An organization of domestic industries on Tuesday asked President Marcos to revisit the Department of Agriculture’s (DA) policy on granting tax and duty-free privilege to palm oil importers purportedly for animal feeds in light of alleged rampant cases of technical smuggling.
Federation of Philippine Industries (FPI) chairman and Coconut Oil Refiners Association (CORA) president Jess Arranza said there seemed to be a big discrepancy on how much of the imported palm olein is used for animal feeds and the volume that the Bureau of Animal Industry (BAI) allows for importation.
“We have data that shows the volume of imported palm olein coming in, which has surprisingly increased during the pandemic. It is just a wonder how the big the shipment are and how little is known as the how much exactly is needed for animal feeds compounding,” Arranza said in a press briefing.
The group made the appeal in a follow-up letter to the President, who is also the concurrent DA Secretary, to reiterate their intention to work with Agriculture Undersecretary Domingo Panganiban in stamping out the illegal use of imported palm olein by unscrupulous traders.
“The DA should also revisit this policy of allowing zero VAT and duty free importations of palm olein as this is clearly hurting the local coconut and palm oil farmers and producers. There should be strict validation relative to such reason given by importers and effective monitoring on where these importations are actually utilized,” Arranza said.
In a previous letter, Arranza informed President Marcos that he got hold of documents that may help the government in going after traders who managed to get duty and tax-free privileges from the Bureau of Animal Industry (BAI), but used their importations for purposes other than compounding of animal feeds.
The imported palm olein allegedly ended up in the market as cooking oil or were channeled to bio-diesel producers as substitute to the more expensive coconut oil. Arranza added that he and other industry leaders are ready to help the DA in launching an investigation on the issue.
Arranza noted that the DA failed to fully grasp the situation, particularly since there is no “animal grade” palm olein, and this is probably because the office of Panganiban did not bother to coordinate with him and other industry players to get the necessary inputs.
“We understand that this is merely a preliminary update but unfortunately, he (Panganiban) has not responded to my request to meet or dialogue with him so I can share what I know about the problem as expressed in my letter to His Excellency. Also, his office has not responded to calls made by my office to obtain an appointment with him,” Arranza said.
He also questioned why feed millers were using food grade palm olein, which is the highest and most expensive form of palm oil, the cheaper refined, bleached and deodorized palm oil is available as compounding agent for feeds.
In his second letter to the President, Arranza reminded him that the problem was the apparent laxity on the part of the BAI in issuing permits to import palm olein on VAT and duty-free basis.
Arranza, also the chairman of Fight Illicit Trade (FightIT), said the investigation should zero in on BAI, since to import tax-free and all the recipient of BAI exemption “to prove that what they imported VAT-free and duty-free were really used for feeds compounding, and if not they should be put behind bars because they are killing the coconut industry and stealing money from the government.”
“There is no closure yet on this issue; we opened it and we have to close it fairly, expeditiously, and ferret out all illicit acts attendant to this issue, otherwise there’ll be room for other interpretations, and I thank the President for giving importance to my plea,” he added.