PCC probes rice importers involved in undervaluation

Philippine Competition Commission (PCC), the government's antitrust body, is to launch an investigation against rice traders who may have been undervaluing their imports to the detriment of Filipino consumers.

This, as the agency moved closer to securing Supreme Court’s green light to PCC’s proposed Rules on Inspection Orders, which will allow the agency to conduct dawn raids and more means to obtain evidence against parties suspected of anticompetitive practices.

“We are looking at it [the misdeclaration of rice imports], definitely. We are looking at the parties involved. The competition commission is a quasijudicial body that has an investigative power," PCC Chairperson Arsenio Balisacan said in an interview with reporters.

"The Supreme Court just issued the rules on inspection that will allow us to secure evidence by way of dawn raids and search warrants,” he added.

An earlier report showed that the Philippine government should have earned more from rice imports, but local traders might be declaring the wrong price to reduce their tariff obligations.

To be specific, the Federation of Free Farmers (FFF) has earlier noticed a huge gap between the value of imported rice declared by local traders and the landed cost of rice based on the data from international monitoring groups such as the Food and Agriculture Organization (FAO).

Under the Rice Tariffication Law (RA 11203), importers are allowed to bring in any volume of rice at any time provided they pay a 35 percent tariff based on the declared

value of their imports.

Since the implementation of RA 11203 in March, the Department of Finance (DOF) reported that the Bureau of Customs (BoC) had collected 15.9 billion in tariffs from the importation of 1.43 million metric tons (MT) of rice

FFF National Manager Raul Montemayor said that using DOF's data and assuming a 152 per dollar exchange rate, it will come out that the average landed price of the rice imports before imposing tariffs was only US$227 per MT.

Data from international monitoring groups such as the FAO, however, indicate that the real landed cost of these imports should have been around US$391 per ton if these were 25 percent broken rice.

"In effect, importers appear to have undervalued their shipments by 42 percent and paid P4.24 billion less than what was due from them,” Montemayor said.

Balisacan, for his part, said that “if this misdeclaration is intended to manipulate prices then it is covered by our law”.

Magsasaka Partylist Representative Argel Joseph T. Cabatbat earlier criticized PCC for not doing its mandate as provided under RA 10667, otherwise known as the Philippine Competition Act.

This, as he called for a congressional probe on the increasing number of rice cartels and rice smuggling in the country.

“You know the law creating the PCC authorizes the PCC to open the warehouses of suspected rice cartels even without receiving complaints. But, unfortunately, we did not see any accomplishment and remarkable action from the PCC,” Cabatbat said.

RA 10667 was signed into law by former President Benigno S. Aquino on July 21, 2015.

Right now, farmers are now facing the worst impact that the rice tariffication law could have on them — prices as low as 18 per kilogram (/kg) to 112/kg, forcing them to sell their yield at a loss.

As of the first week of September, farm-gate prices of palay fell by 29.5 percent from 123.10/kg last year to 116.28/kg, according to Philippine Statistics Authority (PSA). Week on week, it dropped by 2.4 percent from a price level of 116.68/kg.