Palace: Sugar imports aboveboard

February 23, 2023
The Philippine Star|

MANILA, Philippines — There were no irregularities in the government’s importation of some 450,000 metric tons of sugar before the Sugar Regulatory Administration (SRA) issued Sugar Order No. 6, Malacañang officials clarified yesterday.

At a press briefing at Malacañang, Department of Agriculture (DA) Senior Undersecretary Domingo Panganiban said he considered the memorandum issued by Executive Secretary Lucas Bersamin dated Jan. 13 as a “sugar order” to proceed with the importation to augment the country’s tightening supply of the commodity and prevent price surges.

“In response to the directive of the President to address inflation and create a buffer stock and given that sugar is one of the components of most commodities that drives the consistently high inflation rate, I acted with haste and interpreted the memorandum issued by the Office of the Executive Secretary as an approval to proceed with the importation,” Panganiban said.

“With the urgency of the situation, I instructed three capable and accredited companies to proceed with the importation of sugar, provided that they agree to reduce the prices of sugar, sell the commodity at a price that is commercially acceptable in the market and that they will shoulder the cost of warehousing,” he added.

Panganiban’s statement came after Sen. Risa Hontiveros urged the Senate Blue Ribbon committee to investigate what she called a “government-sponsored” smuggling of 260 containers of sugar, which she said arrived at the Batangas port around two weeks ago.

At a press conference last Tuesday, Hontiveros said Panganiban allegedly instructed the allocation of 100,000 MT of sugar to Sucden Philippines Inc., another 100,000 MT to Edison Lee Marketing Corp. and 250,000 to All Asian Countertrade.

In his memorandum, Bersamin ordered the DA to implement its recommendations to Marcos, who concurrently heads the agency, on the second Sugar Importation Program for Crop Year 2022-2023.

The memorandum stated that around 100,000 MT of sugar “shall be automatically classified as ‘B’ or ‘domestic sugar’ while a total of 350,000 MT shall be made available to the domestic market or otherwise designated.”

“Relative thereto, the DA is hereby directed to implement the above-mentioned recommendations, to ensure adequate supply of sugar in domestic markets, reduce prices and manage inflation, subject to compliance with Republic Act 10659 or the Sugarcane Industry Development Act of 2015, its implementing rules and regulations and other relevant laws, rules and regulations,” the memorandum read.

Panganiban said he selected from the list given to him the three sugar importers, who he considered “the most capable importers that we have.”

He added that Marcos was aware and “was properly informed” when the imported sugar was shipped to the country last Feb. 9.

The SRA issued on Wednesday last week SO 6, which allowed the importation of 440,000 metric tons of refined sugar.

Hontiveros, however, said that the earliest date for sugar imports to enter the country is March 1.

The senator showed a letter from Agriculture Assistant Secretary James Layug addressed to newly appointed Bureau of Customs (BOC) chief Bienvenido Rubio, flagging sugar shipments by All Asian Countertrade.

In Layug’s Feb. 13 letter, he raised to Rubio the sugar shipments aboard three vessels, which he said were “allegedly non-compliant with importation requirements of agri-fishery commodities, particularly sugar, under the Anti-Agricultural Smuggling Act of 2016.”

Office of the Executive Secretary Undersecretary Leonardo Roy Cervantes yesterday said that when they were made aware that the shipments had arrived, the SO was already signed by the SRA, but it was still with the OES “so it’s just a matter of fulfilling the requirements of the BOC.”

“So we meant that sugar order that is being processed in our office to be the one in compliance with the directive of the executive secretary, which is contained in this memorandum from the executive secretary dated Jan. 13,” Cervantes told Malacañang reporters.

Asked whether the importation followed legal processes and there were no violations, he responded that “as far as we are concerned, the OES, because we were processing at that time a sugar order that was signed by the SRA members and we had to do a (complete staff work) on that one for approval of the President, then you know it was in order that was this memorandum, the directive of the President.”

Probe pushed

Hontiveros earlier called for a Senate investigation into reports of the entry of 20-foot shipping containers of sugar into the country last week, ahead of the issuance of SO 6, saying the shipments should be considered smuggled and confiscated.

Hontiveros filed Senate Resolution 487, which directs the Senate committee on public accountability and investigation to conduct an inquiry, in aid of legislation, into the alleged sugar shipments that arrived in Batangas last Feb. 9.

“(About) 260 containers… The latest that we know is the one that appeared in the news, but based on these documents that I am sharing, they should be considered smuggled and confiscated. Investigate and prosecute those who imported it earlier than the date of application and especially before the date of award of allocation,” Hontiveros said in Filipino.

She added that the investigation would also cover the possible provisions of SO 6 that may be open to abuse, patronage and cartelization.

In her resolution, the senator noted that sugar shipments in 260 20-foot containers arrived at the port of Batangas on Feb. 9, with the consignee bearing the name of All Asian Countertrade Inc., aboard three vessels and using three shippers, according to independent sources and as reported in the media.

“What should be the subject of the investigation ... is who could be behind the three importers, whether politicians or non-politicians,” she said.

Last Feb. 15, the SRA issued SO 6, which allows the importation of 440,000 MT of sugar.

The SO stated that the SRA shall only begin accepting applications for five calendar dates from the date of effectivity of the SO, which is Feb. 18, and shall only be awarding allocations for five calendar days after the last day of receiving applications.

“Going by the timelines in the issuance, the earliest date to bring in imported sugar under SO 6 is March 1,” Hontiveros said.

She added that many players in the sugar industry also raised equity and fairness issues in SO 6, including how the DA can approve seemingly any amount of allocation without any restriction – no criteria, no ceiling and no formula with which to determine how allocation is given to each importer.

“According to the same insiders, there are, in fact, already three identified importers… and at least two of the importers have purportedly received, as early as Jan. 13, letters from the DA granting them authority to import sugar in specified quantities, even if the mandate to authorize sugar importation is with the SRA,” the senator said.

“Even more concerningly, SO 6 even grants unprecedented discretion to the DA to waive the payment of performance bond on grounds that are broad and subject to generous interpretation,” she added.

For Hontiveros, there is a need to investigate exactly how sugar shipments were allowed entry into Philippine ports without an SO and to identify gaps in policies that need to be addressed to effectively curtail agricultural smuggling and the smuggling of regulated commodities like sugar.

Meanwhile, Hontiveros’ call for the Senate Blue Ribbon committee to conduct a probe on what she called “government-sponsored” sugar smuggling may get the support of Negros Occidental Gov. Eugenio Jose Lacson only if supported by strong evidence.  – Cecille Suerte Felipe, Gilbert Bayoran