April 17, 2026
Opinion Article
IN a piece that I wrote for this paper almost three years ago, titled “Revisiting the Sugar Saga,“ I described how a state-sponsored cartel-like operation was involved in the importation of 440,000 metric tons (MT) of refined sugar from Thailand.
Before sugar importation is done, a certificate of necessity to import (CNI) from the Sugar Regulatory Administration (SRA) is required. The CNI is supposed to be issued after an SRA supply and demand analysis shows that a sugar shortfall exists, identifies the supply gap and specifies the volume to be imported. That certification was absent when the Department of Agriculture (DA) announced the approval of the 440,000-MT sugar importation in 2023.
Then-senior undersecretary Domingo Panganiban said that the DA had selected the three “most capable importers” to bring in the volume as quickly as possible to drastically reduce sugar prices and help tame sugar inflation. He predicted that once the imports arrived, prices — already at over P100 per kilo — would hover between P80-85.
The intention seemed noble: helping already hard-pressed consumers. But here’s the catch. Refined sugar prices in Thailand were only around P25-30 per kilo. Even with a five-percent tariff (lower by virtue of Thailand being a member of the AFTA), the landed cost of sugar from Thailand was just around P40 per kilo.
Sold locally at P80-85 per kilo, that was a hundred percent profit for the extremely lucky traders who were rewarded the import allocations. Multiply 440,000 MT by 1,000 kilos per MT and the product by P40 per kilo, that means a staggering profit of around P16 billion for just a single transaction.
The problem is that this kind of arrangement does not only apply to sugar. Most of our agri-food imports such as vegetables, meat and fish need to be issued CNIs before importation can be made. Also, importers are required to secure sanitary and phytosanitary (SPS) certificates, a document guaranteeing that the product is safe for human, animal and plant health.
Rice imports do not require a CNI (though an SPS still applies) as a result of the liberalization of rice trading under the Rice Tariffication Law (RTL). Under the RTL, the government is only allowed to import rice when there is an emergency, which warrants the issuance of the certification.
This is partly the reason why the Federation of Free Farmers (FFF) is complaining that the government is committing an illegal act by using Planters Products Inc. (PPI) and Food Terminal Inc. (FTI) as to import rice. Besides the absence of a certification that an emergency situation existed, PPI was able to import rice directly from India. Which further raised the curiosity of the FFF because of the company's current financial position.
The FFF declared that PPI did not have the financial capability to import as it is basically insolvent. Did it borrow money from government financial institutions, such as the Land Bank of the Philippines or the Development Bank of the Philippines, to be able to procure massive volumes of imported rice? There is no record that it did. If so, who is providing the financial resources? Is there a group of big traders providing the money?
Which brings us to the second set of questions. If PPI is able to get hold of cheaper rice imports, how will it dispose of them? Will the National Food Authority (NFA) buy the rice at a higher price to ensure profit for PPI? If this is the arrangement, what happened to the RTL provision that stipulates that the NFA can only procure rice from local farmers for buffer stocking for emergency purposes?
Moreover, why will the NFA (a government-owned and controlled corporation or GOCC) buy rice from PPI (another GOCC) at a profit? It is practically double-dipping: profit is derived by a government agency (PPI) from another government entity (NFA), which does not make sense unless the funds used by PPI to import are actually sourced from big traders.
The sugar and rice importation episodes unequivocally demonstrate that whenever government imposes regulation, it opens the opportunity for some smart individuals to engage in rent-seeking. Commissions can be derived at every stage of the import process flow from securing a CNI and obtaining SPS certificates to cornering import allocations and the multi-layered logistics in handling and marketing the product.
This is the obvious reason why bureaucrats and politicians backing them hate liberalizing importation of agri-food commodities. Doing so will lead to a loss of many income-generating activities on top of losing control and power.
Thus, if any proposal to lower tariffs during this emergency situation is made to enable the country to stockpile food, bureaucrats will simply resist it. Or they will offer an alternative that retains their power and control and their opportunity for rent-seeking. Instead of a significant reduction in tariffs, they will opt instead to raise the minimum access volume (MAV) out-quota. A product under the MAV out-quota has a lower tariff than the usual rate imposed by the government.
But adopting this counter-proposal will allow bureaucrats to exercise control over the amount of imports that will come in, determine who will receive the import allocations, and continue their rent-seeking activities.
It is indeed a tragedy that while Filipino consumers, particularly the poor, are suffering from high prices as a result of the conflict in the Middle East, some of our officials and private traders are focused on generating windfall profits for themselves instead of alleviating the pain of the people.
Fortunately, there are only a handful of them. It is up to us, the vast majority of the Filipinos and people of goodwill, to bind ourselves together to stop their conspiratorial greed. As Leo Tolstoy wrote, “Since corrupt people unite amongst themselves to constitute a force, then honest people must do the same!”
fdadriano88@gmail.com