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Thai firm’s tax perks not OK with Palace–DA

/ 10:03 PM January 29, 2013

ROSALES, Pangasinan—President Benigno Aquino has raised questions on the grant of pioneering status that allowed a Thai food company to receive a six-year tax holiday and nearly duty-free importation of equipment and materials, according to Agriculture Secretary Proceso Alcala.

Alcala, in a statement, said the President shared his concern over the Board of Investment (BOI) decision that granted Thai food firm Charoen Pokphand (CP) Foods pioneering status and tax incentives.

“The President himself raised the question of how does one define pioneering status. How can the BOI grant the Thai company pioneering status when we have been raising hogs and chickens for so long?” Alcala was quoted as saying in a statement.


Alcala, who was not consulted by the BOI, noted that the board granted pioneering status to CP only on the basis of its minimum capitalization of $200 million.

Rosendo So, Swine Development Council and Abono party-list chair, said the BOI should also have considered the P300-billion domestic meat industry in its decision.

“The domestic industry is a P300-billion industry. If you compare that to CP’s P2-billion investment, that is small,” said So in the same statement.

“For so many years, the livestock industry has not enjoyed substantial benefits from the government, and now the BOI is killing us for such a paltry sum that would benefit a foreign company,” So said.

Just as prices of locally produced meat had stabilized, backyard hog and poultry raisers raised fears that the entry of CP would displace them from the local market.

Danny Sim, a backyard hog raiser and poultry contract grower in Umingan town, said they feared the situation when CP brings its produce to wet markets.

“The prices are better now. [But if this happens], then we’re a goner,” he said.

Sim used to operate a piggery with 400 animals but was forced to downgrade his inventory to 100 animals after prices went spiraling down in the past years because of rampant meat smuggling.


So said the more important issue is the country’s food security.

Alcala admitted that with the tax holidays extended to CP, the local industry will be put at a disadvantage.

“I myself do not agree with the decision of the BOI … I am afraid it could eventually kill our domestic livestock industry,” said Alcala.

“There is nothing wrong in allowing the entry of foreign companies. But if we give perks to foreign firms, we have to give tax breaks as well to our local industry,” he said.

So said the 1,800 jobs to be generated by CP’s projects will not compensate for the 7 million Filipinos who stand to be displaced if domestic hog and poultry growers close shop.

“We are really at a loss why the BOI approved the pioneering status for CP last year when its application was denied in 2010,” So said.

Sim said local food firms like Magnolia, Monterey, Bounty Fresh and Best Options may also be affected if CP puts up canning or other processing plants for its products, which would mean they would collide head on with local producers. Yolanda Sotelo, Inquirer Northern Luzon

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TAGS: Charoen Pokphand (CP) Foods, Food, Tax Incentive, Thailand
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