Is there a ‘virus’ causing high prices?
It’s been six months since the price of onions has started its climb to record levels, and our government is still in the dark as to what or who is definitely causing the spike. The cacophony of reasons offered by our leaders include shortage in local production, inadequate importation, hoarding, and smuggling.
The price of onions started going up a month after President Marcos Jr. assumed the presidency. Records of the Department of Agriculture show that the per kilo price of onions went up from P90 on July 1, 2022, to P140 on Aug. 1, 2022, an increase of 64 percent. It steadily rose until it scandalously reached P700 during the holiday season last December. This was a whopping 700 percent increase since the Marcos Jr. administration assumed power. In January this year, the price has hovered between P350 and P500, or 400 percent to 550 percent higher, still a huge surge compared to prices on the day Mr. Marcos took power.
Per records of the Philippine Statistics Authority office, we have perennially been having a shortage of local supply. For the period from 2019 to 2021, our local supply shortage ranged annually from 36,000 tons to 48,000 tons. Thus, there’s historical basis for our government to anticipate the amount of importation needed that will balance the contrasting interest of our onion farmers and our consumers. If the reason for high prices is due to inadequate importation, it points to gross lack of foresight of the ruling administration. If the inadequacy is intentional, however, a despicable crime is being committed against the people.
As it is, however, the shortage in total supply has not been very big as to be the cause of the massive increase in prices. For 2022, the shortage in our total supply (local production plus importation) was only 2,141 metric tons (MT), but our holiday season prices went up to a shocking P700/kilo. Compare this to 2019 when we had a much bigger shortfall of 12,664 MT and yet, the peak price of onions then was only P180/kilo for the December season.
If Agriculture Secretary Ferdinand Marcos Jr. examines government statistics, he will notice that for the two-year period from 2020 to 2021, our total onion imports were at 86,000 and 102,000 MT, respectively. Then in 2022, it went drastically down to 30,000 MT. What explains the drastic reduction? If the executive branch is saying that the reason for the very steep price rise is because of shortage in total supply, then the drastic reduction in imports indeed points to utter lack of government planning on our import needs.
But there could be a deeper story behind the very steep reduction in our onion importation last year. It could be that our official importation figures were vastly reduced because the trade shifted to unofficial importation—smuggling. Are smuggling syndicates having a heyday because of “fair weather” conditions?
But smuggling per se does not cause high prices. Smuggling, in fact, normally leads to lower prices because untaxed smuggled goods are sold at lower prices. So, why is smuggling cited as reason for high prices? It can only be that smuggling is employed in tandem with hoarding. Business syndicates are smuggling onions and hoarding them, in order to cause a shortage in supply, resulting in artificial high prices. These syndicates are raking in tens if not hundreds of millions in illegal income. They’re not paying taxes, and they’re raking in huge profits.
An economic crime of the highest level is potentially being perpetrated against the people. Yet we are not seeing a sense of urgency in governmental action. The President has not even created a special task force to investigate and prosecute any syndicate involved.
Our leaders cannot use as excuse the Russia-Ukraine war because the price of onions in the United States, Europe, Australia, and the rest of Asia are much lower than in our country. This only bolsters suspicions that syndicates are lording it over in our country.
In the last administration, our lives were battered by a health pandemic caused by a virus. Since the advent of the current administration, we’ve been facing a different “virus” that’s causing prices in basic commodities such as sugar, salt, onions, and now eggs to steeply rise. The president has at his disposal P4.5 billion in confidential and intelligence funds that he can utilize to “vaccinate” the entire economy from this “virus” and prevent a looming pandemic of high prices.
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