Suspend tax perks for Thai agri firm – lawmakers

MANILA, Philippines - Two committees of the House of Representatives urged the Board of Investments (BOI) yesterday to suspend the tax privileges it has granted Thai agricultural giant Charoen Pokphand Foods (CPF), which is expanding its operations in the country.

The committee on agriculture and food, chaired by Batangas Rep. Mark Mendoza, and the special committee on food security, headed by Rep. Agapito Guanlao of the party-list group Butil, made the call in the course of a hearing on CPF’s tax perks.

“The BOI should hold in abeyance the tax holidays granted to CPF, which other investors do not enjoy. We have to carefully study the adverse effects of the Thai firm’s projects on the local hog-raising sector, particularly backyard raisers,” Guanlao said.

The Thai firm, which started its business in the Philippines in 2007 in Cebu, has bought land in Floridablanca and San Fernando in Pampanga, Gerona in Tarlac, Jaen in Nueva Ecija, and Samat in Bataan, where it plans to build hog farms.

Trade Undersecretary Adrian Cristobal Jr. and BOI Director Lucita Reyes promised to review CPF’s tax privileges but refused to give the committee documents relating to the grant of such incentives, claiming they are confidential.

The two committees decided to issue a subpoena for the production of such documents in their next hearing.

Aside from the tax perks, Guanlao and Mendoza said they want to find out how the Thai company managed to accumulate at least 100 hectares of agricultural land in Central Luzon for its planned hog farms.

Nestor Floranda of the Department of Agrarian Reform told the two committees that 80 percent of farmlands in Luzon is already in the hands of beneficiaries of the comprehensive agrarian reform program.

“We are not against foreign investments, but it is our duty to protect the program and its farmer-beneficiaries,” he said.

He said it was not possible for CPF to buy land from agrarian reform beneficiaries, who are prohibited under the law from disposing of their lots except to the government or their legitimate heirs.

During the hearing, Rosendo So, who heads a group of hog growers, said the BOI approved the Thai firm’s tax privileges despite their opposition.

He said while the firm would invest an additional P4 billion to P7 billion and create some 1,800 jobs, it would displace many local raisers and tens of thousands of workers.

So questioned why the BOI classified CPF as a “pioneer” in the local swine industry, which qualified it for tax breaks.

“When they started operations, they bought local breeder stocks. How can that be considered pioneering?” he asked.

Other hog growers warned the BOI that CPF’s expansion could lead to the collapse of many small and backyard farms.