Transcript of Hearing on Rice Smuggling
with Senator Alan Peter "Companero" S. Cayetano

ASC: We all know how important this is and it is really a balance between our farmers and two-thirds of our population, who derive their work from agriculture, and of course, the whole Philippines, all Filipinos who eat rice. And it has always been said, paulit-ulit, na inelastic nga ang presyo ng rice. Dahil kahit magkano yan, bibilhin pa din at kakainin yan ng Pilipino.

I know we will have our time when it comes to the policy, sufficiency, and so on.

But, dito lang po sa conflict na nangyayari between the international law and our local laws, can I just clarify that? Although there can be a conflict, there is always a procedure to be followed.

For example, we have a death penalty law now, but we sign an international treaty saying that we will abolish death penalty. That international agreement becomes part of our law. It will tell us what to do with our local law. If it said there, when we approved the treaty, that [the local law] is hereby repealed, and if the treaty is signed by the President, ratified by both the Senate and the House or by a law, then the death penalty is repealed.

Pero kapag Presidente lang ang pumirma o kaya ay ratified lang ng Senate and House at sinabi na we need further legislation, ibig sabihin, tuloy pa din ang death penalty sa Pilipinas, except that, pwede kang magreklamo sa international court.

When we refer to the tariff, are we referring to R.A. 8178? But this R.A. 8178 does not include rice. So it says that quantitative restrictions on agricultural products still continue. What law governs that? Was there a law previous to R.A. 8178 that governs the quantitative restrictions? O sa Customs, anong batas ang ginagamit niyo sa duties ng rice?

BOC: P.D. 4 as amended po.

ASC: Did the WTO legislation and treaties repeal P.D. 4?

BOC: Wala po.

ASC: So ibig sabihin, yan pa din ang local law natin. So ang remedy ng gustong mag-import ng bigas, magcomplain ng sanction sa WTO. Hindi nila remedy na magpasok nang walang import duties.

So yung sinasabi nilang merong gray area, walang gray area. That is not a conflict. When we do not follow our international commitments and it's part of our law, the remedy is to go for sanctions. The remedy is not to disregard the local laws that we have.

The [DOJ] secretary said she is studying it. But for me, it is simple. If the international treaties and the legislation said na repealed ang laws natin, yun ang masusunod at pwede nang mag-import, wala nang quantitative restrictions. But kung wala namang nakalagay doon na automatically repealed ang laws natin, yung local laws pa din ang masusunod. Ang kailangan lang nilang gawin, magsumbong sila sa WTO na ang Pilipinas ay hindi sumusunod.

For example, if you give a certain subsidy to certain industries in the Philippines na violation ng WTO, diba ang remedy ng ibang bansa ay magsumbong sa WTO. Hindi sila pwedeng pumunta dito at pigilan ang pagbigay ng subsidy.

We cannot take the law into our own hands.

DOJ Sec. De Lima: And I understand that only member-countries can bring the matter to the WTO.

ASC: That is my understanding also. But anyway, I will stop there because this is a different matter from the policy itself.

I join the Senate President na maresolba agad ito because what will happen if the Davao court, courts in Metro Manila, in Cebu, etc. will all have different decisions? Mag-aantayan, tapos dumating pa sa Supreme Court. It will be a ridiculous situation and the Agriculture secretary will lose all control in the policy of rice and balancing farmers' and consumers' interests.

Thank you for that clarification.

... 

ASC: Let me just post the question whether meron bang malalaking tao sa likod ng isyu.

DOJ Sec De Lima: May mga ganun pong impormasyon pero wala pa pong navavalidate ang NBI.

ASC: Madam chair, in previous investigations, we allow the secretary to [relay] some things in confidence [at the proper time] so that hindi mag-interfere sa kanilang investigation...

ASC: Madam chair, can I just ask Mr. Bangayan to answer the [previous] question?

[To Davidson Bangayan]: Paano mo sasabihin na hindi mo kilala si Mr. Willy Sy kung iisa ang address niyo at iisa ang phone number?

Nung dineny ni Mr. Bangayan na he has anything to do with Starcraft, chairman Villar showed the data. Ang sagot mo [to Bangayan], wala kang kinalaman sa Starcraft. And then, they showed in another data that si Mr. Sy, ito ang relation sa inyo. And then the last data, pareho ang address niyo. So ibig sabihin, si Mr. Sy, doon din nag-oopisina sa iyo pero siya din ang nag-aayos para sa Starcraft.

Bangayan: Hindi po pareho ang address.

ASC: So ang sagot niyo po ay hindi nag-oopisina sa inyo si Mr. Sy?

Bangayan: Hindi ko po siya nakikita.

ASC: So ibig sabihin, yung Adolfe Trading, hindi ganyan ang address?

Sen. Villar: Yung opisina ni Mr. Bangayan, sa Prestige Tower...

ASC: In other words, Mr. Bangayan, kaanu-ano mo si Mr. Sy? Empleyado mo ba siya? Broker mo ba siya? Independent ba siya? Abogado ba siya? Ano mo siya?

Bangayan: Independent po. Project-based.

ASC: Then he also does work in Starcraft? Then yung lawyer mo [Atty. Benito Salazar], yun din ang lawyer ng Starcraft? Tama po ba?

Is Atty. Benito Salazar also a lawyer for Starcraft? Since nandito din siya, can I ask him? I will not ask anything that is against the client-lawyer privilege. I just want to know if you are representing Starcraft in court.

Salazar: I am the council of Mr. Bangayan for a long time. And I am aware that Sec. Alcala has mentioned that I am also appearing in a case in Davao for Starcraft. That is not true. My connection with Starcraft was when I wrote the NFA about incoming goods of Starcraft without permit because it was not needed anymore...

ASC: In other words, kliyente niyo din ang Starcraft?

Salazar: Yes.

ASC: And as a courtesy to a fellow lawyer, I won't put any malice to that. You are free to contract any client. Ang pinipoint ko lang kay Mr. Bangayan, it seems that in denying your relationship with Starcraft, both of you seem to be using the same people with expertise. It could be purely a coincidence or it could be that may relationship ka sa Starcraft talaga, may business ka sa Davao. So you could see where this is going as far as the committee is concerned. Obligasyon namin to ask, to check, and to investigate. There are too many coincidences that is why we are checking.

Nag-oopisina ba sa iyo o pumupunta lang ba siya sa opisina mo? Kasi may binanggit nanaman na address. It is the same office.

ASC: Kung pwede, tanungin na din natin nang deretso, Mr. Bangayan, sabi mo you are in the trading business, and one of your products is rice or agriculture. Gumagamit ka nga ba ng mga coops o mga farmers' groups para sumali bidding?

Deretsahan. In any of your importations, tradings, or dealings, whether you call it a joint venture, a partnership, let us settle that later on, have you used or approached any of these groups? At any time of your doing business?

There are certain allocations that are restricted or reserved only for the government-government or only for farmer groups.

So what I want to know, without make a judgment first, kung meron ka bang dealings with farmers of with cooperatives, or farmer associations, na sila ang magbi-bid, popondohan mo.

Bangayan: I think, some. As I understand, there is a farmers-as-importers program ang NFA. Pero seldom.

ASC: And in your view, hindi iligal yun na pondohan mo o gamitin mo ang farmers para kumuha ng allocation?

Bangayan: Yes, your honor.

ASC: Ano ang deal niyo sa farmers?

Bangayan: Depende po sa arrangement.

ASC: For example? Tama ba yung sinabi kanina na popondohan sila, mananalo sila, and then P5 per bag kayo?

Can you explain the industry practice? You mean, maraming gumagawa niyan? Maraming gumagamit ng farmers to get allocations?

Bangayan: Yes, your honor.

ASC: And you will be able to name kung sino yung ibang gumagawa noon?

Bangayan: Yes, your honor. In 2012, merong program doon na minimum access volume at merong tinatawag na private sector finance tax expenditure subsidy. Yung minimum access volume po nung Feb. 2012 when they opened it to willing eligible participants, walang bayad, equally divided... Normally, yug coops, sasali.

ASC: Tunay bang coops yun o parang Napoles lang na naglagay lang ng pangalan?

Sen. Villar: Tunay na coops ang iba.

ASC: Yung kay Mr. Bangayan? Just so mabuo natin ang storya.

Bangayan: Kapag nahimay po natin yung requirements para makakuha ng eligibility, hindi ka lulusot.

ASC: Yun din ang sinabi sa pork barrel, pero nakalusot. Yun din ang sinabi ng COA at DA. Sorry Mr. Bangayan, we have to bring this up. In your case, sinasabi mo na legal for you to finance them, and then she-share ka sa kita? Joint venture?

To any of our secretaries, tama po ba yun? Ligal po bay un? Or is it really restricted for the farmers? Mr. Bangayan is saying, since it is a joint venture, pwede naman. And he is saying that it is common practice.

Sen. Villar: I intercede... Sa findings ng committee, for the BOC, with the DA, DOF, and NFA, sinasabi na pinagbabawal na yung dummies o front of financiers and smugglers should be avoided. Dapat bawal yun. And tulungan nila ang mga farmers' organizations through provision of credit na sila mismo. Yun ang sinasabi ng report ng committee.

ASC: Madam chair, parang ang lumalabas, may tatlong klase.

Yung una, yung parang kay Napoles, kukuha ka ng mga empleyado, magbubuo ka, kunyari farmers sila. Dummy na, fake pa.

Pangalawa, yung dummy, ibig sabihin, legitimate, totoong mga cooperative, pero dahil bawal sa iyo, kukuha sila ng dummy.

Ang pangatlo, ang sinasabi ngayon ni Mr. Bangayan, na ang tingin niya, ang joint venture ay pwede. Meaning, hindi sila dummy. Kasyoso sila. Yun nga lang, dahil siya ang nagfinance, mas malaki ang makukuha niyang shares.

Yun po ang gusto kong malaman sa DA. Kung ligal yun, hindi siya smuggler. He was just enterprising. Pero kung iligal yun, dummy lang sila, smuggler siya, dahil ginamit niya at pinaikutan ang batas.

DA Sec. Alcala: Bago po siya makapagtransact sa pagbili ng bigas, dapat registered trader siya ng rice. Ayon sa records ng NFA, he is not a registered rice trader

ASC: So kung registered rice trader siya, he can deal with coops? That is legal?

DA Sec. Alcala: Iba pa din po yun. Yung mga magsasaka ay dapat tulungan ng pamahalaan to finance.

ASC: Yung dapat silang matulungan ng pamahalaan, policy yun. Pero yung policy ba as far as joint ventures, kung gusto ng farmers na mag-import at wala silang pera, at ang gobyerno ay walang sapat na facilities, ang lalapitan nila, mga nagpapa 5-6 o mga tao na katulad ni Mr. Bangayan. O hindi na lang sila sasali.

But under the rules of MAV, if they do get a partner, at kahit sabihin mong ginamit sila at inalatuhan lang sila, is that prohibited or allowed?

DA Sec. Alcala: Dapat po kasi may financial capability talaga.

ASC: SO kapag sumali sila at sinabi nilang may financial capability sila pero wala naman talaga, they already made misrepresentation?

Under your rules, kapag ang farmer coop o association, kapag may financial capability, hindi kasama doon ang joint venture sa private trader?

DA Sec. Alcala: Kung wala pong kapabilidad, dapat po kahit may letter of credit po.

ASC: Ito lang po ang manifestation ko. In other investigations, nagdedeny ang witnesses. Hindi natin mabuo ang facts. In this case, iba. Inaamin ng witness na in fact he traded at inaamin niya na ginamit niya ang ibang cooperatives pero sinasabi niya na ligal. That is why, ang natitira pong dapat gawin is for the committee to find out kung legal o hinde, as for the facts, inaamin naman ng witness.

That is just what I wanted to point out. Minsan lang tayo magkaroon ng witness na nilatag talaga ang allegation sa kanya.

Sen. Villar: I think inamin niya because obvious na.

ASC: Ma'am, si Napoles, obvious na hindi pa din niya inamin.