The Office of the President (OP) has referred to the Department of Agriculture a petition by the Federation of Philippine Industries for the government to conduct an investigation over alleged illegal use of imported palm olein that has been robbing the government of billions of pesos in revenues while hurting the domestic coconut industry.

In a statement, FPI Chairman Jesus L. Arranza said he wrote a letter to President Ferdinand E. Marcos Jr. on Dec. 5, 2022 discussing the association’s concern over the alleged illegal use of imported palm olein.

The Presidential Management Staff, in a correspondence to Agriculture Undersecretary Domingo F. Panganiban, told the department to evaluate the merit of the request and take appropriate actions on the issues discussed by Arranza in his letter to the President.

Arranza welcomed the response of the Office of the President to his letter as a big boost to the campaign against smuggling and other forms of illicit trade that are hurting the economy and making millions of Filipino workers and farmers suffer.

“Side by side with other industry leaders, I’ve been fighting smuggling and other illicit trade for more than half of my life, and certainly there were frustrations along the way. But this response from the Office of the President is like receiving 10 doses of booster shots and strengthens our resolve to continue with the fight,” said Arranza, also the chairman of Fight Illicit Trade (FightIT).

Arranza echoed the belief of other FPI leaders that the president, who is concurrently the agriculture secretary, is really bent on ending economic crimes in the country.

In his letter to President Marcos, Arranza said they received reliable reports and obtained some documents that may lead to a thorough investigation and catch unscrupulous importers who are actually using palm olein for other purposes but are declaring their importations as for compounding of animal feeds to avoid the payment of value-added tax (VAT) and other taxes and duties.

“The reality is that a big portion of the imported palm olein is being diverted for sale to either - 1) producers of biodiesel an additive to diesel fuel, and 2) to the retail market (public markets, groceries, supermarkets, and sari-sari stores) as cooking oil for eventual sale to the consuming public,” the FPI chairman said.

He noted that while pertinent Department of Energy regulations specifically provide that only coconut oil can be blended with diesel to produce “biodiesel”. “These importers are actually delivering palm olein instead to substitute for coconut oil,” Arranza said.

Since coconut oil is always priced much higher than palm olein, Arranza said these importers are getting another windfall of cash from substituting coconut oil with palm olein.

“This is naturally hurting the coconut farmers and industry,” he said.

Arranza said he would like the Bureau of Animal Industry (BAI) to address some of his concerns on the importation of palm olein.

He said that total certifications issued by BAI (re the duty and VAT-free importations of palm oil) have been increasing despite the fact that the African Swine Fever (ASF) had become an epidemic.

FPI would also like BAI to come up with a list of feed producers (feed millers) to determine whether or not the total imported palm olein was really used in the manufacturing of feeds.

Arranza also sent letters to the Senate and House of Representatives seeking an investigation into the issue.

Arranza assured that he and other resource persons from both the FPI and Coconut Oil Refiners Association are "most willing and able to discuss and prove these points" during a meeting that hopefully will be called by the Department of Agriculture and during congressional hearings to investigate the illegal use of imported palm olein.