Govt must plug billion-peso leak in technical rice smuggling: Pangilinan

ASIDE from causing a severe drop in local palay prices, government's inability to monitor the quality of imported rice also cost an estimated billion pesos in uncollected tariff and therefore lost revenue, Senator Francis "Kiko" Pangilinan said Friday.

"Aabot sa bilyong piso ang nawawala sa gobyerno dahil hindi nito alam ang classification ng mga pumapasok na bigas. Dapat na-mo-monitor at na-i-inspect ng gobyerno ang klase ng pumapasok na bigas," Pangilinan said.

At Thursday's hearing on improving rice importation procedures, the Bureau of Plant Industry (BPI) told the Senate that it doesn't have enough personnel who can technically classify imported rice by quality, which in turn is a basis for the tariff rate to be imposed.

"Lugi na nga ang gobyerno dahil mababa ang koleksyon ng taripa, lugi pa ang ating mga magpapalay dahil mababa ang presyo ng kanilang ani," Pangilinan said.

Rice farmers have been decrying the devastating effects of the Rice Tariffication Law, which for the second year has caused farmgate palay prices to drop to levels that have made rice farming unprofitable and unattractive. Reports indicate that farmgate palay prices have dropped to as low as P12 per kilo in some provinces.

Other food producers -- local farmers of corn and other crops, as well as poultry and hog raisers, and even fishermen -- have also protested against massive imports of their products, driving many of them to bankruptcy and worse poverty.

This flood of food imports has prompted the senators to ask the Department of Agriculture (DA) to limit the entry of foreign food products especially during harvest season.

When Pangilinan was Presidential Assistant on Food Security and Agricultural Modernization, he was able to save P6 billion in public funds due to a transparent, accountable, and competitive rice importation process.

How technical rice smuggling happens

At the hearing, the DA said the current prices of imported rice are: 25-percent broken (lower quality) at 438 dollars per metric ton, while 5-percent broken (higher quality) at 490 dollars per metric ton. Rice quality is measured by brokenness. The more broken the rice, the lower the quality.

For the year 2020, the Philippines will reportedly import 1.8 million metric tons of rice.

"That's a difference of 50 dollars per metric ton depending on the quality of rice, between 25-percent broken and 5-percent broken. If we imported 1.8 million metric tons, malaking lugi na sa gobyerno," Pangilinan explained.

"Ang ginagawa ng technical rice smugglers, ipapasok nila yung mas magandang klase pero i-de-declare nila na mababang klase. Ang mawawala ay yung taripa para dun sa 50 dollars na difference na dapat mayroong taripa na 35 percent," he added.

Assuming that the entire 1.8 million metric tons of imported rice was 5-percent broken and all were declared as 25-percent broke, and world market rice prices are fixed throughout the year, the government is estimated to lose a total of 31.5 million dollars or 1.575 billion pesos in revenue.

"In other words, that's under-declaration. The government loses 35 percent of the 50 dollars per metric ton difference. Ganun kalaki yung hindi nakokolekta. That's why the Bureau of Customs and the Department of Finance will have to figure out how to inspect our imported rice," the senator explained.

To help resolve the issue of technical rice smuggling, Pangilinan also asked the Bureau of Plant Industry to submit its list of personnel involved in inspecting imported rice, together with their assignments.