Warning: possible ‘implosion’ of PH art market

Salcedo Auctions notes with interest the article “Is an ‘art mafia’ behind the auction and the boom?” (Sunday Lifestyle, 8/7/16) by Eric Caruncho.

Salcedo Auctions finds this piece a very timely call to circumspection and discernment as it develops the auction of fine art and collectibles in the Philippines, an industry that it pioneered more than six years ago.

Caruncho’s article is a belated, indirect endorsement of Salcedo Auctions’ position—consistently expressed over the past three years by its advisor Ramon E.S. Lerma, both in print and online media—on the obvious attempt of certain galleries to manipulate the auction process through shill bidding and on the dangerous effect such a fraudulent practice could have in creating price bubbles in the Philippine art market.

While the auction process remains a very effective way to acquire and sell fine art and collectibles, Salcedo Auctions believes that it can only be transparent in so far as the organizers of such auctions are forthcoming in their dealings behind the scenes.

Salcedo Auctions also believes that galleries have no business doing auctions since, by their very nature, they maintain inventory, thus opening up the possibility of a conflict of interest owing to a need “to protect (said) inventory and their prices… to protect (one’s) stock.” Indeed, the very public nature of the auction process has seen it transformed into a cloak of darkness to hide insidious attempts to manipulate prices and create false and highly inflated value expectations.

While Salcedo Auctions can in no way control the actions of bidders by the very nature of a public auction, since it opened its doors in 2010, it has instituted a system to prevent, or at least minimize, price manipulation by outside parties. This includes Salcedo Auctions’ strict adherence to a price reserve, the amount of which cannot be higher than the low estimate published in its auction catalogue, thus revealing to prospective buyers a “sell-if-there-are-no-further-bids” price in the true spirit of transparency. Knowing about the deceitful practices of certain galleries and artists’ handlers since last year, Salcedo Auctions has stopped accepting direct consignments from living artists for its “Important Philippine Art” sales.

In the interest of protecting the thriving Philippine art market from imploding, Salcedo Auctions once again reiterates its firm and strong stand against the “symbiotic” relationship that exists between certain galleries conducting auctions, the handlers of certain senior and contemporary artists, collectors with vested interests, so-called art experts, as well as national dailies that continue to publish “record breaking” auction results sans investigation.

There is clearly no excuse for hoarding or controlling the prices of art simply because “there’s no law against it and it happens everywhere.” In the art and collectibles auction business, credibility and reputation are key; and for as long as the practices mentioned in Caruncho’s article continue, Salcedo Auctions shall remain vigilant against those who seek to bastardize the auction process—looking after the public interest to deserve its trust.

—KAREN KUA-LERMA, president, Salcedo Auctions, 121 Tordesillas St.,Salcedo Village, Makati City