May 5th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) wants to end the policy of differentiating palm oil fit for inputs to animal feeds, and palm oil fit for human consumption to avoid technical smuggling, which the Albay solon says could involve as much as P300 billion in trade value.
The tariff for palm oil fit for animal feed is zero, while palm oil for human consumption is levied a 15% tariff. This difference, according to the Department of Agriculture, is being exploited by smugglers, who declare the goods as unfit for human consumption.
“Why discriminate anyway. Let’s just equalize the tariffs, regardless of grade, since low-grade palm oil will probably be much cheaper anyway. That way, we don’t have room for technical smuggling,” Salceda said.
“That could also encourage those in the livestock sector to opt for coconut oil instead, which would be a boon for local coconut farmers,” Salceda said.
Salceda adds that making the coconut sector competitive “is both a national priority and, frankly, one of the easier big goals for Philippine agriculture.”
“There are 3.5 million coconut farmers in the country. We also have a new source of funding for coconut industry development, through the Coco Levy Trust Fund Act. So, it makes sense to encourage people to shift to coconut oil, while closing the palm oil smuggling route,” Salceda explains.
Salceda, who represents Albay, a coconut-producing province, says that closing the technical smuggling loophole could also “be a lifeline for local coconut farmers.”
“The coconut sector is struggling due to low farmgate prices, the consistent need for resilient varieties, and climate change and infestation. So, creating demand for coconut products such as coconut oil would encourage more capital and investment into the coconut sector,” Salceda adds.
“By closing the smuggling loophole, we also create more revenues which the government can invest in agriculture. Only the smugglers lose here,” Salceda concluded.