Management by Illusion

Management by Illusion

January 14, 2023

Look at this timeline, Reader.

Dec. 27, 2022 –  the deputy spokesperson of the Department of Agriculture (DA) Rex Estoperez , in a “Laging Handa” briefing on PTV4 (and other stations, such as CNN Philippines), stated in no uncertain terms that the DA had no plan to import onions.  Why?   Speaking in the vernacular, he elucidated: 1) the peak season for onions in the Philippines starts in January, and 2) if the DA did issue import permits, smuggled onions would surface “from just around the corner.”

It is a fact that the onion harvest time is Jan-March, and sometimes up to June, so Estoperez’s peak season is not hyperbole on his part. 

His second reason requires some explanation.  We know that,  onion smuggling  has been in the news, with hundreds of metric tons of smuggled onions discovered and confiscated. (Permit me to go off on a tangent:   Why didn’t the government , having confiscated the cargo,  just turn it over to the DA for distribution in the light of the national shortage? Where are those onions now?).  But back to point:  Apparently the smugglers who haven’t been caught are lying low, not daring to dispose of their onions because it would be obvious that these were smuggled and they would be caught out.  What they need is to legitimize their product.  And the DA issuing import permits (Sanitary and PhytoSanitary Import Clearance or SPSIC) would be just what is needed to allow them to do so.    That is what Estoperez must have meant, Reader, when he said “just around the corner”.  

Jan. 6, 2023 – (barely ten days later) The DA made a volte face.  

In a memo from the Office of the Secretary (PBBM) but signed by his Senior Undersecretary Domingo Panganiban, the DA allowed the issuance of SPSICs (Sanitary and PhytoSanitary Import Clearance) for 4000 metric tons (MT) of yellow onions and 17,000 MT of red onions. These SPSlCs were to  be issued only  from Jan. 9-13,  and the last day for the arrival of the imports was to be Jan. 27, or they would be rejected.  The memo starts with “To address the supply gap prior to peak harvest in 2023 and to stabilize the continuous increase in the price of fresh onions in the market…”

The funny thing about this is that the deputy spokesperson of the DA, Rex Estoperez, hailed this move without skipping a beat. It was as if his stated fears ten days before never happened. 

Jan. 10, 2023 – the public was made aware of the 180-degree turnaround, but no explanation accompanied the memorandum. 

Which begs the questions:  How are decisions made in the Department of Agriculture? Or did PBBM decide on his own, off the top of his head, to import and then left Panganiban to make the justification?  Was PBBM influenced by the desire to bring down inflation (the Philippine Statistics Authority (PSA) had stated that of the 8.1% inflation rate in December, onions contributed 0.3 percentage points). Or was he influenced by other, less altruistic motives, like allowing the smugglers (who may have been supporters) to make a huge profit (Rappler computed that the as of December, the price of onions was about 8 times the world price).  Who influenced him?  Was there a quid pro quo owed to some onion smuggler?

Jan. 10, 2023 – also on this day, the Ombudsman Samuel Martires came out of a years-long hibernation – he did nothing of note except to misinterpret the constitution by defending government officials against the public rather than the other way around.  

The ombudsman, on his own (motu propio) decided to investigate the onion mess: “You are hereby directed to submit within a non-extendible period of three days from receipt hereof your sworn comment together with corresponding supporting documents explaining clearly the reasons why there is an alleged shortage of supply of onions; why onions were purchased from a multipurpose cooperative and allegedly at a price of P537 and the Department of Agriculture proposes to import onions despite the approaching harvest season of onions by local farmers,” he ordered the DA, which received the order on Jan. 11. 

But at least the Ombudsman brings out two new issues:  

(1) The DA, through the Food Terminal, bought onions at P140 million pesos at P537 per kg. and sells them through the Kadiwa at P170, thus losing about P96  million

Whose brilliant idea was that? 

Each customer was allowed to buy 1 kg. Do the arithmetic, Reader.  The P140 million could buy 260,707.6 kgs of onions. Assuming they sold it all (it seems they didn’t spend the whole amount), and assuming that each kg. sold represented one family, that means 261,000 families were accommodated. Compare that with the 25 million families in the Philippines.  

Selling at P170 was clearly to create the impression that Filipinos were now paying only that amount for onions, or  the Kadiwa was doing a great job. “Management by illusion” is how the late Rafael Salas described the management style of PBBM’s father.  Is this also true of the son?

(2). Importing onions despite the approaching local harvest. Every farmer, every student, and the DA should know that harvest time obviously means that there is an increase in supply, and everything else remaining the same, the price of the commodity goes down. But when an importation occurs, the supply increase is even more, and the prices go down even more. Which means, ultimately, that the farmers will receive lower prices for their harvests, and therefore less income.  

The DA, by changing the peak harvest date (motu propio) from January to February, is trying to worm itself out of this predicament.  But aren’t farmers their main concern?

I will make a fearless forecast on the Ombudsman’s investigation.  He will report that the DA did everything by the book. It is not to blame. Well then, who is to blame?  

I wouldn’t put it past the Ombudsman to blame – the onion farmers.  I hope I’m wrong.

 

 

 

As I See It

The Official Blog of Winnie Monsod

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