MANILA, Philippines — The Bureau of Customs (BOC) allegedly lost about P900 million of uncollected tariffs from January to February of this year due to “unabated” rice imports’ undervaluation, a farmers’ group claimed Tuesday.
The Federation of Free Farmers (FFF), which analyzed BOC’s own data on rice imports, rejected BOC’s claims that increased tariff collections from rice imports in 2021 were due to the agency’s improved import valuation system.
The BOC earlier reported that tariff collections had risen by 58% to P2.04 billion in January 2021 compared to the same period last year. The agency also claimed that the average valuation of rice imports grew by 11.5%.
However, FFF said that higher collections were “inevitable” because international rice prices had risen since the fourth quarter of 2020.
The volume of imports also grew from 380,140 metric tons in January-February 2020 to 495,268 tons in the same period this year.
FFF said the degree of undervaluation of rice imports “actually worsened” in 2021.
“During the first two months of 2021, declared import costs were 22% lower on the average than the BoC’s own reference rates. For the whole of 2020, the average discrepancy was only 20%,” FFF National Manager Raul Montemayor said in a statement.
“In January-February 2021, 89% of the total import volume could be considered undervalued since declared import prices fell below BoC reference prices. In 2020, only 80% of imports were technically undervalued,” he added.
This resulted in about P900 million loss from uncollected tariffs in the first two months of 2021. This is on top of the almost P5 billion lost in 2019 and 2020 due to import values’ misdeclaration, FFF said.
The farmers’ group also belied the BoC’s claims that it took steps to ensure proper rice import classification.
“There has actually been no change in the classification system since our dialogue with BoC officials in July 2019. Rice of the same grade and quality continued to be classified under either wrong or different tariff lines,” Montemayor said.
“The BoC’s weekly Memoranda on Rice Reference Prices still does not include prices for certain grades of rice from various countries that have been regularly supplying rice since 2019,” he added.
Without these reference prices, a customs examiner cannot determine properly if a shipment is undervalued or not. In turn, importers undervaluing their shipments can escape detection by ‘suggesting’ to examiners that their shipments be classified under tariff lines that have no reference prices,” Montemayor continued.
The FFF noted, for example, that several shipments of rice from China, which were apparently routed through Singapore, had an average declared FOB value of only P12.12 per kilo.
This, FFF said, was significantly lower than rice from Pakistan or Cambodia that cost over P16 per kilo, or Thai and Vietnam rice valued at P19 per kilo or more.
“Although clearly undervalued, these shipments probably evaded questioning because the BoC had no reference prices for rice coming from China,” Montemayor said.
The group urged the BOC to publish the results of its audit of 2019 and 2020 import transactions and report on its efforts to collect additional tariffs and penalties from importers who have undervalued their shipments.