THE Philippine Coconut Authority (PCA) will conduct a thorough investigation on the smuggling of palm oil and how it is hurting the growth of the local coconut industry.
The campaign has the backing of business groups through a memorandum of agreement (MOA) signed by the PCA, Federation of Philippine Industries (FPI), Coconut Oil Refiners Association (CORA) and Fight Illicit Trade (FightIT).
The agreement mandates the PCA, CORA, FPI and FightIT to examine and develop ways to combat smuggling, monitor injurious import transactions, and prevent the proliferation of substandard products in the market.
For his part, Jesus Arranza, president of CORA and FPI chairman, said among their first initiatives is a thorough investigation of the technical smuggling of palm oil, which, according to Rep. Joey Salceda of Albay, caused government a whopping revenue loss of P45 billion over six years.
This was done, said Salceda, through misdeclaration of palm olein that unscrupulous traders were bringing into the country purportedly for compounding of animal feeds worth P300 billion.
However, these palm olein imports, Salceda claimed, were refined and converted into cooking oil for human consumption.
“The report of Congressman Salceda prompted me to look deeper into this case and I managed to get hold of official documents that apparently confirm the technical smuggling of palm olein,” Arranza said.
“I already reported this to President BBM [Ferdinand Marcos Jr.], and thankfully the Office of the President promptly ordered the Department of Agriculture [DA] to act on the matter,” he added.
PCA, an agency under the DA mandated to promote the rapid integrated development and growth of the coconut and other palm oil industry, then met with private sector stakeholders which led to the signing of the MOA with FPI and CORA.
The MOA also tasks the signatories to “continuously dialogue in crafting and formulating a reportorial system that will identify and apprehend various illicit activities that are seriously affecting the coconut industry.”
They are also mandated to: jointly conduct scientific research in developing high-value products to maximize the full potential of the coconut product; conduct product selection that will best fit intercropping to make full advantage of the spaces in between the coconut trees; and conduct any and all other activities that will redound to the benefit of the local industry as well as the coconut farmers.
“With our mandate coming directly from the President, we are leaving no stone unturned in our probe and at the same time hopefully we can come up with mechanisms that will finally put an end to this technical smuggling of palm oil,” Arranza said.
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 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.