‘Sweetheart deal’ favored bottlers

The government was pressed Thursday to file economic sabotage cases against resigned Sugar Regulatory Administration administrator Hermenegildo Serafica and other officials behind the rushed Sugar Order 4 that would have allowed the importation of 300,000 metric tons of sugar.

President Ferdinand “Bongbong” Marcos overturned SO 4 but permitted the importation of 150,000 metric tons as industrial users insisted on a sugar shortage. Department of Agriculture Undersecretary Leocadio Sebastian, who signed SO 4 on behalf of the President, and SRA board member Roland Beltran had also resigned.

“The Office of the President or the Department of Justice should file economic sabotage charges against those who signed SO 4,” United Sugar Producers Federation President Manuel Lamata said.

The former SRA officials, he said, caused a lot of damage to the sugar industry.

Sugar producers were mostly kept in the dark regarding the crafting of the import plan that led to the drafting of SO 4 despite the assurance from planters of adequate domestic sugar supply, he said.

Bottlers or soft drinks manufacturers have long been pushing for imports that are cheaper than domestic sugar, Lamata pointed out.

“SO 4 would have clearly favored industrial users, particularly bottling companies,” according to Lamata.

“Importation favoring a particular sector will trigger a price war that will be disastrous for the industry,” he added.

Lamata said SO 4 was a “sweetheart deal” among SRA officials and traders and the sugar importation order was designed to benefit the bottlers’ group.

“It is not Serafica’s call to declare a shortage when sugar mills are still in operation,” he stressed.

He explained that it has always been standard practice at the end of milling season that a national survey of all sugar mills is initiated to determine the outstanding stocks of raw and refined sugar.


“That is the only time you will know for sure if there is a surplus or shortage. Then and only then can you initiate the next steps,” Lamata said.“Serafica was in a hurry to please the greedy industrial users because he was on his way out.”

Serafica, he said, has caused a lot of damage to the sugar industry.

Appearing before the Senate on Tuesday, Executive Secretary Victor Rodriguez admitted that it was he who asked the SRA to draft the proposed order for the importation of the 300,000 MT of sugar.

Rodriguez then seemed to have passed the buck on Sebastian whom he chided for signing the import order in haste and without the approval of the President.

But Sebastian maintained that Rodriguez himself gave him the authority to sign SO 4 based on the latter’s 15 July memorandum that designated him (Sebastian) as an ex-officio member of the SRA representing the President.

President Marcos has assumed the concurrent role of DA secretary and, consequently, also the chairmanship of the SRA.

In another hearing at the House of Representatives, Sebastian asserted that he only resigned out of “delicadeza” and that the memorandum of Rodriguez gave him the authority to sign contracts for the DA.

Sebastian revealed that in meetings on 1 and 4 August attended by the President, Rodriguez, Serafica, and resigned SRA board member Aurelio Valderrama, they agreed to draft a sugar importation program for submission to Marcos.

Meanwhile, Lamata said he would agree with the bottlers’ demand for importation of up to 450,000 metric tons of sugar but only if they would slash by half the price of their products like soft drinks.

Sugar producers are not against importation but it should not be timed with the harvest season so that this will not affect the local industry, he said.

“UNIFED is not against importation but it is against the exclusivity to industrial users, which has never happened in the history of the sugar industry,” he added.

Planters groups, nonetheless, said that with the coming harvest season in October to November, the domestic demand will be covered along with a standby 9,965 metric tons earmarked for the annual US quota which can be converted for domestic use.

A high-ranking official of the American Chamber of Commerce of the Philippines maintained that the market has a shortage.

Lamata, however, said the bottlers are drumbeating the shortage narrative to allow them to access cheap Thailand sugar.

Shortage claims

Last week, Malacañang announced that the President and industry stakeholders have agreed to import up to 150,000 MT geared toward resolving the shortage in local supply.

“Absolutely there is a shortage, and I am spending a lot of time meeting with stakeholders to mitigate the situation and know how they are coping. The President ordered an import of 150,000 MT, that’s a good start. The backlog is 600,000 MT,” said Ebb Hincliffe, executive director of AmCham Philippines.

Hincliffe added he is not buying allegations of large-scale hoarding in the country, even if the Bureau of Customs, along with other law enforcement agencies, have discovered thousands of sacks of sugar inside various warehouses.

“We are not concerned about sugar farmers as they are doing a good job, considering they don’t have fertilizers and Odette came through and hurt their crops. They are producing pretty good, and they can sell. But the capacity of the refineries is not getting from the farm to the refinery down to the market. I don’t believe there is a large-scale hoarding, but a shortage,” he said.

Hincliffe added that he had a meeting with officials from Coca-Cola and Pepsi Philippines, to send a letter to President Marcos telling him that “there might come a time that sari-sari stores in the country will not sell Coca-Cola, Pepsi, and RC Cola by mid or late September, and that’s a reality.”

“We need 600,000 MT and we cannot produce that large amount of sugar overnight. They cannot put 150,000 tons of sugar in an airplane or air freight,” he said.

On Wednesday, Coca-Cola Beverages Philippines Inc. claimed that persisting sugar shortage is hampering its production.

“CCBPI confirms that the supply shortage of Bottler’s Grade sugar has affected the capability of some of our bottling plants to continue producing some products.

The soda giant maintained it is doing everything it can to minimize supply disruption and mitigate the impact of supply shortage on its bottling operations.

“We are also continuing to work with the government and the broader sugar industry sector to arrive at a sustainable solution for the benefit of the small retailers who also rely on product’s availability for their livelihoods,” CCBPI maintained.

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