Sugar money

Before I discus the topic, let me comment on the latest development in the Capitol-Ayala deal which had been pending in the Commission on Audit. There are new developments which are moving fast that, had COA moved this way when it received the proposal for its perusal, it would have avoided a lot of problems and recrimination.

Anyway if things go well as expected, then we can say with Shakespeare, “all’s well that ends well.” In truth I had lined up two columns but they can be sent to the archives.

Now for the sugar money with the decision of the Bureau of Customs declaring that Coca Cola “misclassified” its premix importation and thus has to pay the 38 percent tax on it.

Victory indeed has many fathers but grandfathers and bystanders or those who made the loudest noise jump in as well when big money is involved.

There is a problem here, however because Coke is not likely to grin and bear it. It declared it will challenge the BoC decision and that means this case can go all the way to the High Court. Coke has the luxury of time and piles of money to pay the best lawyers. I doubt if they will just pay up P7 billion without a fight.

Be that as it may, labor leaders of the National Congress Unions in the Sugar Industry seem to be seeing a bonanza and are asking that they get a share. They estimated that Coca Cola will be paying from P7 billion to P8 billion in taxes and penalties.

I hope that they would not be like Maria in the kindergarten ditty counting the money she would get from selling the eggs she carried on the basket on her head. Well, as the song goes, she went like a coquette and the eggs fell down. You know what happened.

Ironically, the planters are not asking that they be restituted, at least we heard none of this sort but the labor groups are demanding restitution. I still cannot fathom the wisdom of their claim because the planters, not the laborers lost with the drop in the price of sugar. The workers were paid their wages.

The planters indeed suffered the drop in the price of their sugar but even this is difficult to determine whether the drop in the price of sugar was directly due to the premix importation. There are many factors in price fluctuation.

I think that, granting Coke losses in its appeal and had to pay, the money will not go to any one person or groups of persons, labor groups especially but to the national treasury.

Since it is impossible to quantify what each planter or miller will receive I think that the best way for the sugar industry to avail of what they possibly had lost due to the importation (this has yet to be proven) is for Congress to set aside this fund and disburse it to the programs of the industry.

The bill that is proposed by Rep. Albee Benitez will need several billions to implement. Again, granting that Coke will have to pay, these billions should be used to finance these projects that will prepare the industry for 2015 when sugar imports be will free of tariffs.

The projects in the Benitez bill are the improvement of the irrigation system and the formation of economic zones that will expand or maximize the usage of cane – from sugar to ethanol, power generation, livelihood programs, fertilizer production, cane variety improvement and improvement of the mill efficiency.

To distribute this money on the presumption that x should receive y for losses in z is shortsighted and will not have little, if at all, impact in terms of helping the sugar industry.

I think that, granting once more that Coke will lose and the money is available in the national treasury, the Benitez bill has great chance of passage because the funds are available.

I went through the latest Benitez bill and I find it less contentious than the first one but I think funding the various programs will be an obstacle. In the event that Coke settles or loses the appeal then the sugar industry – planters, millers and workers will be directly benefited.

The nation, in fact, will benefit not just from an improved sugar industry but from its vibrancy that will create jobs, reduce our dependency on imported fuel and compete in the world market.

This is just being prudent. Distribute this to the workers (what about the planters and the millers who were equally if not more damaged?) and the money will be gone without leaving a trace.

What is important at this stage is to remember about counting the chickens before the eggs are hatched.*

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