BOC denies undervaluation of rice imports

The Bureau of Customs (BOC) on Monday denied the allegation that rice importations are undervalued, saying that it follows an international recognized system for valuation.

Earlier, the Federation of Free Farmers (FFF) said there was an "apparent undervaluation" of rice imports following the enactment of the Rice Tariffication Law in March. 

In statement on July 8, the farmers' group said that the Department of Finance's report on July 4 that the BOC collected P5.9 billion in tariffs from 1.43 million metric tons of imported rice in the four months since March means that, by its calculations, importers paid P4.24 billion less than what they were supposed to pay.

"If we use the DOF figures and assume a Php52 per dollar exchange rate, it will come out that the average landed price of the rice imports before imposing tariffs was US$227 per metric ton. On the other hand, data from international monitoring groups such as the Food and Agriculture Organization (FAO) indicate that the real landed cost of these imports should have been around US$391 per ton if these were 25% broken rice. In effect, importers appear to have undervalued their shipments by 42% and paid Php 4.24 billion less than what was due from them," FFF national manager Raul Montemayor said.

The FFF also said that importers can reduce their tariff obligations by "lowering the declared value of their imports in connivance with their suppliers abroad."

In its own statement on Monday, the BOC denied the FFF's allegations.

The bureau said that its Import Assessment Service (IAS) provides reference values on rice imports as a guide "when the veracity of the declared values is disputable."

"All Ports abide with the said published data except when the Commercial Invoice of a rice shipment is supported by genuine and validated Proof of Payment such as Bank Telegraphic transfer of Payment, Sales Contract and other similar legitimate instrumentalities that indicated actual sales transaction between the seller and the buyer," it said.

This system, said the BOC, follows the World Trade Organization's "internationally recognized system of valuation," of which the Philippines is a signatory and which "is likewise prescribed under Section 701 of the Customs Modernization and Tariff Act (CMTA)."

The Rice Tariffication Act removes the quantitative restrictions on rice while imposing a 35-percent tariff on imports from the country's neighbors in Southeast Asia. — Joviland Rita/BM, GMA News