July 4, 2023 Ryan Ponce Pacpaco 188 views

As well as smuggling, price fixing

PRESIDENT Ferdinand R. Marcos Jr. on Tuesday ordered an investigation into the smuggling of onions and other agricultural products, calling such act as being tantamount to economic sabotage.

In a statement, President Marcos said, “I have just given instructions to the DOJ and the NBI to initiate an investigation into the hoarding, smuggling (and) price fixing of agricultural commodities. And this is stemming from the hearing that we’ve conducted in the House, specifically by Congresswoman Stella Quimbo and the findings that they came up with.”

In a Memorandum to the President by Marikina Rep. Stella Quimbo, who led the Committee on Agriculture and Food hearings at the House of Representatives, she stated that
substantial evidence has been uncovered pointing to the existence of an onion cartel as she shed light on the causes behind the surge in onion prices in 2022.

She said the cartel has engaged in various activities including farming, importation, local trading, warehousing, and logistics.

President Marcos emphasized the significance of these findings as sufficient grounds to initiate an investigation, citing the need to address what amounts to economic sabotage.

“And that is why we are going to be very, very strict about finding these people and making sure that they are brought to justice,” President Marcos stated.

The hearings highlighted the sharp increase in onion prices starting in July 2022, attributed to a perceived shortage of supply. However, data from the Department of Agriculture Bureau of Plant Industry revealed only a modest shortage of approximately 7.56 percent in 2022, which could not justify the significant inflation rates reaching 87 percent in December of that year.

Quimbo reported that responses from cold storage facility owners during the hearings also indicated an ample supply of onions during the period of price surges. This led to the examination of an alternative explanation: cartel activity. The cartel allegedly engaged in price-fixing through manipulation of stocks, leveraging control over cold storage facilities.

During the hearings, Lilia/Lea Cruz, known as the “Sibuyas Queen,” denied involvement in onion importation, stating her participation was limited to trucking and assisting onion farmers.

However, Quimbo said evidence presented in the hearings confirmed Cruz’ involvement in the onion industry.

Cruz, Quimbo said, is the majority stockholder of the Philippine VIEVA Group of Companies, Inc. (PVGCI), established in 2012. PVGCI, along with other major players in the onion industry, is implicated in cartel operations, including coordination of stock withdrawals and price-fixing at various stages.

Quimbo also presented an “Onion Matrix” which involves several companies engaged in the trading and importation of onions and other vegetables acting in connivance with owners of cold storage facilities.

One of the recommended actions of Quimbo to address the issue effectively is the dismantling of the cartel with the help of the DOJ, the NBI and the Philippine Competition Commission.