her part, said ‘now is the chance for PCC to prove that it can file charges against high-profile personalities involved in rice smuggling and manipulation of rice prices.’

President Duterte signed the rice RTL to make the rice farmers become more productive, competitive and prosperous.  Even with the flooding of 3.4 million metric tons of rice by the National Food Authority (NFA) in the market, Dar said ‘we don’t see the outcome or impact of more imports of rice.’

He said that his office is now looking at a list of traders suspected of ‘manipulating’ the release of imported rice in the market.

Republic Act 10667 or the Philippine Competition Act of 2015 prohibits businesses from forging anti-competitive agreements which, among others, restrict competition in price and other components related to the trade.  The competition law punishes those engaged in cartels with a fine of P100 to P250 million and imprisonment of up to seven years.

In the past ten years, government had lost more than P20 billion in revenues due to rice smuggling. From 2002 to 2011, the government lost more than P1.33 trillion in revenue due to smuggling through the country’s ports, according to the Federation of Philippine Industries (FPI).                                                                    

In a 20-page study, the FPI, which groups about 800 companies, said that lost revenues from 2002 to 2008 came up to P889.5 billion, with further losses of P119.65 billion in 2009 and P326.76 billion in 2010 and 2011.                                        

In October last year, Duterte was visibly upset after learning that some 23,015 sacks of smuggled rice seized in Zamboanga City went missing.   Rice smuggling continues amid the government’s effort that even resulted in a congressional inquiry which led to identifying the supposed leaders of a syndicate involved in illegally importing rice into the country.                                                    
 
The House of Representatives said it will look into reports of rampant rice smuggling and the existence of cartels that control the procurement, importation and sale of the basic staple.                                                                                           

In July last year, Villar already asked the PCC and the Department of Justice to sanction at least one rice smuggler so as to set a ‘sample’ to prove that the government is indeed implementing the law on rice smuggling, cartel and hoarding.                                                                                                                    

During a recent Senate hearing, Villar expressed exasperation over the failure to stop cartels and hoarding, which she identified as the ones causing the artificial shortage and high prices of rice and other agricultural products. Our farmers and fisherfolks continue to suffer in poverty while smugglers and cartels continue to enrich themselves,’ Villar said, as she encouraged Dar to implement ‘developmental’ measures to counter the operation of cartels and hoarders by improving the productivity and competitiveness of local farmers.

‘We are pleading to the DoJ and the PCC that they at least do a sample so they can see that we are going to implement the law,’ she dared.                                          

The DoJ indicted suspected rice smuggler Davidson ‘David Tan’ Bangayan and five others, on charges of conspiracy to rig the bidding of rice imports in order to drive the market price of rice in the country.              

In a 14-page resolution dated November 5, 2018, the justice department upheld the findings of the panel of prosecutors where Bangayan acted as a financier of some cooperatives, including dummies, who took part in the bidding of rice imports.  Bangayan was the subject of a Senate inquiry in 2014 over an alleged rice cartel, which manipulated the supply in the country to hike the price of rice in the market.

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