As I See It

Tariff on flour will protect a dozen rich families

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The guests at last Monday’s Kapihan sa Manila at the Diamond Hotel were Sen. Chiz Escudero and Ric Pinca of the Philippine Association of Flour Millers (Pafmil). Escudero talked about the hated pork barrel and how to stop the theft of taxpayers’ money by members of Congress, other government officials, and their cohorts.

According to Escudero, theft is very easy because of lump-sum appropriations. He wants to go back to line-item budgeting, which means that every project and the appropriation for it will be itemized in the national budget. Not spending money for the projects for which it is allotted will be a violation of the law and subject to sanctions. In the present system of lump-sum appropriations, the agency head has the discretion to spend the money any way he wants to. And that is how money intended for certain projects end up in the bank accounts of bogus nongovernment organizations and in the pockets of crooked government officials.

So far, the pork barrel disguised as the Priority Development Assistance Fund and the budgets of the Department of Agriculture and of the Department of Agrarian Reform have been exposed as the biggest sources of graft and corruption.

A number of government officials are being tried (notably former Agriculture Undersecretary Jocelyn Bolante for the P728-million fertilizer scam) or are facing administrative and criminal charges. The other day Lanao del Norte Rep. Abdullah Dimaporo, a former agrarian reform secretary, was served an arrest warrant at his hospital suite. He is accused of graft and malversation of public funds in connection with the purchase and alleged ghost delivery of 10,000 bags of fertilizer worth P5 million to an NGO in 2004. The NGO was organized by Dimaporo himself in 1994.

Senator Escudero—who, from his looks, appears to be really and hopelessly in love—said that if projects to be funded by the pork barrel were itemized in the budget, it would be easy to determine if the funds were spent for the purpose for which they were appropriated.

He is also in favor of a Senate inquiry into the involvement of senators in the alleged pork barrel scam—a proposal that is being opposed by Sen. Alan Peter Cayetano, the blue ribbon committee chair, who said that senators investigating their colleagues can be a “very emotional” activity.

But I agree with the proposal of Escudero (and also of party-list Rep. Jonathan de la Cruz) to go back to line-item budgeting. When the shift was made to lump-sum appropriations, graft and corruption increased dramatically. There was also no pork-barrel allocations in the earlier national budgets. The pork barrel is a fairly recent invention by politicians; it is why scores of fortune-hunters, including party-list nominees, want to become members of Congress.

The Department of Budget and Management claims that line-item budgeting will entail a budget proposal several feet thick. So what? The money spent for the extra paper will be much, much less than the money lost to graft. And I think the DBM’s protest is caused by laziness. It does not want to work harder for the more voluminous line-item budget.

Along with line-item budgeting, I also propose that we go back to the preaudit of projected government expenditures instead of the present postaudit. In preaudit, the Commission on Audit checks the proposed expenditures on government projects and agencies before these are spent. In the present postaudit system, by the time the COA inspects the books and finds irregularities, the deed is done and the money has been spent.

And don’t forget the congressional insertions. These are additional pork barrel funds hidden in the budgets of line departments. Some members of Congress, especially members of the appropriations committees, will insist during budget deliberations that in exchange for approving the budget of a department, they be given the discretion to determine how and to whom a part of certain appropriations will be spent. This practice works in the same way as the pork barrel: The money goes to favored contractors and suppliers who gratefully kick back some of the loot to the congressmen or senators.

* * *

Pafmil’s Ric Pinca got the tougher questions during the Kapihan forum. He tried to defend the clamor of flour millers to impose tariff on imported Turkish flour which is cheaper than what our flour millers sell. The bakers say this will increase the price of bread, especially pandesal and “Pinoy Tasty” sliced bread.

A tariff on a basic food source like flour is protectionism. The whole world is abolishing protectionism yet here we are, still wanting to impose a tariff to protect another import, wheat.

A protective tariff on Turkish flour will not protect any Filipino farmer. We do not grow wheat; we import it. It will protect only the dozen or so flour millers who import the wheat grains, mill these into flour, and sell it to bakers.

The cheaper Turkish flour is baked into the pandesal and bread loaves consumed by poor Filipinos. A tariff on Turkish flour will increase the price of bread. It will make the dozen rich families who control the flour milling industry very happy, but will burden the millions of Filipino pandesal eaters.

What percent of the Philippine flour market does Turkish flour share? Pinca was asked.

Answer: 10 percent.

Only 10 percent! That means the local flour millers have 90 percent of the market. And they are still complaining?

Whom should the government protect, the dozen rich flour-milling families or the millions of pandesal-eating Filipinos?

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  • tadasolo

    Mr. Cruz now you finally have open your eyes on why tariff and the 40/60 provisions of the constitution only protects a few rich Filipinos and penalizes the poor Filipino. What do those rich do with the money earned, they do not reinvest it to improve and compete and employ Filipinos but spend it abroad?

    • koolkid_inthehouse

      money laundering.

  • vaporub123

    takot si mr. peter cayetano na baka pati baho niya mailabas sa pork barrel imbestigasyon?

    • Scorpio15

      Bakit meron bang mangyari pag sarili nila ang magka imbistigahan?

  • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

    Tariff on flour will protect a dozen rich families?

    San Miguel Mills owned (of SMC, Inc)
    Philippine Foremost Flour Mills (of Uy / Uygongco of Panay & Negros)
    Universal Robina Corp (of Gokongwei)
    Wellington Flour Mills (of Ty family of Metrobank)
    Liberty Flour Mills (of William Uy family?)
    Morning Star Milling Corp.
    General Milling Corp. (of Uytengsu family, former majority owner of Alaska)
    Pilmico Foods (of Aboitiz Family)
    RFM Corp. (of Concepcion family)

    • Eustaquio Joven

      Didn’t I tell you before? EDSA 1 toppled a dictatorship to restore oligarchy.

      • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

        Indeed you did. From postwar oligarchy with diffused power to Martial Law with centralized power under Marcos to EDSA1’s restoration of the oligarchy.

      • Eustaquio Joven

        Now, what? Shall we simply grunt and bear it, migrate to other countries, join the NPA or Bangsamoro, or commit hara-kiri? Mabuhay. Cheers.

      • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

        I’m already shuttling between countries. Might settle outside of the country for good one day. Mabuhay ka Kapatid! Cheers!

      • koolkid_inthehouse

        Leave the the poor dumb donkey Filipinos?
        You two are not patriotic. Calling DOJ to use ANTI-MONEY LAUDERING to check the assets of these two.

      • Eustaquio Joven

        Hahaha. That’s a kool one, kid.

      • Antenor F Cevallos

        Sige, ikaw, lumayas ka. Ako, maganda ang buhay ko rito. Gusto kong umalis ang mga tulad mo, para wala akong ka-kompetensya.

    • Antenor F Cevallos

      E ano ngayon kung 12 rich families? Pinoy sila, di ba? Hindi mahalagang magdusa ang mga pangkaraniwang mamamayan. Lagi namang nagdurusa yang mga yan, e. Mas importante, matulungan ang mga Pinoy businessmen.

      • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

        Hindi mo naman pala naintindihan eh. Kung papatawan ng taripa ang harina na magmumula sa Turkey, mas tataas pa ang presyo ng tinapay, biskwit at mami para sa mas nakararaming Pilipino. Pero kung hindi papatawan ng taripa, mananatili ang kasalukuyang presyo. 10% lang naman ang saklaw ng harinang turko sa ating merkado, hindi naman kalakihan. Ang gusto kasi ng mga dambuhalang pamilyang nabanggit ni Neal ay angkinin pati ang natitirang 10% ng merkado para sa sarili nila. Samakatuwid, angkinin ang buong merkado 100% para sa sarili nilang kapakanan.

        At isa pa, hindi naman nagtatanim ng wheat ang Pinas. Lahat naman yan ay inaangkat din lang ng mga flour millers. Wala namang magsasakang Pilipino ang makikinabang sa panukala ng mga dambuhalang pamilyang nabanggit ni Neal.

        Basa basa muna kapatid, bago humirit. Napaghahalataan ka.

      • WeAry_Bat

        For instance, mangoes and tamarind. They are mostly likely to face tariff if imported from other Asian countries, because there are existing industries in the Philippines.

        Probably one reason why any provincial product becomes costly is because transporting them within the Philippines is costlier than if they were shipped out then shipped back in. But that is another topic…

      • magiting78

        Hndi sila Pinoy mga intsik switik….lol

    • manufacturer2

      nakalimutan mo ang Philippine Flour Mills ng Puyat-Reyes family

      • http://www.yellowmythbusters.gov.ph/ Weder-Weder Lang

        Thanks for that.

  • Eustaquio Joven

    Lump-sum appropriations vs. line-item budgeting. It was hardly a fight. Who would dare openly oppose sanity? Line-item budgeting won. The venue was Congress. Then, while everyone was asleep DBM by itself restored lump sum appropriations. Why? Is the DBM more powerful than Congress? Who needs PDAF when the whole budget itself is PDAF? Answer: Gluttons. The culprit: our idol, no less. PNoy. Or is he only an unwitting beneficiary?

  • farmerpo

    ‘According to Escudero, theft is very easy because of lump-sum appropriations’
    Theft, best word ever delivered. Now we are talking chiz.. Call a shovel a shovel. At last, you said what you know, now tell us who you know, who the thieves are. Then run for President in 2016. You have a ‘probable vote’ here. Pave the road to the presidency by helping clean out the dirt in the legislature. Be a legislator and not an contractor or compromise agent.

  • WeAry_Bat

    The most likely candidate for Joker in a film, I had long guessed to have aspirations in being president. When I looked at his political history years ago, he was one of the few remaining of a pack of young hounds which had shredded someone’s political career.

    But I am not quite sure about that as I looked at his wiki, it has been sanitized already. Thankfully, my memory returned…But this was a different matter…Something which will should haunt him and Sen. Sotto, one of the albatross in their necks which should keep them flying any higher…

    Commission on Appointments and Jesse Robredo.

  • Fulpol

    who are the flour millers??

    the oligarchy…

    they control the regulatory power of the gov’t..

  • Tommy

    I don’t necessarily disagree with most of this, but…

    ‘The whole world is abolishing protectionism yet here we are, still wanting to impose a tariff to protect another import, wheat.’

    The world really isn’t. Countries SAY they are, and organizations such as the WTO are certainly pushing for an end to things like tariffs, but at the same time protectionism is still rampant in the form of government subsidies and tax breaks.

    Even just the Turkish flour mentioned here is to a significant extent subsidized by the Turkish government, giving Turkish flour growers an (arguably) unfair advantage over competitors.

    End of the day, there’s a balance that has to be struck between free trade and ensuring the survival of local industry. I agree that in this case the calls for protectionism are unwarranted, but dismissing protectionism out of hand is ridiculous,

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