Rice farmers said that had it not for alleged undervaluation of imports, tariff collection from rice importation should have been higher compared to the slight improvement reported by the Bureau of Customs (BoC).
In a statement, Federation of Free Farmers National Manager Raul Montemayor questioned the BOC report that rice tariff collection from January to July did not “significantly” improve from last year. According to BoC, tariff collections from imported rice had reached P10.73 billion as of July 17, 2020, a slight improvement from P9.94 billion in the same period last year.
“The agency is using seemingly improved numbers in tariff receipts to mask its failure to collect correct revenues from rice importers. It is hiding the fact that undervaluation of imports and its collection performance worsened this year,” Montemayor said.
The FFF’s analysis of publicly available data showed that the BOC’s collection efficiency fell significantly in 2020, based on FOB (Free on Board or the cost of imports at the point of origin) and CIF (Cost or FOB plus insurance and freight) prices.
In the first five months of 2020, rice importers declared that the FOB prices of their imports averaged P1,692 per ton, which was lower than the BoC’s own reference prices by P2,416 per metric ton. In 2019, the average gap in FOB prices was only P945 per metric ton, indicating that the degree of undervaluation of FOB prices increased by 155 percent in 2020.
Similarly, declared CIF prices, the basis for tariff payments, were lower than BoC reference rates by P3,292 per metric ton on the average in January to May 2020. In comparison, the gap between declared and official CIF prices in 2019 was only P1,943 per ton in 2019.
The FFF analysis showed that the declared CIF prices of imports per metric ton increased from P17,510 in 2019 to P17,723 in 2020, or by a mere P213 per ton. In comparison, the BoC’s own reference prices during the same period rose by P1,603 per ton.
The FFF claimed that this explains why the BoC’s tariff collections increased only marginally by 1.3 percent from P 6.13 per kilo of rice imports in 2019 to P6.21 in 2020.
“And yet, FOB prices of rice have gone up by at least 10 percent in 2020 due to the COVID pandemic and supply uncertainties in Vietnam and other rice exporting countries. Considering that tariffs are applied on import values, the fact that the increase in tariffs collected per kilo was way below 10 percent indicates that the degree of undervaluation by importers actually intensified in 2020,” Montemayor said.
Earlier, the FFF flagged an estimated P2.676 billion in tariffs that were not collected due to the undervaluation of FOB and CIF prices of importers from 2019 up to the first five months of 2020.
Another P200 million were not collected by the BoC due to the wrong application of the 35 percent ASEAN tariff rate on imports from non-ASEAN countries, the group further said.