President Marcos’ warning during his second State of the Nation Address in 2023 that the days of smugglers, hoarders, and manipulators of the prices of agriculture commodities were numbered seems to be paying off after the Philippine Competition Commission (PCC) earlier this month said charges will be filed against 12 onion importers and traders accused of colluding with each other to lock out competition and control as much as half of the market, thus artificially inflating onion prices that hit a record high of P700 a kilo in 2022.
In an Aug. 13 memorandum to the President, the PCC said there was evidence that these 12 companies and individuals involved in onion importation and trading divided among themselves the sanitary and phytosanitary import clearances (SPSICs) issued by the Department of Agriculture (DA)-Bureau of Plant Industry and the import volume among themselves.
“By agreeing to allocate SPSICs and divide among themselves the actual volume of imports, respondents effectively controlled more than 50 percent of the volume of onions imported into the Philippines during the relevant period,” the PCC said, adding this is penalized under Section 14(b)(2) of the Philippine Competition Act (PCA).
Hefty fine
The PCC also found evidence that the 12 companies and individuals “colluded to lessen competition in the market.” This means that instead of competing against each other to provide the market with the lowest possible price for the imported onions, they “shared, exchanged, and discussed sensitive business information such as price, suppliers, customers, volume, shipping, distribution, and storage,” enabling them to set a higher price and, ergo, more profits at the expense of hapless consumers.
Indeed, by “restricting or distorting competition,” which ensures that the market gets the best quality products at the best price, these companies and individuals resorted to cooperation for their own benefit.
The PCA’s Enforcement Office has thus recommended that these unscrupulous firms and individuals be slapped a hefty fine of P2.4 billion, in hopes of sending a strong message that the government was serious about ridding the market of these profiteers, hoarders, and price manipulators that are distorting prices of basic goods.
While filing charges is laudable, it is not enough. The administration must do more to sustain the campaign and bring an end to smuggling and profiteering.
Collusion from within
It must consistently apply the law and run after those who are manipulating the prices of other heavily consumed agricultural commodities, from garlic to pork, chicken, and beef. This way, the message that price manipulation will not be tolerated by this administration will sink in. These actions are especially important since the Marcos administration has resorted to more imports to temper inflation.
The DA should review its rules to check for patterns of possibly the same importers cornering too big a slice of the market to influence prices. Having the same names ending up with the clearances should spur the DA into checking its own bureaucracy and determine possible collusion from within.
At the same time, it should strengthen market surveillance to determine if market prices are not behaving as they should.
This way, prices of commodities — not just onions — can already be investigated way before they hit record highs for obviously there are manipulators and traders driving up the prices just to fatten their wallets. The farming sector had blamed the DA for failing to make accurate supply estimates and resisting imports, after onion prices hit as high as P700 a kilo between the latter part of 2022 and the early months of 2023. Agriculture officials also suspected internal price manipulations of skyrocketing onion prices.
Not mere lip service
Complementing these actions is the immediate passage of the amended Anti-Agricultural Smuggling Act, which is already among the priorities of the Legislative-Executive Development Advisory Council for the current year.
The bill seeks to include the acts of hoarding, profiteering, and cartel of agricultural products on the list of crimes involving economic sabotage, punishable with life imprisonment as well as a fine equivalent to thrice the fair market value of the goods.
Sen. Cynthia Villar, chair of the Senate committee on agriculture, food, and agrarian reform, emphasized in 2023 that the law needs to be passed as the current law has not lived up to its promise, nor has anyone ever been convicted since the law was enacted in 2016.
But aside from putting more teeth to the laws, expectations are high that successful prosecution of smugglers will follow and eventually lead to putting them in jail. This will prove to one and all that the President’s promise is not mere lip service but meaningful action to make a real impact on the market and alleviate the sufferings of the people.