Ombudsman to charge Alcala for creating cartel which jacked garlic, onion prices by over 50%
Ombudsman confirms garlic cartel: EX-DA chief Alcala colluded with importer-retailer Leah Cruz to jack up prices.
The Office of the Ombudsman has accused former Department of Agriculture (DA) Secretary Proceso Alcala, alleged cartel operator Vendors Association of the Philippines, Inc. (VIEVA) chair Lilia Cruz and 23 others for collusion in creating a garlic cartel which caused prices to skyrocket during the Aquino administration.
In a statement, the Ombudsman said it found probable cause to charge to charge Alcala for picking Cruz as as both DA consultant and representative of the garlic and onion importers who cornered the import permits issued by Alcala during his term.
From 2010 to 2014, a total of 8,810 import permits (IPs) of which 5,022 IPs were cornered by importers and affiliates of VIEVA.
Four months after appointing Cruz chairperson of the National Garlic Action Team (NGAT) which served as the DA’s consultative body on policies and concerns of the garlic production and supply program, the DA declared a shortage in garlic and recommended the importation of 58,240 metric tons of garlic through the issuance of IPs to be allocated to farmer cooperatives (70%) and legitimate garlic importers (30%).
The Ombudsman said: “NGAT’s resolution that 70 percent of the IPs would be allocated to farmer cooperatives was actually a scheme designated for Cruz to control the garlic importation. It bears emphasis that after Cruz established VIEVA, she caused the affiliation of farmer cooperatives and associations under its umbrella on the pretext of helping them financially. By adopting the scheme, Cruz practically controlled a big chunk of the 100% of the IPs for imported garlic. The 30% of the IPs supposedly allocated to legitimate garlic importers was given mostly to VIEVA and its affiliated importers. On the other hand, the 70% of IP allocation for the farmer cooperatives was mainly captured by Cruz through VIEVA-affiliated farmer groups.”
“The scheme enabled VIEVA to monopolize the garlic supply, allowing it to dictate its market prices. [From] January to July 2014, the extraordinary and alarming spike in the prices of imported and locally produced (native) garlic was strongly felt by the public especially in the month of June 2014. The price of imported garlic soared, ranging from P260.00 to P400.00 per kg. from its average price of P165.00-P170.00 per kg. in calendar year 2010-2013; while the price of native garlic varied from P250.00- P400.00 per kg. in April to June 2014,” the Ombudsman said.
Aside from Alcala and Cruz , other officials to be charged by the Ombudsman for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019).
are Bureau of Plant Industry (BPI) Director Clarito Barron, BPI Division Chiefs Merle Palacpac and Luben Marasigan, and garlic traders Edmond Caguinguin, Rolan Galvez, Rochelle Diaz, Ma. Jackilou Ilagan, Jon Dino De Vera, Napoleon Baldueza, Jose Ollegue, Laila Matabang, Angelita Flores, Gaudioso Diato, Denia Matabang, Jose Angulo, Jr., Raffy Torres, Mary Grace Sebastian, Renato Francisco, Rolando Manangan, Orestes Salon, Prudencio Ruedas and Shiela Marry Dela Cruz.
Documents from the National Bureau of Investigation, Securities and Exchange Commission, Cooperative Development Authority, Department of Trade and Industry, and National Statistics Office revealed the close connection and relations between and among the VIEVA and VIEVA-affiliated importers. Aside from the interlocking incorporators, the importers have similar representatives, addresses, emails, phone numbers, company profiles, major suppliers, plant addresses, ports of registration, thus evidencing their common interest.
BPI officials Barron, Palacpac and Marasigan were found guilty of Grave Misconduct and ordered dismissed from the service, with the accessory penalties of perpetual disqualification from holding public office, forfeiture of retirement benefits, cancellation of civil service eligibility, and bar from taking the civil service examinations.