Locked down

Now it is official: President Aquino admits to ordering DILG undersecretary Rico Puno to lock down Jessie Robredo’s office.

That, at least, provides some official cover for Puno’s actions the day after Robredo’s plane crashed. The President does not recall including Robredo’s condominium unit in his lockdown order but says he does not fault Puno for visiting the place. Aquino affirmed his continuing trust and confidence in his loyal, albeit beleaguered, friend.

At the same time, the President announced he was asking PNP Chief Nicanor Bartolome to take early retirement to assume Puno’s DILG post. Puno, it appears, will relocate to another post. Bartolome, for his part, sounded surprised by the turn of events.

The announcement seems to contradict Mar Roxas’ claim that he was being given full control of the DILG, including choosing all his subalterns in this powerful agency. It seems Aquino will still choose his preferred nominee for police affairs.

We have not heard anything from Mar Roxas yet after all these recent statements. Since Congress is still in session, he cannot fully assume his new post until he is confirmed by the Commission on Appointments. Imaginably, Roxas might take Aquino’s statement about replacing Puno with Bartolome a letdown.

It took little convincing for Mar Roxas to accept the DILG appointment. Some insiders say he angled vigorously for the post to keep this powerful department firmly under LP control. This is a vital vantage point not only for party-building but, more importantly, for preparing the ground for Roxas to resume his quest for the presidency in 2016.

It does not seem coincidental that information about Puno’s “raid” on Robredo’s domicile and about “investigations” conducted against the undersecretary leaked out only after it became clear he was not about to be taken out of his post. The President had appointed his Executive Secretary to be OIC at the DILG. His Executive Secretary, in turn, denied that Puno has been relieved or that he has resigned.

Earlier, voices identified with the LP bloc announced Puno had resigned (in effect to make way for Roxas’ appointment of his own man for the post). When it seemed that Puno might be difficult to uproot, a loud media chorus broke out itemizing “sensitive investigations” and demanding the President dump the man.

The plot, it seems, thickens by the day. What is clear is that LP partisans are not about to rest until Puno himself is locked down somewhere far away from what this faction considers its spheres of influence.

Economic threat

Too bad President Aquino failed to meet up with his Chinese counterpart on the sidelines of the APEC meeting in Vladivostok. There are many bilateral issues between our two countries, beyond the disputed shoals, that require urgent attention.

One of these issues concerns subsidies China provides her industries to export products their home economy can no longer support. Without intending it, Beijing’s policy could wipe out entire industries in the small economies of this region. Among the subsidized exports are steel products that now threaten, abetted by technical smuggling, our entire steel industry.

China is the world’s largest steel producer, with a manufacturing capacity exceeding 900 million metric tons a year. The US, second largest steel producer, accounts for only 64 million metric tons a year. Our total steel production is a miniscule 1.5 million tons annually even as the building boom has raised domestic demand to 2.5 million tons a year.

With the slowdown in China’s economic expansion, she now has a humungous excess steel manufacturing capacity of about 300 million tons. Subsidies for exports intend to encourage shipment of steel products abroad that will spare China from having to shut down hundreds of steel mills.

What that means, on our end, is that our domestic industries face a tsunami of Chinese steel exports that will swamp whatever little is left of our domestic manufacturing base, eradicating tens of thousands of industrial jobs. That destructive tsunami of exports is helped along on the Chinese side by manufacturers wrongly classifying semi-processed goods as finished products. It is helped along, on the Philippine side, by incompetent and vulnerable Customs personnel as well as inadequate policies.

For instance, large quantities of steel billets entering our ports last month were classified as finished products because Chinese exporters simply added boron, an unnecessary element in steel production, so that their exports may be classified as finished products for subsidy purposes. Other shipments wrongly declared billets as square rods.

Other unscrupulous Filipino importers simply undervalue the cost of the products they bring in to lower duties and taxes due, undercutting domestically produced steel. They are partners in the effective dumping of manufactures from over-capacitated China.

Alleged to be one of the notorious importers is Joyland Industries based in Mandaue, Cebu. For years, this firm declared the price of its imports of steel bars at less than half the prevailing market price for unprocessed billets. In fact, they valued their imports at substantially lower prices than scrap metal.

When confronted by local manufacturers about what, in effect, is technical smuggling on a large and continuing scale, Customs personnel simply shrug their shoulders and say they basically accept any transaction value an importer declares as long as it is notarized. Government lost hundreds of millions in potential revenues because of this excuse.

In the case of steel products, all our people in Customs have to do is to log on the website and see prevailing world prices for all products indicated in the Metal Bulletin Weekly. They may then effectively check undervaluation of imports.