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‘Illegal use of imported palm olein robs govt of revenues’

THE Federation of Philippine Industries (FPI) has expressed grave concern over the alleged illegal use of imported palm olein.

In a letter to President Ferdinand Marcos, Jr., FPI Chairman Dr. Jesus L. Arranza said his group obtained verified information about unscrupulous palm olein traders, who allegedly are declaring their importations  “for compounding of animal feeds to avoid the payment of value-added tax (VAT),” among others.

On Tuesday, Arranza claimed that the Office of the President has directed the Department of Agriculture (DA) to probe the illegal use of imported palm olein in the country.

In a statement, Arranza said Malacañang’s directive apparently stemmed from his group’s letter to the President. The Presidential Management Staff, Arranza added, wrote to Agriculture Undersecretary Domingo F. Panganiban, instructing him to “evaluate” and “take appropriate actions” on the issues raised by FPI with the President.

“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, who also chairs the Fight Illicit Trade group.

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

He noted that while Department of Energy (DOE) 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.

The modus operandi, Arranza explained, involves the misdeclaration of the usage of imported palm olein as an animal feed material to evade paying value-added tax and other taxes and duties. Instead, Arranza pointed out that the misdeclared palm olein are being used as substitute for coconut oil.

Since coconut oil is always priced much higher than palm olein, Arranza said these importers are allegedly “receiving another windfall of cash from substituting coconut oil with paLm olein.  This is naturally hurting the coconut farmers and industry.”

According to Arranza, he has raised the issue before the Bureau of Animal Industry (BAI), which regulates the entry of palm olein for feed use, but did not get a satisfactory answer.

The agency was not able to explain properly why the country’s imports of palm olein, as certified by BAI, rose last year despite hog farms still reeling from the consequences of African swine fever.

He wondered “why BAI has no listing of the feed producers (feed millers), which is very necessary for determining whether the total imported palm olein was really used in the manufacturing of feeds.”

Likewise, he said, no verification was done on the volume of palm olein being used per kilo of feeds. “This will determine if the increasing palm olein imports that were given certifications by BAI were really used purely in the compounding of animal feeds,” he added.

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

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