Economic managers delay sugar liberalization

Economic managers have agreed to shelve plans to ease restrictions on sugar imports for now, as they will focus instead on slashing the domestic price of the sweetener, according to Socioeconomic Planning Secretary Ernesto M. Pernia.

Pernia told the BusinessMirror in an ambush interview in Manila that the Economic Development Cluster (EDC) discussed the liberalization of the sugar industry on October 23.

“We will not liberalize the sugar industry yet [as] we will give time to doing something about the very high prices of sugar here,” he said shortly after the EDC meeting.

Asked until when the economic team will stick to this stance, Pernia said: “We will observe it [sugar industry] for six months to one year.”

Pernia issued his statement almost a month after the Department of Finance formally proposed the liberalization of the sugar trade industry. The DOF had wanted to replace quantitative restrictions (QR) with tariffs and safeguard measures (for subsidized products) “to allow for more transparent, competitive pricing, and allow downstream industries to become more viable and grow as fast” as their counterparts in the Association of Southeast Asian Nations.

The DOF argued that the QR on sugar imports raised the wholesale price of refined sugar to 235.8 percent above the export price of Thailand and 393.2 percent above the reported prices of Food and Agriculture Organization.

The DOF also noted that consumers and downstream industries are paying more than twice the international price for sugar. However, the Confederation of Sugar Producers (Confed) warned that easing restrictions on sugar imports will displace millions of farmers and undermine government’s efforts to improve the sector’s productivity.

Confed Spokesman Raymond Montinola said neighboring Southeast Asian countries have measures in place to protect their local farmers. He also said sugar farmers in other countries, like Thailand, are “highly subsidized,” enabling them to export their surplus at a much cheaper price.

Last June, the BusinessMirror reported that the Department of Trade and Industry (DTI) is determined to pull down sugar prices, as requested by food manufacturers, but not through deregulation.

Instead of liberalizing the sugar industry, the DTI said it instead wants to deal with producers and traders in keeping prices competitive and ensuring sufficient supply of the commodity.

Planters’ plea

Instead of pushing for sugar deregulation, the Negros Occidental Federation of Farmers Association, Ormoc Sugarcane Planters Association, Save the Sugar Industry Movement, and the Luzon Federation Sugar Producers said government must focus on farming modernization, mechanization and the grant of subsidy.

“We appeal to the government to also accord us attention because officials do not know what is happening on the ground. They are not the ones who plant sugarcane,” the groups said.

Ormoc Sugarcane Planters Association Chief Inaki Larrazabal Jr. said the sugarcane industry currently pays for its own research and development efforts through the Philippine Sugar Research Institute.

“The sugar industry fully supports the government. [Stakeholders] religiously pay their taxes for their produce, even for the sugar which they consume. We cannot get our sugar from the mill, either to sell it or consume it without paying the applicable taxes,” said Larrazabal.

Lawmakers from sugar-producing provinces said they are keen on launching an inquiry into the planned liberalization of the sugar industry.

Negros Occidental 3rd District Rep. Francisco Reyes said they will immediately work on the inquiry right after congressional recess. “Hopefully, we can immediately set the inquiry as soon as we return from recess.”

Image credits: Joel Saget/AFP, via Getty Images/Bloomberg


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