Sponsorship Speech of Senator Cynthia Villar
On Senate Bill No. 1086/ Committee Report No. 12
("Anti-Agricultural Economic Sabotage Act")

Mr. President, esteemed colleagues, good afternoon.

I rise to sponsor this substitute bill, Senate Bill No. 2432 or the "Anti-Agricultural Economic Sabotage Act", under Committee Report No. 118 of the Committee on Agriculture, Food and Agrarian Reform and the Committees on Justice and Human Rights; Finance; and Ways and Means taking into consideration bills introduced by Senators JV Ejercito (1688), Lito Lapid (1812), Ramon "Bong" Revilla (1891), yours truly (1962), Senators Joel Villanueva, (2127), Riza Hontiveros, (2205), Robinhood Padilla, (2214), Ronald "Bato" Dela Rosa, (2413), and Raffy Tulfo (2298); taking into consideration Senate Resolution 206 by Senator Imee Marcos and House Bill No. 3917 introduced by Representatives Marcos, Nograles, Luistro, et.al., which seeks to define and propose stiff penalties for agriculture economic sabotage to include not only smuggling but also hoarding, profiteering and cartel.

The measure would repeal the Anti-Agricultural Smuggling Act of 2016 or Republic Act No. 10845. With no conviction made seven years after the Anti-Agricultural Smuggling Act the, law as "a failure" at the hands of the Bureau of Customs (BOC), which as provided for in SEC. 6. Implementing Rules and Regulations of the existing law was mandated to promulgate the implementing rules and regulations of the existing law within thirty (30) days upon its effectivity. It's been seven years and there is not a single conviction.

Mr. President, according to the Samahang Industiya ng Agrikultura or SINAG, the Philippine government is losing at least P200-billion revenues a year due to smuggling. Smuggling brings about unfair competition for locally produced goods because it floods the market of cheaper agricultural products; it puts undue risk to our consumer's health, deprives the government of revenues from uncollected taxes and customs duties, encourages corruption and threatens the rule of law.

Smuggling is one of the reasons why many of our farmers continue to live in poverty. The illegal entry of agricultural products threatens their livelihood and the welfare of two-thirds of our population who depend on agriculture. Illicit trade exposes consumers to unregulated products often manufactured in unsanitary conditions. Farm commodities being smuggled into the country include sugar, corn, pork, poultry, garlic, onion, carrots, fish, and cruciferous vegetables as per data cited by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture.

Smuggling of Tobacco has been included in the measure, with the estimated revenue loss from excise tax alone amounts to around P24.7 billion. According to Euromonitor reports, it is estimated that 16.7 percent or about 9.52 billion sticks of the total cigarette volumes sold in the Philippines will come from illegal sources in 2022. Most illicit cigarettes are shipped from Cambodia, Vietnam, and China, and enter through Sulu and Tawi-Tawi.

In 2022, the National Tobacco Authority (NTA) recorded a total of 43.81 million kilograms of tobacco produced by the local farmers, of which 53 percent or 23.21 million kilograms were exported and 47 percent or 20.59 million kilograms were supplied to the local tobacco manufacturers. Tobacco is produced by farmers in Ilocos Norte, Ilocos Sur, Abra, La Union, Pangasinan, Isabela, Cagayan, Nueva Vizcaya, Quirino, Tarlac and Occidental Mindoro. To date, the tobacco industry employs at least 2.1 million people, including more than 430,000 farmers, farm workers and their family members.

The increased tax made the smuggling of cigarettes an even more lucrative business. It may worsen the country's problem on smuggling. Illicit tobacco trade reduces the effectiveness of public health policies designed to discourage smoking, with unregulated, substandard quality and non-compliant products, it makes it easier for minors to access tobacco products and undermines the legitimate industry's business.

Suggested provisions in the proposed law are the following:

Economic sabotage shall refer to any act or activity that disrupts the economy by creating artificial shortage, promoting excessive importation, manipulating prices and supply, evading payment or underpayment of tariffs and custom duties, threatening local production and food security, gaining excessive or exorbitant profits by exploiting situations, creating scarcity, and entering into agreements that defeat fair competition to the prejudice of the public.

The creation/establishment of the Anti-Agricultural Economic Sabotage Council which shall be under and chaired by the president with 15 members. Whose powers include the formulation of a national plan to address and counter the agricultural smuggling crimes enumerated. (In the proper time we will amend to state that majority to constitute a quorum shall one third or six members).

The Department of Justice DOJ is mandated to constitute a special team of prosecutors all over the country, which shall evaluate evidence submitted, consolidate criminal complaints apply for the issuance of warrant, initiate the conduct of preliminary investigation.

Create an Anti-Agricultural Economic Sabotage Enforcement Group composed of seven government law enforcement agencies and representative (s) of concerned agricultural sector whose participation shall be defined by the Council, who shall effect searches and seizures, arrests and filing of cases before the prosecutor and appropriate agencies.

Custody and disposition of confiscated, seized agricultural products and properties used in the commission of the crime: for highly perishables goods a video recording or photograph with the presence of the accused or his counsel with an elected public official and a representative of the National Prosecution Service or the media, shall within 24 hours after a video is taken shall destroy the same.

For non-perishable goods, an inventory shall be taken in the presence of the presence of the accused or his counsel with an elected public official and a representative of the National Prosecution Service or the media, within 24 hours upon confiscation, store the same in a designated place by the Council.

Once the case is filed, the Court may within seventy-two hours (72hours), conduct an ocular inspection of the confiscated, seized or surrendered Agri and fisheries products, and direct the Enforcement Group within 24 hours destroy the same with the presence of any public official, a representative of the media, the DOJ, Agri-fishery sector representative.

Any government officer or employee who violates the mandatory destruction of agricultural products shall suffer the penalty of life imprisonment.

What to do with goods seized?

Locally - sourced agricultural products subject to the crimes of hoarding, profiteering, and cartel shall be donated by the Council to the KADIWA or succeeding similar program of the DA for sale in its markets, the profits of which shall be used in support of its programs and projects for small farmers and fisherfolks.

Properties used in the commission of the crimes of economic sabotage such as but not limited to vehicles, vessels, aircrafts, storage areas, warehouses, boxes, cases, trunks and other containers of whatever character confiscated, seized or surrendered in favor of the government, to be auctioned off or declared for the official use of Council, with the Special Team of Prosecutors and the Enforcement Group, monetary rewards and other incentives to informers, among others.

DEFINITION OF THE CRIMES

In Agri smuggling as proposed in the bill, mere possession or presence of any of listed Agri products in any BOC-controlled port, fish port, fish landing site, resort, airport or warehouse, cold storage, vessel and other storage area, shall constitute prima facie evidence or violation. The crimes of agricultural smuggling, hoarding, profiteering, and cartel as economic sabotage are committed when the value of each agricultural and fishery product subject of the crime is at least P1,000,000.00, using the Daily Price Index, under Section 19 of this Act, computed at the time the crime was committed.

Aside from agricultural smuggling, several measures are proposed to include hoarding, profiteering, cartel, and other market abuses as punishable acts.

Agricultural hoarding is committed by undue accumulation and unreasonable refusal in the face of the existing shortage of products, artificial or real by person or combination of persons to dispose of, sell or distribute such products to the general public. There shall be prima facie evidence of hoarding when a person has stocks of said products thirty percent (30%) higher than his usual inventory. The determination of the person's usual inventory shall be reckoned from the third month immediately preceding the discovery of the excess stock in case the person has been engaged in the business for at least three (3) months; it shall be reckoned from the time he started his business.

The proposed law defines profiteering as used in this Act is the sale or offering for sale of the agricultural products at a price grossly in excess of their true worth, as indicated in the Daily Price Index, in the face of existing shortage or emergency, artificial or real. There shall be prima facie evidence ("sapat ng dahilan") of profiteering whenever a product being sold has - no price tag or misrepresented as to its weight or measurement; adulterated or diluted; or whether a person raises the price of any of the product being sold by more than ten percent (10%) of its price, using the Daily Price Index.

Cartel as a crime as used in this Act is committed by any combination of or agreement between two or more persons engaged in the production, manufacture, processing, storage, supply, distribution, marketing, sale or disposition of any agricultural and fishery products designed to artificially and unreasonably increase or manipulate its price, involving the agricultural products referred to. This also includes parallel pricing where multiple sellers or traders offer the same or similar product with similar price points leaving the consumer with no choice except to buy the same.

Sa mga naka listang mga halimbawang na naunang nabangit, ito ay "prima facie" ng pag labag at mag bibigay ng karapatan sa mga authorize na miembro o grupo ng bumubuo ng enforcement group para makapasok sa lugar kung saan ang mga agricultural products ay makikita, kumpiskahin ang mga ito at arestuhin ang mga taong nasa lugar ng "krimen."

The measure also increases the jail term for smugglers to 30-40 years, as well as the fine twice the fair value and the aggregate amount of the taxes, duties and other unpaid charges of smuggled items.

It also prohibited for farmers and fisherfolks cooperatives given grants by government in the form of cold storages, warehouses and similar facilities intended for their exclusive use are rented out or made available for the use in any way by non-members, such as traders and other private businesses.

The proposed penalties are:

Life imprisonment for any person who commits or aids in the commission of any of the prohibited acts enumerated.

If a government officer or employee is the offender of the crime, aids in the commission of the crime, or prevents the filing of the case or its prosecution, or the actual arrest of the suspect, the penalty is also life imprisonment and in addition to his/her perpetual disqualification from holding public office, exercise the right to vote, participate in any public election and forfeiture of his/her employment monetary and financial benefits.

The prima facie violation of any of the crimes as economic sabotage herein and the possession of any agricultural products as its threshold amount under section 4 of this act, shall be considered evidence of strong guilt, which renders the offense non-bailable.

If the offender is a juridical person, the criminal liability shall attach to the president, the chief operating officer, manager or any officer who participated in the decision that led to the commission of the prohibited act;

Any person found guilty under this act, shall be perpetually and absolutely disqualified to engage in any business involving importation, transportation, storage, and domestic trade of agricultural products.

Mr. President, my esteemed colleagues

For these reasons, I urge you to join me in enacting this measure.

Thank you, Mr. President.