THE Federation of Free Farmers (FFF) is urging the government to look into the undervaluation of rice imports which has resulted in foregone tariffs of as much as P7.7 billion in 2022.
Citing data from the Bureau of Customs (BOC), FFF National Manager Raul Montemayor said the country imported 3.85 million metric tons (MMT) of rice last year, the highest since the rice tariffication law (RTL) was enacted in 2019.
Montemayor said over the weekend that the rice shipment values that were declared by importers in 2022 were 28 percent lower than the BOC’s reference prices on the average.
“Landed costs were declared as P16.94 per kilo in 2022. These should have been around P23.62 kilo on the average, based on BOC rates. If we apply the 35 percent tariff to these declared values, the importers in effect shortchanged the BOC by P2.34 for every kilo they brought into the country,” he said in a statement.
FFF claimed that the degree of undervaluation has been “consistently deteriorating” over the years, despite repeated assurances from the BOC that it would curtail the practice.
In 2019, the group said the average rate of undervaluation was only 15 percent. In the next two years, it averaged around 20 percent, before reaching its peak of 28 percent in 2022.
“Importers are now becoming bolder and greedier, and it seems the BOC is condoning—if not turning a blind eye to—the practice of undervaluation. This is happening not only with rice, but also to most other commodities like meats and vegetables,” Montemayor said.
In particular, FFF claimed that rice shipments from Pakistan were “severely undervalued” by 37 percent, despite the fact that the government had already cut tariffs for non-Asean countries to 35, purportedly to diversify the Philippines’s sources of rice.
Under the RTL, tariff collections from rice imports in excess of P10 billion in a given year will be earmarked for cash transfers to farmers adversely affected by imports.
The FFF again called for a review of the RTL as retail prices have “hardly moved” despite the influx of cheap rice imports and the decline in farm-gate prices.
In August 2022, Montemayor asked the government to investigate the undervaluation of rice imports which was estimated at P3.84 billion in January to July last year.
He said data from BOC showed that from January to June 2022, 85 percent of the 2.28 MMT of imported rice were undervalued by an average of P5,664 per metric ton (MT).
The group also noted that the BOC intercepted shipment of 38,400 MT of rice being unloaded at Iloilo port on suspicion of smuggling.
Image credits: Nonie Reyes