As I See It

Tariff on flour will protect a dozen rich families

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09:00 PM August 6th, 2013

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By: Neal H. Cruz, August 6th, 2013 09:00 PM

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.

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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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