Rice farmers were estimated to have lost P890 million between January and April this year from the alleged undervaluation of rice imports that arrived in the country during the period, an industry group said.
Based on the Federation of Free Farmers’ (FFF) latest analysis, the Bureau of Customs (BOC) had failed to collect P890 million in tariffs during the first four months from importers who declared lower prices of their imports compared to the BOC’s own reference prices.
The agency’s reference price list is based on prevailing rates in the international market, which was supposedly the benchmark for import prices.
FFF said about one-third of the volume imported was undervalued by at least 10 percent, and accounted for 84 percent of the tariff shortfall. In one instance, a shipment of 6,014 metric tons (MT) of 5-percent broken rice arrived from Vietnam in April with a declared value of $319.63 per MT—30 percent lower than BOC’s reference price of $447 per MT.
In addition, the group noted that importers spent only $0.33 to insure and ship rice from countries like Thailand and Vietnam, against the internationally published rate at a minimum of $33 per MT.
“If this is the practice, what then is the purpose of the reference rates? What will now stop an importer from conniving with the exporter to issue undervalued invoices or issue two separate invoices to split the total cost of the importers?” FFF national chair Raul Montemayor said.
While Assistant Customs Commissioner Vincent Maronilla admitted that the group’s analysis was close to their own data, he said in a phone interview with Inquirer that the alleged undervaluation instances were still being assessed by the agency’s internal committee and would not remain unchecked.
“The majority if not all of the shipments that were below the reference price were paid by the tentative assessment rule with a corresponding cash bond. We adapted this assessment to fast track importation and manage the capacity of our personnel during the [enhanced community quarantine], which is a mechanism that can be used under the [World Trade Organization] parameters. That means we will accept the imports but eventually we’ll have a hearing to ensure the actual value of these imports. If they are really undervalued, we will forfeit the bonds [posted by importers],” he said.
“There are determinations to be made. We also have a postclearance audit … The timeline for this usually takes three months, but our problem is the community quarantine so we are operating with a limited workforce,” he added.
The FFF had flagged similar anomalies in 2019 which resulted in an estimated tariff shortfall of P1.9 billion.
Under the rice tariffication law, the government is mandated to pour P10 billion yearly into the rice industry for six years, which is to be sourced from tariff receipts.
Anything in excess of the P10 billion may be used for additional support programs for farmers and will be appropriated by Congress.
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