House panel to recommend charges vs ‘onion cartel’

THE HOUSE Agriculture and Food Committee pointed to a group of companies involved in the whole onion value chain for the price manipulation of the commodity that hit up to P700 per kilo in retail markets last year, and will recommend the filing of charges against those linked to the operations.

“The documents are not lying,” Marikina Rep. Stella Luz A. Quimbo said in a briefing on Thursday about the panel’s findings.

She said the Philippine Vegetable Importers, Exporters and Vendors Association (PhilVIEVA Corp.) is a “fully vertically integrated corporation,” an umbrella entity that covers “all operations in the onion industry from farming (Leah Cruz), trading, (Yom Trading, La Reina), cold storage (Tian Long), and trucking (Golden Shine).”

PhilVIEVA Corp. was established in 2013 and is registered under the Securities and Exchange Commission.

BusinessWorld could not reach the company for comment on Thursday.

Ms. Quimbo also said that Ms. Cruz has been using “dummy corporations,” namely Vegefru Producing Store and Rosal Fruit and Vegetable Trading.

“They’re not part of PhilVIEVA, but these are owned by Leah Cruz,” she said.

During the House hearing, Ms. Cruz denied her involvement in the alleged dummy corporations.

However, based on public documents submitted by the corporations, “the registered telephone numbers of these corporations are identical to the phone numbers of Ms. Leah Cruz’s office,” Ms. Quimbo said.

In 2014, the Justice department recommended the prosecution of several individuals, including Ms. Cruz, for their involvement in a garlic cartel. Ms. Cruz was also part of the 127 government officials and importers sued by the National Bureau of Investigation in 2015, as it alleged that Ms. Cruz paid P60,000 to the Department of Agriculture-Bureau of Plant and Industry (DA-BPI) for every import permit.

She is currently facing these charges at the anti-graft court Sandigayanbayan and at a Regional Trial Court in Manila.

Committee Chairman and Quezon Rep. Wilfrido Mark M. Enverga said the panel will release its committee report in the next two weeks, which will name the individuals, including government officials, who will be recommended to face charges.

Ms. Quimbo added that Ms. Cruz, through PhilVIEVA, would manipulate prices by targeting local farmers. The corporation would ask farmers to sell their onions for as low as P12 per kilogram, justifying this through a supposed lack of cold storage facilities.

This is possible, the lawmaker said, because the “cartel” controls the cold storage facilities and can lie about availability.

Ms. Quimbo also noted there are a number of cold storage facilities that operate without proper accreditation.

The corporation also has control of imports through a “bargaining leverage” against local suppliers.

As an example, Ms. Quimbo said they would ask farmers to sell their onions at P12 per kilogram because the landed cost of imported onions is only P14 per kilogram. “Eventually, they would have most of the imported and local supply,” she said.

In 2022, the highest importers of onion were three companies under Ms. Cruz — Yom Trading, La Reina, and Vegefru Producing Store, which collectively brought in 5,445.66 metric tons (MT) of yellow onions or 68.74% of the total imported volume. Likewise, they imported up to, 7,648.81 MT of red onions or 41.02% of the total volume.

Ms. Quimbo added that through their trucks and retail outlets, PhilVIEVA could deliver their stocks at their desired date and markets, also dictating the prices.

Mr. Enervga said there is a need to amend Republic Act (RA) No. 10845 or the Anti-Agricultural Smuggling Act, particularly to include hoarding, profiteering and price manipulation of agricultural commodities “as economic sabotage.”

He added that penalties under RA 7581 or the Price Act should be increased.

In a hearing at the upper chamber, Senator Cynthia A. Villar, chair of the Agriculture, Food and Agrarian Reform Committee, called the anti-smuggling law a “failure” as no individuals have been convicted since its enactment in 2016.

Customs Assistant Commissioner and Spokesperson Vincent Philip C. Maronilla said the bureau has filed a total of 179 cases under the law. Broken down, 142 of these cases are large-scale smuggling, while 37 are not large-scale.

Rosendo O. So, chairman of the agricultural sector group Samahang Industriya ng Agrikultura (SINAG), said law enforcement agencies themselves could be accomplices of smugglers.

“Given the gravity of agricultural smuggling and its far-reaching consequences, it seems to me that we also need to punish government officials who allow these acts,” Senator Ana Theresia “Risa” N. Hontiveros-Baraquel said. She has filed a related measure amending the anti-smuggling law. — Beatriz Marie D. Cruz