The Federation of Free Farmers (FFF) asked President Ferdinand Marcos Jr. to investigate the worsening undervaluation of rice imports, which is estimated to have shortchanged the government by as much as P3.84 billion during the first seven months of 2022 alone.
FFF national manager Raul Montemayor said the group has had numerous meetings with the Bureau of Customs (BOC) and attended several Senate hearings, but “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,” he said.
The group cited a recent interception by the Bureau of Customs of a shipment of 38,400 tons of rice being unloaded at Iloilo port on suspicion of smuggling.
However, BoC Region 6 officials claimed that the shipment was aboveboard and that the importers had even paid Customs duties amounting to P83 million.
But the FFF said 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.
The group said data from the BoC showed that the incident is not an isolated case. Between January and June 2022, 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, have been undervalued by 44 percent despite the fact that the former President had already reduced the tariffs on its importation from 50 percent to 35 percent starting in May 2021.
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 in the first seven months of 2022 could not be checked for undervaluation, compared to only 7 percent in 2021.
The FFF also asked the President to investigate the pattern of imports in certain ports of entry.
Montemayor noted how difficult it is 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,” he said.