Farmers’ group claims P7.7 B loss due to undervalued rice imports

The government lost as much as P7.7 billion due to the undervaluation of rice imports, with a farmer group urging the government to address the issue to help rice farmers.

In a statement, the Federation of Free Farmers (FFF) cited the worsening undervaluation of rice imports, resulting in forgone revenue of as much as P7.7 billion last year.

The country imported 3.85 million tons last year based on data from the Bureau of Customs (BoC). This is the highest level of imports since the Rice Tariffication Law (RTL) was enacted in 2019.

However, the FFF said the rice shipment values declared by importers last year were 28 percent lower than the BoC’s reference prices on the average.

“Landed costs were declared as P16.94 per kilo in 2022. These should have been around P23.62 on the average, based on BoC rates. If we apply the 35 percent tariff to these declared values, the importers in effect shortchanged the BoC by P2.34 for every kilo they brought into the country,” FFF national manager Raul Montemayor said.

The farmers’ group said the degree of undervaluation has been consistently deteriorating over the years, despite repeated assurances from the BoC that it would curtail the practice.

In 2019, the average rate of undervaluation was only 15 percent. In the next two years, it averaged around 20 percent, before reaching its peak of 28 percent last year.

“Importers are now becoming bolder and greedier, and it seems the BoC is condoning – if not turning a blind eye to – the practice of undervaluation. This is happening not only with rice, but also to most other commodities like meats and vegetables,” Montemayor said.

In particular, shipments of rice from Pakistan were severely undervalued by 37 percent, despite the fact that the government had already cut tariffs for non-ASEAN countries to 35 percent, purportedly to diversify the Philippines’ sources of rice.

In light of the situation, the FFF called on President Marcos to act decisively on the problem in order to generate much needed revenues for the government’s support program for farmers.

Under the RTL, tariff collections from rice imports in excess of P10 billion in a given year will be earmarked for cash transfers to farmers adversely affected by imports.

The FFF also stressed the need to review the RTL anew, considering that retail prices for consumers have hardly moved despite the influx of cheap undervalued rice imports and the decline in farm gate prices for farmers.