STRAIGHT FROM THE BIG CITY

Dangers of monopolies
Ike ‘Ka Iking’ Señeres

To call a spade a spade, the corruption at the National Food Authority (NFA) National Capital Region (NCR) wherein one trucker had apparently gotten away with hauling extra loads of imported rice without the benefit of bidding is actually a case of illegal monopoly, an aberration in a country that is supposed to have a free market economy.

It is bad as it is to have the NFA maintain a virtual monopoly of the rice trade to the disadvantage of private traders, it is even worse that one trucker is practically monopolizing the trucking business there to the disadvantage of the other truckers who are actually just owners of small businesses.
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For whatever it is worth, the NFA-NCR has promised to correct the problem, and in my mind, there is no other way to correct this except to just follow the usual bidding rules, making sure that all other prospective bidders are not left out.

As it is now, the worn out alibi that rice is a perishable commodity and therefore urgent exceptions have to be made from the bidding rules makes their entire bidding system vulnerable to corruption. From here on, the NFA-NCR should just proceed on the assumption that rice is indeed perishable, but rules are rules, and they should not bend the rules to favor individual truckers on the basis of lame justifications.
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Generally speaking, “state capitalism” is justifiable if it is done in the national interest, even if it violates the principle of free market economics. Just like the bidding system that is prone to abuse however, the use of state capital has been abused over and over again, citing certain justifications that are far from being acceptable.

Under extreme circumstances, state owned companies would probably be in the right place if they provide services or sell products that would help stabilize the prices of prime commodities or ensure steady supplies for national security reasons, but other than these reasons, these companies should be checked for going beyond their mandated charters.
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While it is true that the Government Service Insurance System (GSIS) is an insurance company, it is my understanding that its primary purpose is to insure its members, meaning the people who work for the government.

Given this background, it already appears unusual and irregular for the GSIS to have a virtual monopoly of the non-life insurance business of the entire government. The private insurance companies are probably just afraid to complain about this irregularity not wanting to risk their licenses to operate, but to again call a spade a spade, this is a monopoly that should have no place in our free market economy.
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Apparently not content with having a virtual monopoly of the government insurance business, the GSIS is reportedly training its eyes now on controlling if not monopolizing the Comprehensive Third Party Liability (CTPL) insurance, a policy that is a requirement for all private vehicle owners that are applying for registration at the Land Transportation Office (LTO).

What is strange about this new monopoly is that its supposed legal basis is a mere Department Order (2007-28) signed by Department of Transportation and Communications (DOTC) Secretary Leandro R. Mendoza.
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Could it possibly happen that two government agencies could just simply connive to provide a service that would directly compete with the private sector if not completely monopolize it? As far as I know, a Department Order is only supposed to be issued for internal directives that would not directly impact upon the public interest.

To put it another way, a widely encompassing order like this should have been issued in the form of an Executive Order assuming that that is legally sound, but it appears that this move should really require an Act of Congress to make it legal.
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With or without an Act of Congress however, it is very clear based on just ordinary observation that the order violates the rights of consumers to buy the CTPL that they want on the free market, without anyone telling them what to buy. To state the obvious, the vehicles requiring CTPL are private properties, and the government has no business telling its citizens where to buy their coverage.

As it is now, there seems to be a common pattern in the recent moves of Secretary Mendoza, imposing government interventions on products or services that are already provided by the private sector. This is also the case of the National Broadband Network (NBN), an obvious duplication of the privately owned broadband networks that are already running and meeting our national needs quite well.
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