• The high price of rice and spice: whose fault?


    Sometimes, one is so desperate to come up with blame-shifting spin, one misses glaring fallacies in reasoning.

    At Malacañang’s media briefing last Thursday, Presidential Communications Operations Office Secretary Herminio Coloma blamed the present surge in rice, garlic and other food prices on the purportedly successful crackdown on contraband. With less untaxed imports, he argued, food prices soared.

    If that’s true, then in the past decade, when contraband was less than one-sixth the level under President Benigno Aquino 3rd, food costs should have repeatedly leapt. Yet during the Arroyo administration, the only price spiral like today’s rice and spice surge was the worldwide inflation in grain costs in 2008.

    Smuggling in the past two administrations averaged $3 billion annually, based on International Monetary Fund data. But in 2011 and 2012, contraband topped $19 billion a year. Thus, Aquino lamented in his 2013 State of the Nation Address that revenue lost due to smuggling hit P200 billion, with guns and drugs also slipping in.

    So is Coloma suggesting that then-President Gloria Arroyo, his boss’s favorite punching bag, kept food prices stable while curbing smuggling? (Oops, sorry, Boss.)

    The Palace spinmeister got the smuggling line from the National Price Coordinating Council, made up of agencies monitoring costs. He should have asked food importers the real reason why shipments are down and prices up.

    Manila’s truck ban spiked prices
    Blame Manila Mayor Joseph Estrada. To be exact, his campaign to trim traffic by allowing trucks on city roads only from 10 a.m. to 3 p.m. in the day, instead of the 10 a.m.-5 p.m. window given by the Metro Manila Development Authority.

    Though well-meaning, Estrada’s policy proved unworkable, with trucks unable to get to the ports, queue up to unload and load containers, and drive out of Manila within the shortened period. So cargo piled up, curtailing edibles and other imports, and trebling trucking and storage costs.

    That, Secretary Sonny, is the real reason why food is less abundant and more costly.

    With the mammoth backlog of containers, ships could not unload and load even after weeks. Over the past month, five vessels reportedly came and went without moving any freight. Others dropped Manila cargo as far away as Davao, forcing importers to ship goods to Luzon at costs far higher than international shipping. Meanwhile, storage charges pile up daily for containers stuck in ports beyond a week.

    During the ban, many trucks could make just one trip to the ports every two days, down from one or two daily. Kept away from home for two days at a time, many drivers quit. Lacking drivers, some trucking firms have begun selling vehicles, further limiting the industry’s hauling capacity. And hauling charges have jumped two- or three-fold.

    All those cost increases are mostly passed onto consumers—assuming food actually gets through. On ships or at port for weeks, edibles go bad. So food suppliers have to stop imports until container yards are cleared and can again take in new cargo. That will take at least a month from today. Until then, rice, garlic and other shipments are nil.

    It gets worse. Starved of raw materials, factories are disrupted. If delayed operations lead to missed shipment deadlines, there are huge losses in canceled orders and contractual penalties.

    Exporters of time-sensitive or perishable goods are particularly hard-hit. Agricultural produce cannot be shipped beyond a certain length of time, or it would rot on the voyage. Fashion items for autumn, which must get to America and Europe before September, may have to go by costly air freight, wiping out exporters’ profits.

    It’s the politics, stupid
    Never has this kind of maddening mess happened before. And like so many screw-ups hereabouts, politics may be partly to blame.

    Some believe Mayor Estrada imposed the ban partly to get back at the Aquino administration for targeting his son, Senator Jinggoy Estrada, in its pork barrel investigation, along with partymate Juan Ponce Enrile and just jailed Bong Revilla.

    In recent weeks, Estrada has allowed trucks 24/7 on designated routes like the inner lanes of Roxas Boulevard. But Manila charges P100 per truck, collected by port operators. With about 4,000 haulers daily, that’s a cool P400,000 a day for city hall.

    Let’s hope other cities don’t impose their own bans to collect fees. For a while, trucks crossing into Pasay had to park due to that city’s own restrictions. Thankfully, the matter has been addressed. Just remember: every additional charge is ultimately paid by consumers and companies, including families buying food.

    The way forward or backward
    So how do we move forward and not backward? First, continue allowing trucks to pick up containers 24/7. That spreads the trailer flow over the whole day and night, instead of congesting it into several hours.

    Second, in its ongoing crackdown on unfranchised buses and trucks, the Land Transportation Franchising and Regulatory Board should spare the latter for now.

    LTFRB has long franchised haulers for hire, but not those used by brokerage firms just for their clients’ cargo. Now it wants all trucks franchised, on pain of P200,000 fine.

    Since enforcement began last week, South Harbor cargo has trickled to just one-fourth of the normal flow. If LTFRB doesn’t relent, it would further worsen the huge container pile-up and the tight supplies and surging prices of food.

    Third, the Bureau of Customs should defer two policies meant to thwart smugglers, but could further dislocate the ports at this time: pre-shipment inspection of imports and the required accreditation of all firms bringing in goods. Implementing these well-intentioned policies now would further constrict cargo and edibles.

    The Port Users Confederation, whose honorary chairperson is this writer’s mother, is working with Customs to address concerns. Commissioner John Sevilla knows that if the new rules are rolled out, countless enterprises may not be able to import for lack of inspection or accreditation.

    That would create an even bigger mess. With one consuelo de bobo: the resulting collapse in shipments and even worse shortages and inflation could rightly be blamed by Secretary Coloma on the anti-smuggling campaign.


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