Agriculture Senior Undersecretary Domingo Panganiban on Tuesday told a Senate hearing that President Ferdinand Marcos Jr. ordered the importation of sugar “through selected importers.”
But when pressed repeatedly by senators, Panganiban backtracked and clarified: “Let’s import. Yan lang ang sinabi sa akin (That’s only what he told me).”
Executive Secretary Lucas Bersamin, who was present in the same hearing, told senators he was the one who approved the importation as the President was busy at a foreign trip at that time.
“There was guidance from the President. But I confirmed that I was the one who instructed Usec. Panganiban to proceed with the processing of the sugar order and to attend to this issue of importation,” said Bersamin.
In a news briefing after the hearing, Sen. Francis Tolentino noted that Panganiban already made the clarification, which was supported by Bersamin.
A former Chief Justice, Bersamin also said the sugar import from Thailand that entered the country last March covered by Sugar Order No. 6 “was legitimate and fully authorized by the government.”
President Marcos directed the importation of sugar to arrest its high cost in local markets after he was told of a “sugar inflation.”
Repeatedly confronted by opposition Senators Risa Hontiveros and Aquilino “Koko” Pimentel III on his earlier statement about the President telling him to import through “selected importers,” Panganiban insisted Mr. Marcos merely said, “Let’s import.”
Testifying to the Senate for the first time, Bersamin stressed nothing irregular in the most recent sugar importation, nor there was an effort for cartelization.
“This was undertaken by the government to address inflation in the months leading to January 2023. The administration made sure that there was buffer stock as a measure to regulate price increases. In a large way, the objective was realized,” Bersamin said.
He said the 440,000 metric tons of imported sugar under SO6 was legally covered by a presidential directive.
The Executive Secretary explained there are at least four ways of legally importing sugar, and an order from the Sugar Regulatory Authority (SRA) is just one of them.
The three others are the use of Minimum Access Volume (MAV) program, the provisions of the Price Act, and a direct order from the President.
Bersamin noted that this is the case in the 440,000 MT of sugar from Thailand branded by Hontiveros as smuggled.
“Subsequently, the SRA issued SO No. 6 to cover this importation so that there will be proper documentation that would allow the Bureau of Customs and other concerned agencies to process and release the shipments,” said Bersamin.
He also said the President issued the directive to import sugar in a meeting with DA officials. Following that, Bersamin said he issued a memo on January 13 and ordered the DA to implement its recommendations to the President on the 2nd Sugar Importation Program for the Crop Year 2022-2023.
He emphasized that Panganiban acted upon his orders.
“Neither was there any violation committed by any of the parties who are involved in these questioned transactions, and that new policies are probably needed to avoid confusion in importation procedures.”
Bersamin also denied rushing the importation or favoring certain traders. He said the three sugar importers were selected from among seven companies shortlisted.
In the same hearing, sugar traders who were accused of carrying out the so-called “government-sponsored smuggling” also explained there was no irregularity in the importation because taxes and duties were paid for the imported sugar.
Michael Escaler, CEO of All Asian Countertrade — one the three importers referred to in the hearing — said he built a world-class Philippine trading company that helps small farmers.
“All Asian Countertrade is the largest buyer of sugar from Filipino farmers. It balances its earnings from the high prices of domestic sugar and the relatively low prices of international sugar,” he said.
“We need to keep local sugar production viable. We import sugar only to fill the gap that the domestic industry cannot supply. Strengthening local sugar production is key to the country’s food security,” Escaler said.
Meanwhile, Bersamin related that the SRA became part of the sugar importation regulation process in 2002 when a memorandum order expressly stated that no sugar will be imported without an SRA clearance.
Those without an SRA clearance will be referred to the Bureau of Customs for duties and charges, while SRA will perform market classification for its disposition pursuant to rules and regulations, the Executive Secretary said of the process.
“That’s why a sugar order is not needed prior to importation,” Bersamin said.
Socioeconomic Planning Secretary Arsenio Balisacan and Trade chief Alfredo Pascual said they have established that the “tight” supply of sugar has been driving its price up since last year.
Balisacan said that he has flagged the President and the Cabinet on the rising price of sugar since June last year, and recommended among others, the immediate importation of 150,000 metric tons of sugar.
Balisacan told the Senate committee that NEDA provides the President with memoranda and technical reports on inflation and identify commodities contribute to inflation. He said he noticed that higher prices for sugar began in June.
He described the sugar inflation as “very alarming.”
“Tight supply is the one driving the elevated prices,” Balisacan said.
The NEDA chief said he suggested the formation of an inter-agency committee on food inflation and market outlook that would include NEDA and the departments of Agriculture, Finance, Budget and Management, and Trade and Industry.
Balisacan said the proposal for longer-term solutions to food inflation has been approved in a Cabinet meeting.
He said the inter-agency committee would provide “ex-ante analysis on the demand and price situation” as well as “policy decision on critical matters.”
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