There’s cheap rice – in this PNA file photo, Mar. 2021

Rice officials are inept. Everyone but they knew that price control would trigger shortage. Forcible enforcement like jailing will only make poorer both ends of the supply chain, farmers and retailers.

Still they capped rates: P41 per kilo for regular milled, 25-percent broken; P45 for well milled, five-percent broken. At once palay farmgate prices collapsed and polished grains vanished from public markets.

Early harvesters were dismayed. In Isulan, Sultan Kudarat, traders bought their palay for only P20 a kilo instead of the agreed P25. That’s P250 suddenly lost per 50-kilo sack, or P5,000 per ton.

Retailers cowered. An assistant secretary had ordered: “Government asks you to sacrifice. You should help. From our computations, you can sell not at a loss, but no profit.”

Officials don’t know the numbers. Retailers get regular milled for at least P42 and well milled for P45 a kilo. They mark-up P8-P10 a kilo for overhead – helper, stall rental, utilities, plastic bags – and some profit. At government’s price, they’ll lose P8-P10 a kilo, or P400-P500 a sack.

Consumers lose too. There’s no P41 a kilo regular milled for sale. Perhaps there’s some P45 well milled, but mixed with 25-percent broken. For the rich there’s P62 a kilo special rice, but adulterated with five-percent broken.

Traders also are victimized. Their legitimate warehouses raided, they’re pictured as hoarders and price manipulators.

In government, the incompetent and corrupt are twins. After this price control folly will follow the racket – government-sponsored rice import cartel.

They did it with onion and sugar, from which they raked in billions of pesos. They’ll do it in rice, for billions more.

The country is short of four million tons of rice per year. A $10 kickback per imported ton spells $40-million loot, or P2.28 billion.

Plus, 10-cent kickback from the supplier per jute sack. That’s $8 million, or P456 million from 80 million empty sacks alone.

They’re setting the stage. The National Food Authority is shrieking that it has only one day’s buffer stock left. But that’s because it didn’t do its job of stockpiling local rice good for nine days. Now Malacañang claims that government must import for emergency.

NFA already did that last year, when it wanted to import in breach of the Rice Tariffication Law (RTL). Despite its P7 billion for 300,000 tons nine days’ buffer, it bought only 140,354 tons good for four days, state auditors noted. Critics foiled its illegal import scheme through government-owned Philippine International Trading Corp.

Government crooks are ready this time. They’ll replicate NFA’s import modus prior to RTL prohibition. To make it look clean, they’ll again feign to negotiate government-to-government. But Vietnamese, Thai and Cambodian counterparts know the “kalakaran” (kickbacks).

Timing is perfect. Congress will adjourn Sept. 30-Nov. 5 for All Saints’-All Souls’ Day. During that break the Executive can slash rice import duties from 35 percent to zero.

Designated cartelist importers will look like heroes bringing in affordable rice. Imported Vietnamese 25-percent broken costs $628 per ton, or P35.80 per kilo; Thai is $607 per ton, or P34.60 per kilo (Food and Agriculture Organization update, August 2023). They’ll profiteer the difference between those rates and Malacañang’s P41 per kilo cap.

Same with Vietnamese five-percent broken at $643 per ton, or P36.65 per kilo; and Thai at $646 per ton, or P36.82 per kilo. Multiply their loot by four billion kilos (four million tons).

Rice officials make this plunder possible by ignoring warnings. In July-October 2022, Marcos Jr.’s first 100 days in office, world and local news reported the makings of a perfect storm:

Ukraine War, North China floods and Europe heatwave wiped out wheat and other cereal harvests, turning the world to rice. Drought scorched India, the biggest rice exporter. Those recurred this 2023.

China continued to divert Mekong River into 13 dams, choking Vietnam, Thailand and Cambodia rice paddies. Russian aggression disrupted natural gas supply, main source of nitrogen fertilizer whose prices tripled. El Niño drought was forecast this 2023-2024.

Smart officials would’ve done the obvious. Strict collection of 35-percent rice import duty; no room for Customs “tara” (bribery) for under-declaring volume, price or type.

The multibillion-peso collection could’ve been used for farmers in the form of suitable seedlings, irrigation, cold warehousing and mechanized drying. Fertilizer import duties could’ve been slashed, while subsidizing local makers.

Yet what happened, farmers were left to buy the cheapest although inapt seedlings. With no drainage, irrigation flooded rice lands. With fertilizer thrice the cost, farmers planted only a third of rice plots. Costly electricity made cold storage and mechanized driers unworkable.

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Mula sa bank robbery ay leksiyon sa negosyo

Google Earth map

Pointless to speculate which of two pro-China presidents promised to remove BRP Sierra Madre from Ayungin Shoal. Ferdinand Marcos Jr. already rescinded such deal, if it existed at all.

Just drill oil and gas at Recto (Reed) Bank. Do it now, or suffer economic collapse.

Malampaya offshore gas field will dry up by next year; 2027 at the latest. It fuels 40 percent of Luzon’s electricity. With no replacement for Malampaya, Luzon will suffer daylong blackouts.

That’ll be disastrous. Factories, offices, shops, telecoms, trains, schools, hospitals, hotels, restaurants, cinemas, churches will close. No work or classes from home either. Foreign investors will leave. Jobs will vanish. Urbanites will flee to provinces for scarce food. Linked to Luzon, even Visayas’ power grid will be disrupted.

Recto has proven reserves. In 2013 the US Energy Information Administration estimated it to hold 5.4 billion barrels of oil and 55.1 trillion cubic feet of gas. That’s 63.5 times more oil and 20.5 times more gas than Malampaya, whose lifespan is only 24 or so years.

“We’ve long known that,” says Benny Gan, retired petroleum geologist of the Department of Energy’s precursor, Office of Energy Affairs. In the 70’s OEA explored Recto’s Sampaguita field, only 250 feet deep. “It’s the main study in a roomful of reports, photos and videos.”

Recto is 120 miles from Palawan, well within the Philippines’ 200-mile exclusive economic zone. It’s 650 miles from Hainan, China’s nearest province, thus outside its EEZ. The Hague arbitral court affirmed that in 2016. China can’t claim it by imagined “nine-dash line.”

Although China snubbed the hearings, it’s bound by The Hague ruling under the UN Convention on the Law of the Sea. Its state-owned China National Offshore Oil Corp. has no right to drill there.

CNOOC cannot subcontract to private exploration firms, retired Supreme Court justice Antonio Carpio says. Shell, Occidental, Exxon, among others, are bound by international law, so will shun CNOOC.

The Philippine government has long awarded Service Contract-72, covering Recto. Manuel V. Pangilinan’s PXP Energy Corp. and subsidiary Forum Energy Ltd. are ready to drill.

Trespassing Philippine EEZ, Chinese gunboats chased Forum’s vessels away several times. In 2020 the Duterte admin contemplated joint exploration with CNOOC. Talks failed as CNOOC’s terms violated Philippine Constitution.

Forum remobilized foreign partners to drill. President Rody Duterte stopped it after receiving a call from Beijing, Carpio recounts. “Twice Forum lost millions of pesos in false starts. Let it proceed now under Philippine Navy protection. National survival depends on it.”

Beijing anticipates drilling resumption. Its naval and coast guard ships, reinforced by maritime militia trawlers, are massing up at Del Pilar (Iroquois) Reef at Recto’s westside. Same at Escoda (Sabina) Shoal eastside. It wants to drive away the beached BRP Sierra Madre from Ayungin (Second Thomas) Shoal inside Recto.

Defy China. “Let’s do it the way Malaysia and Indonesia did two years ago,” Carpio proposes.

Beijing also claims Malaysia’s EEZ and Indonesia’s Natuna Isles. Invoking our Hague ruling as support, Malaysia held naval exercises with the US and Australia while drilling oil nearby. Indonesia invited a US aircraft carrier to sail by while drilling in Natuna.

On both occasions Beijing shrieked about owning the entire South China Sea by historical right. Kuala Lumpur and Jakarta ignored it. They’re reaping benefits from their petroleum resources, Carpio notes.

The Philippines can install rigs while holding drills with the US Navy under the Enhanced Defense Cooperation Agreement. As well, with the British Admiralty because Forum was incorporated in London. A petroleum-sufficient Philippines will ease world demand and prices.

Beijing will avoid military confrontation, Carpio calculates. An attack on Filipino government vessels escorting Forum drillers will trigger the Phl-US Mutual Defense Treaty. China Communist Party’s National Congress and Politburo have decided to take control of SCS by intimidation, not war.

“Oil and gas from Recto will save our economy,” Carpio says. “Let Beijing howl. We’ll have our fuel. What better way to assert our EEZ sovereign rights!”

Sampaguita field can pump petroleum via pipeline 150 kilometers northeast to Malampaya. The latter can in turn pump to Batangas in mainland Luzon via its existing 504-kilometer pipeline.

“If not for us circling Malampaya, China would have annexed it long ago,” a ranking PN officer confides. In 2020 a Chinese warship aimed weapons at a PN patrol there. “We’re ready to defend Recto too,” another admiral assures.

Upon operationalizing Sampaguita, other sovereignty measures can follow:

• Erect an Ayungin lighthouse to replace disintegrating Sierra Madre. The 2002 ASEAN-China Declaration of Conduct among SCS disputants bars military buildup. A civilian lighthouse is allowable, says geopolitics expert Renato de Castro, PhD.

• Sue China for damages at The Hague or the International Tribunal for Law of the Sea. The Philippines and Forum can compute opportunities lost from China’s menacing since 2007, says international maritime lawyer Jay Batongbacal, PhD.

• Exact recompense for China’s fish poaching and destruction of reef resources, like rare metals and new medicines, at Escoda, Del Pilar and Recto. Also, for concreting nearby Panganiban (Mischief) Reef into an island-fortress since 1992.

The late foreign secretary Albert del Rosario had totaled it at $662 million per year. Assisting him, marine scientist Deo Florence Onda, PhD, calculated the wrecked resources at $353,429 per hectare per year, based on the 2012 Studies on Global Ecosystems by Dutch firm Elsevier, world leader in scientific-technical-medical information.

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Placards express Mindoro Occidental residents’ woes, Apr. 2023 – PIA photo

Junk franchises of inept power producers and distributors. Oust electric cooperative mis-managers. De-monopolize areas of operation.

More and more lawmakers and local officials want those done fast. Constituents are fed up, they say. Despite lower demand post-summer, customers suffer hours-long blackouts, steep rates, poor service.

Leading the charge are Rep. Faustino Dy V (Isabela, 6th district), House Minority Leader Marcelino Libanan (4Ps party) and Deputy Minority Leader Mujiv Hataman (Basilan).

Also Davao del Norte Gov. Edwin Jubahib, Bohol Gov. Aris Aumentado, Bacolod City Mayor Alfredo Benitez and Nasugbu, Batangas Mayor Tony Barcelon.

“Stop abuses by electric cooperative officers,” Dy declaimed Aug. 8. “Stop their policies that bankrupt ECs and distress our people.”

Dy zeroed in on Isabela Electric Cooperative-1. Quoting the assistant general manager’s report to members, he said Iselco-1 collected P130-million “service fees” for late payments – without Energy Regulatory Commission consent.

ERC must make Iselco-1 refund customers the P130 million, Dy replied to interpellating Rep. Ramon Gutierrez (1-Rider party).

ERC in October 2022 halted the unauthorized charges. Iselco-1 in turn suspended mortuary, financial, livelihood and educational assistance to member-consumer-owners.

Iselco-1 paid P2 million monthly for three years for an info-tech firm’s unrendered services, Dy alleged. Another contractor is unable to deliver paid supplies and services.

Iselco-1 had P740-million uncollected consumer account receivables, Dy added. Plus, P69-million receivables unaccounted for. “If EC funds were not misused, customers would’ve received good service and Isabela 100 percent electrified.”

“Don’t let this happen in the 151 other ECs and distribution utilities,” Dy appealed to National Electrification administrator Antonio Mariano Almeda.

Iselco-1 employees’ monthly salaries are deducted P100-P500 for four years now without their consent, Dy said. Those supposedly went to a foundation of the Philippine Rural Electric Cooperatives Associations.

Dy blamed politics. Philreca is affiliated with a party of the same name, led by Rep. Presley de Jesus, Iselco-1 ex-president and director.

In 2019, Presidential Anti-Corruption Commission chairman Greco Belgica accused the party of exacting election campaign contributions from ECs. Then-NEA chief Edgardo Masongsong allowed EC boards to pass resolutions for the contributions, Belgica said.

De Jesus chairs the House committee on cooperative development and co-chairs the joint congressional oversight committee on cooperatives. He is vice chairman of the House committees on energy and on disaster management, and member of the joint congressional oversight committee on energy.

Isabela is part of Cagayan Valley Region, which has among the highest electricity rates in Luzon. Eastern Samar, from which Libanan hails, is part of Eastern Visayas Region, also among the highest.

Libanan has filed a resolution to investigate his province’s power crisis. He laments frequent outages and stiff rates of Eastern Samar Electric Cooperative Inc.

Basilan Electric Cooperative owes Petron P1.2 billion for fuel, Hataman stated in another resolution. Basilan island province suffers blackouts five to seven times daily.

Governor Jubahib accuses Northern Davao Electric Cooperative Inc. of negligence. Replace it with Davao Light and Power Co., he says.

Bohol province owns 30 percent of Bohol Light Co. Inc. Governor Aumentado wants it to grant more shares, lower rates, prioritize renewable energy and untangle “spaghetti wires” – or be replaced.

Mayor Benitez wants Central Negros Electric Cooperative Inc. to tie up with Prime Electric Holding Inc., subsidiary of Iloilo City’s More Power. That’ll improve Ceneco services and lessen charges, he says.

Mayor Barcelon wants Batangas Electric Cooperative-I to leave. Relaying constituents’ wishes to ERC and NEA, he invites Meralco to take over.

“How can livelihoods and commerce thrive with spotty electricity?” Rep. Zaldy Co (Ako Bicol) told Gotcha. “Agriculture can’t modernize, businesses can’t run, foreigners won’t invest.”

As chairman of the powerful committee on appropriations, Co says he’ll check the Energy Department’s power development plans for 2024. Co used to construct power facilities. He built for Antique province one of the country’s best, a combination of river hydro-diesel-solar plant.

Last April, Mindoro Occidental declared a state of calamity. Vice Gov. Diana Tayag deemed 20-hour-long daily blackouts a disaster.

Occidental Mindoro Consolidated Power Corp. could provide only seven of the needed 30 megawatts a day. It blamed delayed subsidies from National Power Corp., paralyzed by surging fuel prices. Occidental Mindoro Electric Cooperative had nothing to distribute.

NEA chief Almeda authorized Omeco to use two other power plants to cover the production deficit.

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Subic Bay Freeport – SBMA photo

Pioneer locators at Subic Bay Freeport are pleading for survival. They beg the Supreme Court en banc to undo a deal that would kill their businesses.

That deal goes back to 2010. Private Harbour Centre Port Terminal, Inc. is to take over Subic’s seaports and vast real estate.

Even Subic Bay Management Authority (SBMA) shuns the deal. It can’t give up control of freeport management and operation.

SC’s Third Division in 2021 compelled SBMA to grant Harbour Centre the deal. SBMA seeks reconsideration of the 3-2 split decision.

The locators also plead for definitive jurisprudence. They await the Third Division clerk’s referral to the en banc of their June 2023 motion.

The locators helped modernize the former base that the US Navy left after Pinatubo’s 1991 eruption. In 1994-1996 Mega Subic Terminal Services launched hi-tech grain unloading plants. Via fertilizer landings, Subic Seaport Terminal, Inc. introduced the freeport to world maritime commerce. Amerasia Terminal Services systematized cargo handling.

In the last 12 years the three pioneers contributed P2.7 billion to SBMA’s income. Subcontractors who installed machineries and shops around them also remit to SBMA.

In November 2009 Harbour Centre unsolicitedly proposed to develop, manage and operate the freeport for P6.4 billion. By February 2010 the outgoing SBMA administrator signed a joint venture – stating only P200-million Harbour Centre investment over three years.

The three-month “evaluation” surprised locators. Negotiations usually take years. The joint venture came ahead of publication and conduct of competitive challenge, a breach of 2008 guidelines.

Besides, it was during an election ban on government contracting. Deadline was set on Apr. 22, 2010 for submission of counter-proposals. SBMA received none, precisely because of the prohibition that insulates projects from political partisanship.

Too there was no clearance from the National Economic and Development Authority. The President chairs the NEDA board that consists of Cabinet secretaries. Technical, financial and legal experts screen major deals for viability.

Succeeding SBMA chairmen and directors refused to push through with the deal. In May 2011 NEDA declared that SBMA’s compliance with laws, rules and regulations “could not be ascertained.” That June, the Office of the Government Corporate Counsel advised to amend the joint venture to suit NEDA guidelines.

In July 2011 NEDA invalidated the deal for procedural breaches. Joint ventures can be signed only after completion of three stages: submission of Swiss challenges, publication of contract and notification of award.

In August 2011 Harbour Centre petitioned the Olongapo City regional trial court to compel SBMA to award and proceed with the deal.

OGCC recommended suspension of notices of award/to proceed. The deal needed review due to NEDA’s invalidation.

Meantime, in September 2012, the RTC of Dinalupihan, Bataan voided the deal as unconstitutional and illegal. Reasons:

• Violating fair competition, it will create a monopoly. Harbour Centre will become exclusive port operator-cargo handler.

• SBMA will delegate to Harbour Centre its legislated function to fix tariff rates. Harbour Centre will have discretion to fix such rates.

• It violated the SBMA Law. SBMA will abdicate power “to operate, administer, manage and develop the ship repair/shipbuilding facility, container port, oil storage and refueling facility … as a free-market policy.”

• SBMA surrendered authority to manage and collect real estate rentals inside the five piers.

• SBMA forfeited duty to fix just and reasonable rates, fare charges and other prices.

In August 2013 the Court of Appeals reversed the Olongapo RTC verdict and dismissed Harbour Centre’s mandamus case. Harbour Centre elevated the issue to the SC Third Division.

In December 2021 the Third Division reversed the CA on three grounds. One, Harbour Centre has right to immediate award since no counter-proposals were submitted. Two, SBMA and Harbour Centre’s signing of the joint venture before project award was a mere “suspensive condition” to the outcome of competitive challenges. Three, NEDA approval is unnecessary.

Subic Seaport Terminals, Inc. now seeks en banc ruling. It argues:

• Harbour Centre has no right to mandamus. A joint venture is discretionary, not compulsory, on SBMA.

• The Build-Operate-Transfer Law and 2008 joint venture guidelines do require NEDA approval. Here, NEDA withdrew consent.

• Harbour Centre cannot be entitled to contract award when no Swiss challenges were made in April 2010, during an election ban.

• The joint venture process and contents violate NEDA guidelines, thus invalid.

Two questions: Shall Harbour Centre collect and SBMA lose the P2.7-billion income from the pioneers? Isn’t it grossly and manifestly disadvantageous to government to enforce the deal 13 years after?

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            “Gotcha: An Exposé on the Philippine Government” is available as e-book and paperback. Get a free copy of “Chapter 1: Beijing’s Bullying and Duplicity”. Simply subscribe to my newsletter HERE. Book orders also accepted there.