Salceda: DA, BOC need more teeth vs smuggling

THE chairman of the House Committee on Ways and Means on Sunday asked the Bureau of Customs (BOC) to allow the Department of Agriculture (DA), and the Bureau of Animal Industry (BAI) to inspect meat imports into the Philippines to help prevent the further spread of African Swine Fever.

House Ways and Means Chairman Joey Sarte Salceda said the request is urgent, as meat inflation is becoming alarming.

“From a strategic point of view, we need to protect the domestic supply from further decline due to ASF, so sanitizing imports is very important,” he said.

“All the agencies involved are under the Economic Development Cluster of the Duterte Cabinet, chaired by Finance Secretary Sonny Dominguez. I will send him a formal request for cluster-wide action on the matter. Invoking my oversight powers over the BOC, I am strongly requesting the agency to streamline all processes where the DA needs to be able to inspect, so that we can prevent any further spread of ASF from meat imports,” Salceda said.

The Philippine Statistics Authority (PSA) reported Friday that the elevated February 2021 inflation was due to the increase in meat prices, which had an inflation rate of 20.7 percent in February 2021 from 17.1 percent in January 2021. February 2021 inflation was 4.7 percent, the highest in 26 months, during the height of the rice price crisis.

“It’s so obvious that we have significant food supply vulnerabilities. The solutions will no longer be monetary or regulatory. A price ceiling won’t work. Interest rate adjustments won’t work. Because the problem is really that there isn’t enough food for our growing population,” Salceda added.

“We will have no choice. While we must modernize Philippine agriculture, in the short run, we will be forced to import some food. The DA has to have the authority to inspect raw imported food to ensure that it does not carry diseases that could further weaken domestic industry,” Salceda warned.

Executive session

On Monday, Salceda said the Committee on Ways and Means will consolidate its observations on food smuggling in an executive session.

He added the committee is expected to recommend stricter enforcement in economic zones and freeports, as well as biosecurity measures to prevent the spread of diseases from imports.

“We are now seeing the problem with merely relying on imports for one’s food security policy. It can carry biohazards that affect domestic industry. So, while imports are cheaper per se, there are implicit costs, such as biosecurity and enforcement that we used to not take into account. We must have a more holistic view of importation versus domestic food production. Imports are not always the answer,” Salceda added.

“I am not against food importation. But I am against laxity that harms domestic industry. Agricultural smuggling harms our industries and our revenues. And lax enforcement of biosecurity in importation threatens our own domestic agriculture sector. We in the Ways and Means Committee will work with the Executive to address these risks,” he said.

Meanwhile, Salceda said his committee will also continue to conduct hearings on the use of ecozones as conduits for the smuggling of agricultural products, fuel, and cigarettes, warning that the Philippine Economic Zone Authority (PEZA) and other investment promotion agencies with freeport privileges have to take smuggling enforcement seriously.

Salceda made the observation that ecozones are becoming conduits for big-time smuggling. Salceda says this is on top of the use of ecozone tax privileges to commit transfer pricing.

“For tax incentives in 2017, the latest complete figure, we gave P504 billion in national government tax incentives. If you price in the special privileges, if you price in the smuggling that these freeport zones enable, easily, the annual cost to the taxpayer of ecozones is P695 billion for that year alone. With higher excise taxes on fuel, cigarettes, and sugar-sweetened beverages, as well as very attractive prices for food smuggling, the present figure is probably very close to P1 trillion every year,” Salceda said.

“Ecozones are the country’s trillion-peso blackhole. It’s where a third of government revenues go to disappear. The bleeding has to stop,” Salceda said.

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