April 14, 2017

Another Laviña and another Kidapawan Massacre if Usec Valdez stayed?

And this story has something to do with the termination of Peter Tiu Laviña. AWESOME!

President Rodrigo Duterte’s termination of Undersecretary Maia Halmen Valdez sent shockwaves throughout the country [Inq]. One of the most trusted aides of Cabinet Secretary Jun Evasco, the Boholanon was the third to go onto the chopping block, after Irrigation Chief Peter Tiu Laviña [Star] and Interior Secretary Mike Sueño [Star].

Citing his uncompromising stance against corruption, Duterte fired Valdez after the latter usurped the powers of her superior after she extended the National Food Authority’s rice importation deadline, a task that’s supposed to have been solely in the power of the NFA Administrator subject to the approval of the President [Inq].

Duterte, from the very start, prohibited rice importation during harvest season, as the massive influx of cheap imported rice at this time causes prices to fall drastically, hurting the livelihood of Filipino farmers.
Usec. Maia Halmen Valdez
Was Valdez just a tad too overzealous, or is there a reason behind what she did?

After asking around, it appears that the sacked undersecretary’s father has much to gain from Valdez’s moves.

The Power Structure

But before that, it’s essential for the reader to gain a basic understanding of the underlying power structure, i.e. who-does-who.

At the top of the food chain is President Duterte, and right below him is Cabinet Secretary Jun Evasco. For unknown reasons and via Executive Order No. 1 [Gov], Duterte delegated the oversight of some twelve agencies to Evasco.
Sec. Evasco chairs these twelve agencies ex officio, or by virtue of his appointment. Of course, Evasco is just one man, so it’s virtually impossible for him to attend all the board meetings of all his agencies. As a remedy, he made Pres. Duterte appoint undersecretaries, undersecretaries who help him in overseeing the agencies’ operations.

The three Evasco-led agencies relevant to this article are:
  • National Food Authority (NFA)
  • Philippine Coconut Authority (PCA/Philcoa), and
  • National Irrigation Administration (NIA).
And here’s where Undersecretary Valdez comes in.

Acting as a de facto executive assistant, Valdez is presumably close to Evasco. Palace insiders and I are not exactly privy to Valdez and Evasco’s shared background. However, she has to be someone whom Evasco trusts very well.

That is, Evasco chose Valdez despite [Palapos 2014]:
  1. She was merely a political affairs officer for a Zamboanga congressman. A relatively minor post, a sudden appointment as undersecretary is a big leap. 
  2. The Zamboanga congressman she worked for was Isagani Amatong, a member of the Liberal Party.
As an undersecretary, Valdez oversaw NFA, NIA, and PCA, acting as de facto Chairperson, being Evasco’s representative in these three agencies. 

Ricenomics 101

To begin, the reader has to have a working understanding of Philippine “Ricenomics”, which focuses mainly on controlling the country’s rice supply.

Rice shortages are common in the Philippines [Onofre 2008], and these are addressed through two mechanisms [RiceHQ].

FIRST is Government-to-Government (G2G) procurement, or the Philippine Government directly enters into a contract with a foreign government that has excess rice to export.

SECOND is the “Minimum Access Volume (MAV) Program”, which allows private importers to import rice with lower tariffs.
Tariffs are taxes levied on imports, mainly as a source of government income, and also as a means to protect a local industry. Raising tariffs makes imports more expensive, allowing locally produced equivalents more competitive. Meanwhile, lowering tariffs makes imports more affordable for Filipino consumers.
MAV quotas are set yearly, with the NFA tasked with the issuance of importation permits to private rice importers… and MAV is where corruption begins.

Now that that's out of the way, it's time for the writer to teach you corruption.

Minimum Access Volume Program

NFA's 2016 MAV Program sets our importation limit at about 800,000 metric tons [NFA], and NFA sources told the writer that the agency issued 193 permits to different private companies.

Now, NFA sources informed the writer that NFA officials from the past administration, in exchange for issuing rice importation permits, receive about Php 10 million in bribes per permit. With 193 permits issued last year, this translates to a total of around Php 1.93 billion in dirty money. 

Whoever received that would have been a very, very wealthy (and corrupt) man.
The bribes make business sense, as rice imported through MAV costs US$ 400 per metric ton on the average, so that 800,000 metric tons of imported rice costs US$320 million, or about Php 16 billion if converted with US$ to Php at 1:50.  

Clearly, Php 16 billion dwarfs Php 2 billion.

Even Rappler's Michael Bueza, who sucks in math, should know that [TP: Rappler's EJK Math].

Inefficient Rice Traders

Rice importers are businessmen, so they need to make the most out of the bribes they’ve paid. Unfortunately, many of them are inefficient so they weren’t able to maximize their respective rice importation limits before the importation deadline expired on 28 February 2017 [NFA].

Cabinet Secretary Jun Evasco (L) and President Rodrigo Duterte (RO+)
Specifically, NFA sources said these permit holders managed to import only 580,000 metric tons, or just 80 percent of the MAV limit.

To address this issue, Usec Maia Valdez, without Sec. Evasco’s signature and without consulting President Duterte, attempted to extend the deadline to June 2017 [NFA]. Valdez essentially usurped Evasco’s authority and violated Duterte’s directive that no rice shall be imported during harvest season, which starts in May 2017.

And that is why Duterte terminated Valdez. But why did Duterte prohibit rice imports during the local harvest season?

That is what will be explained next.

Duterte: No to Rice Imports for now

Basically, Duterte wants to prevent another Kidapawan Massacre, when the farmers got so poor and so hungry because of the drought that they protested until they got murdered by the Aquino Government.

Kidapawan Carnage: When negotiations broke down
Policeman: Naga-appeal kami sa inyo na itong area [ay lisanin niyo na].

Negotiator: Instead of [you] appealing to us, we should appeal to the governor, na ibigay na ang hinihingi [na bigas] ng mga magsasaka. Sa governor kayo mag-appeal, hindi sa mga raliyista. Hindi sa mga biktima.

(Farmers refused to disperse. SWAT team started opening fire on the farmers.)

#BigasHindiBala #DaangMatuwid #StopLumadKillings #Poe2016 #Duterte2016 #Binay2016 #RoxasRobredo #Roxas2016 #Halalan2016 #PHVote #BilangPilipino
Posted by Thinking Pinoy - RJ Nieto on Friday, April 1, 2016

Duterte wants to help poor farmers earn a decent living, so his decision against rice importation during harvest season means local traders will need to buy at higher prices, to the benefit of the farmers.

Duterte’s policy may translate to higher costs on the part of the average consumer, but this is market socialism at work, this is income redistribution. That is, Filipinos with better-paying jobs pay more to help poor farmers who earn so little.

Truth be told, almost any job pays better than farming.Valdez’s unilateral decision to extend MAV means rice traders can still import rice during the harvest season at approximately P17 per kilogram. This means local farmers will have to compete with rice imports, forcing them to sell their produce at costs lower than what would have been if MAV was ended in February.

It’s simple supply-and-demand.

What’s worse, the Department of Agriculture expect a bumper crop in May [Star]. That is, poor farmers generally expect a very plentiful harvest, which means they can use this season’s income not only to offset losses in the previous years due to El Niño, but also as insurance against future adversities.

With Valdez’s decision, another Kidapawan Massacre [TP: Roxas Speechwriter] during the next El Niño is not unlikely.

Maia’s Defense

The article has so far focused on MAV, and has largely left out Government-to-Government (G2G) rice importation contracts, and here’s where G2G comes in.

“In their desperate attempt to convince the President to resort to G2G, the Agriculture Secretary, who has been meddling on the functions and affairs of the OCS, and the NFA administrator have made it appear as if there is a shortage of rice in the country, causing alarm and possible upward movement in the prices of commercial rice,” Valdez said in a statement [MS].

Valdez accused Piñol and Aquino of pushing for G2G, which she said will raise rice prices.

G2G imports, however, are stored by NFA and for sale only in cases when there is a shortage, real or artificial, with the latter caused by hoarders or speculators. Otherwise they are not for commerce, as they are provided to government agencies dealing with calamities [NFA].

In short, G2G rice imports are emergency stocks provided to government agencies, such as local government units, during calamities. They are not readily introduced into the local market, so they largely do not affect rice prices.

So her defense falls flat on its face. Valdez probably knows this, but why does she insist on it?

Personal gain [NFA], and that shall be elaborated in the next section.

Why did Valdez do what she did?

Valdez’s illegal order to extend MAV could have been attributed to excessive dedication, something that, despite being illegal, could be considered admirable on a certain level. However, sources from the National Bureau of Investigation (NBI) disagree.

NBI sources said Valdez is under investigation for violating the Anti-Graft and Corrupt Practices Act (RA 3019) and the Code of Conduct for Public Officials (RA 6713). The sources said they received reports that Valdez received bribes from rice importers who have yet to fully utilize their respective allocated quotas.

In short, Valdez allegedly received bribes so corrupt rice importers can make more money, to the detriment of poor Filipino rice farmers.

But wait, there’s more!

The same NBI sources informed the writer that they are investigating Valdez for allegedly colluding with her father, who shall benefit from MAV’s extension after NBI received reports that he has links with rice smuggling.

Usec Maia Halmen Valdez’s father Halleck Valdez [BCC] is the customs collector at the Port of Zamboanga [Ports].
With MAV, all that a rice smuggler has to do is “fix” rice importation documents. For example, a rice smuggler can opt to pay taxes on just half of the rice shipments and, in collusion with a customs collector, import the other half tariff-free. 
But without MAV, rice importation is downright illegal, so it makes their smuggling more difficult, as our ports cannot accept even a single grain of rice.
Assuming the elder Valdez has smuggling links, he stands to gain from MAV’s extension.

But that means every corrupt customs collector in the country will benefit from MAV’s extension too, so did the younger Valdez receive bribes from officials of other ports?

And the reader is probably already very familiar with how much Duterte hates rice smugglers.

NFA Administrator Jason Aquino earlier released a 27 February 2017 letter to the NBI requesting the to investigate the attempted MAV extension's links with unscrupulous rice traders engaged in smuggling [NFA]. 

Aquino did not explicitly mention Valdez in the said letter.

The Peter Tiu Laviña Angle

Valdez is just an undersecretary, yet she appears to exercise an incommensurate level of influence in the bureaucracy. The writer has reason to believe that Sec. Evasco, her principal, has no history of corruption. However, the fact remains that Evasco trusts her more than most.

But trust is a very relative word, so it’s important to gauge how much of Evasco’s trust Valdez enjoys.

Sources from the National Irrigation Administration (NIA) and the Philippine Coconut Authority (PCA) explained how much influence Valdez has on Evasco.

FIRST, Valdez allegedly conspired with several power players inside the bureaucracy to get NIA Administrator Peter Tiu Laviña fired by finding ways to show that the latter condones corrupt practices of NIA officials. Laviña was essentially terminated because the NIA officials under him are corrupt.

Going by that logic, Duterte should be impeached because there are corrupt public servants under him. That doesn’t sound right, but it happened anyway, allegedly thanks to Valdez’s machinations.

SECOND, Valdez allegedly convinced Evasco to the suspend PCA Administrator Avelino Andal.

“There’s an alleged illegal collection of P1.50 per board foot of lumber in Basilan by Andal’s trusted employees. We also received sworn statements stating that he is the mastermind of such scheme,” Valdez told the Philippine Star [Star] in March.

PCA sources rejected Valdez’s claim and said Andal actually issued an order to investigate erring PCA employees. However, Valdez allegedly found ways to link Andal with the illegal acts of his subordinates.

Yes, it appears that Evasco highly trusts Valdez, who later appears to be less savory than expected.

Is this how Valdez expected to get away with the illegal MAV extension?

As to whether Evasco is complicit in Valdez’s alleged acts or not, neither the writer nor his sources know, although Evasco’s alleged dislike for NFA Administrator Jason Aquino (not related to the Cojuangco-Aquinos) helped Maia’s cause.

Truth be told, Evasco even threatened to resign as NFA chairman over the MAV issue if Duterte doesn't fire Aquino [Evasco]. The problem, however, is that he remains NFA chair as long as he's still Cabinet Secretary by virtue of EO 1, so he can leave NFA only if he resigns from the cabinet.

Evasco, however, did not tender his resignation as Cabinet Secretary.

More importantly, did Valdez deceive Evasco? It's anybody's guess.

But Evasco appears so convinced that he even granted several exclusives to a college sorority blog [Rappler], even going as far as calling the Palace "a snake pit" [Rappler].

Oh, well.


Rice traders, especially those involved in rice smuggling, stand to benefit the most from Valdez’s decision to extend the MAV program. And with MAV’s extension, poor farmers, like those in Mindanao, will earn a lot less than they would if MAV was allowed to expire.

Valdez’s decision, in short, lends truth to the saying:

The rich get richer, the poor get poorer.

With Valdez’s decision, the poor Kidapawan farmers will be just as poor as they were last year, the same year they begged for food and were given bullets instead.

Will there be another Kidapawan Massacre if Usec Valdez stays?

Thankfully, she’s already fired. [ThinkingPinoy]

DONT FORGET TO SHARE! Did you like this post? Help ThinkingPinoy stay up! Even as little as 50 pesos will be a great help!