The Federation of Free Farmers (FFF) urged President Duterte to order the Department of Agriculture to conduct an antidumping investigation into rice imports to curb undervaluation by unscrupulous traders.
FFF National Manager Raul Q. Montemayor said imposing antidumping duties is the “best and fastest way” to discourage traders from shortchanging the government by misdeclaring the value of their rice shipments.
“The idea is to put pressure on importers to declare the right prices and pay the correct tariffs,” Montemayor told the BusinessMirror in an interview. “The President should issue the order [for an investigation] to fast-track the process.”
Using figures released by the Bureau of Customs (BOC), the average landed cost of rice imports which arrived in the country after the rice trade liberalization law took effect was only $227 per metric ton (MT).
This is nowhere near the internationally published prices of rice, which range from $391 per MT to $422 per MT.
Montemayor said the low valuation of rice shipments could have caused the government lose P5 billion in revenues. What’s worse, he said, is that cheap imports contributed to the decline in the drastic decline in the price of unhusked rice.
Under Republic Act 8752, or the Anti-Dumping Act of 1999, the government could impose antidumping duties on imported commodities that are sold at a lower price than its original value in its country of origin.
The antidumping duty is equivalent to the difference between the export price and the normal value in the exporting country, Montemayor said. The antidumping duty applies on top of the regular implement tariffs on imports.
“In June for example, the monitored export price
for rice with 5-percent brokens from Vietnam was $359 per MT. If a shipment
arrives in the Philippines with a landed cost of $227 per MT, it is equivalent
to an ex-Vietnam export price of only $159 per metric ton after removing costs
for freight and insurance,” he said in a separate statement
on Thursday.
“This is $200 cheaper than the monitored export price, and this difference can be the basis of the antidumping duty that will be charged against the importer in addition to regular tariffs,” Montemayor added.
Under RA 8752, the agriculture secretary could initiate an antidumping investigation based on a preliminary determination of dumping based on three factors: the price difference between the export price and the normal value of the commodity; presence and extent of threat to cause injury to a local sector; and causal relationship of the alleged dumped product and the threat to domestic sector.
Once initiated, importers would be required to post a cash bond equivalent to the estimated antidumping duty while a thorough evaluation of the complaint is being undertaken by the Tariff Commission.
Antidumping measures on imports could be applied for as long as five years from the date of initial implementation, Montemayor said.
Pursuing an antidumping measure on rice imports is more effective than imposing a safeguard duty since most shipments come from Asean member-states wherein the Philippines applies a low bound rate, he added.
Montemayor also said the safeguard duty would only be imposed when the cumulative imports exceed a trigger volume and would only be in effect until the end of the calendar year.
“The BOC has argued that they cannot question the declared value of imported rice if valid documents are submitted by the importer, even if there appears to be a clear case of undervaluation. With antidumping, an importer will be subject to higher antidumping duties the larger the undervaluation, no matter what documents are submitted,” he said.
“RA 8752 also provides that the license of an importer who is caught dumping can be canceled, and its officers can be barred from holding positions in any business enterprise in the country,” he added.
Image credits: Nonie Reyes