MANILA – The local coconut industry’s leadership said a proposal to substitute coconut oil with palmolein oil as an additive to biodiesel is no longer cost-effective as world market prices of the latter commodity have since surged substantially.
In an interview on Tuesday, Jesus Arranza, president of the Coconut Oil Refiners Association (CORA), said that while his group was earlier open to the substitution of locally-produced coco oil with imported palmolein in the diesel blend, the concept will no longer deliver a win-win solution today.
He recalled that the proposal arose years ago when coconut oil prices were at their peak in the world market, and using palmolein, which is potentially a viable coconut oil alternative, could help oil companies meet the requirements of Republic Act 9367, otherwise known as the "Biofuels Act of 2006" while moderating local pump prices.
A two percent mixture of coconut oil is added to locally sold diesel to reduce harmful emissions by motor vehicles.
CORA’s president added that the supposedly unabated smuggling and technical smuggling of palmolein into the Philippines may have created an abnormal demand for it, causing prices to shoot upward.
“Some local companies are importing palmolein in the guise of being blended into animal feeds, for which they are granted tax perks. But in reality, they are selling it as cooking oil and for mixing in biodiesel, as well as for other purposes that are not tax-exempt,” said Arranza, who is also chairman of the Federation of Philippine Industries (FPI).
The business leader cited a 2021 investigation led by Albay Rep. Joey Salceda into agricultural smuggling, wherein it was estimated that the government lost some PHP45 billion in potential tax revenue over six years due to the smuggling of palm oil.
“We already worked on the whole gamut of what you can consider agricultural smuggling, from illegal entry, to faulty biosafety inspections, to technical smuggling and misdeclaration. I prefer the House committee’s approach because it is constructive. And I think PBBM (President Ferdinand R. Marcos, Jr.) also prefers that approach since it actually yields structural solutions rather than merely naming and shaming a few persons,” Salceda said during an earlier House hearing.
Meanwhile, Arranza said there is an ongoing smear campaign against the leadership of CORA and FPI – two large business organizations that are deeply involved with private sector efforts to curb the smuggling of various goods.
He pointed out that legitimate industry players needed to take a more proactive role because the seemingly unabated smuggling has proven ruinous not only to the coconut sector, but to other local businesses as well.
“Our reputations are being besmirched. It all started several months ago when we started to cooperate with government agencies (in probing palm oil smuggling),” said Arranza without elaborating who and how the alleged smear campaign is being perpetrated.
CORA and FPI have been cooperating with parallel investigations currently being conducted by the National Bureau of Investigation (NBI) and the Bureau of Internal Revenue (BIR) on the alleged involvement of several local firms in palm oil (palmolein) smuggling, he added.
In March, CORA, FPI and the advocacy group Fight Illicit Trade (FightIT) signed a memorandum of agreement with the Philippine Coconut Authority (PCA) to collaboratively examine and develop ways to combat smuggling, monitor injurious import transactions, and prevent the proliferation of substandard products in the domestic market. (PNA)