Probe on undervaluation of rice imports urged

MANILA, Philippines — President Marcos is being urged to investigate undervaluation of rice imports, which has already resulted in nearly P4 billion in losses for the government this year, according to a farmers’ group.

In a statement, the Federation of Free Farmers (FFF) said the rampant and worsening undervaluation of rice imports is estimated to have shortchanged the government by as much as P3.84 billion as of end July.

The Bureau of Customs (BOC) recently intercepted a shipment of 38,400 tons of rice worth P1 billion unloaded at Iloilo port on suspicion of smuggling.

BOC commissioner Yogi Filemon Ruiz had ordered an investigation into the four rice shipments that arrived from Vietnam on board 20 vessels at the Iloilo port.

But BOC Region 6 officials quickly claimed that the shipment was above board and that the importers had even paid customs duties amounting to P83 million.

However, the FFF claimed that the BOC should have collected at least P350 million on the P1-billion shipment based on the official tariff rate of 35 percent, indicating that the imported rice was undervalued by as much as 75 percent.

Data from the BOC showed that this is not an isolated case.

From January to June, 85 percent of the 2.28 million tons of imported rice were undervalued by an average of P5,664 per ton. In 2021, the average rate of undervaluation was P4,764 per ton.

Imports of Basmati rice, a premium rice grade from India and Pakistan, were still undervalued by 44 percent even though former president Rodrigo Duterte had already reduced the tariff from 50 percent to 35 percent starting in May last year.

“Despite repeated dialogues with the BoC and several Senate hearings, very little has actually been done to curb undervaluation of rice imports. There is a lot of attention on smuggling but government losses from undervaluation are probably much larger.  And it is easier to plug loopholes to prevent undervaluation than to run after smugglers,” FFF national manager Raul Montemayor said.

The FFF lamented the fact that the BoC inexplicably stopped publishing reference prices starting August 2021 for certain rice grades that were being regularly imported.

As a result, 14 percent of the import volume up to July could not be checked for undervaluation, compared to only seven percent last year.

The FFF also asked President Marcos to investigate the pattern of imports in certain ports of entry.

“It is difficult to understand why importers are unloading huge volumes in Iloilo, when the province, and the whole Region 6, is the rice granary of the Visayas. It would be more logical to bring them directly to deficit provinces like Cebu, Samar and Leyte. To make matters worse, the imports are coming in just when farmers in Iloilo are just about to start harvesting,” Montemayor said.