PCA, industry groups to probe smuggling of palm oil

MANILA, Philippines — The Philippine Coconut Authority (PCA) has teamed up with industry groups to jointly probe the rampant smuggling of palm oil.

The PCA signed a memorandum of agreement (MOA) with the Federation of Philippine Industries Inc. (FPI), Coconut Oil Refiners Association (CORA), and Fight Illicit Trade (FightIT).

The MOA 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.

It 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.”

In a statement, FPI said the smuggling of palm oil is robbing the government of billions of pesos in revenues while hurting the growth of the local coconut industry.

FPI chairman and CORA president Jesus Arranza said among their first initiatives is to conduct a thorough investigation into the technical smuggling of palm oil which, Albay Rep. Joey Salceda, said led to a government revenue loss of P45 billion over six years.

“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. 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 said.

Salceda reported that this was done by misdeclaring palm olein that unscrupulous traders were bringing into the country purportedly for compounding of animal feeds.

However, these palm olein imports were refined and converted into cooking oil for human consumption, the lawmaker claimed.

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 who are 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.

The MOA signatories are also tasked 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.