THE economic team has expressed concern that the country’s sugar situation could spill over to the informal economy and hurt the poor even more, according to the National Economic and Development Authority (Neda).
In the 2022 Economic Journalists Association of the Philippines-San Miguel Corporation Economic Forum on Wednesday, Socioeconomic Planning Secretary Arsenio M. Balisacan said the sugar situation is a matter that needs the economic team’s attention as it will impact local producers and food manufacturers.
The situation, Balisacan said, could also affect lowly vendors selling Filipino street food favorites such as banana cue and kamote cue, and who rely on affordable sugar prices to continue operating their microenterprise.
Employment impacted
“SO there is a lot of employment that will be affected by soaring prices. So it should be a concern for us as a watcher of the economy and manager of the economy, you need to have a kind of balancing act,” Balisacan said.
“While we protect our farmers from headwinds, we also have to ensure that the tools that we employ to protect our farmers do not harm the rest of the economy, especially that we are trying to get poverty reduced, the economy moving at a high growth trajectory,” he added.
Balisacan said local prices of both raw and refined sugar have been rising at over 5 percent a month since the beginning of the year. This rate of increase is “quite fast.”
“That would have an impact not just on our local producers but also for our food manufacturers, our SMEs, banana cue, kamote cue and they are all users. So there is a lot of employment that will be affected by soaring prices,” Balisacan said.
What is needed right now, Balisacan said, is for the government to sit down with industry players and planters to ensure sufficient supply and prevent any further spikes in prices.
Efforts to also “put producers to task” is also needed considering that the rise in prices were mostly supply-driven. Balisacan said the country’s sugar supply must grow in order to stabilize prices.
This could also mean allowing importation since, the Neda chief said, the demand for sugar is expected to increase along with the growth of the economy.
However, Balisacan said it was still difficult to say whether he agreed with the importation order that programmed the purchase of 150,000 metric tons of the sweetener.
He said he needs to get more updated information to be able to say whether the level of importation is sufficient. This information, he said, must include the level of inventory there is.
“That’s the ongoing discussion now: how do we assist the industry? What do we need to do now? What measures? That’s an ongoing exercise now so in the next—we’ll hear something about that,” Balisacan said.
FEF weighs in
ON Tuesday, the Foundation for Economic Freedom (FEF) raised concerns that the rising prices of sugar is a serious economic concern that affects consumers and food processors, including small food vendors.
The economists said these vendors depend much on sugar to process the products they sell to the market, all for a meager income.
“High sugar prices are frittering away the already meager incomes of the millions of our food vendors selling banana and camote cues, turon, and various types of native delicacies,” FEF said.
The FEF also said jobs could also be lost as a number of bottling and fruit juice companies have cut down on the number of workers to reduce their production costs and make up for the rising prices of sugar.
“A number of these food processing companies had already decided to relocate their operations to neighboring countries because of the high cost of raw materials in the Philippines, particularly sugar which is a basic ingredient in food processing,” FEF said.
FEF said it is high time to finally implement policy reforms toward boosting the competitiveness of our sugar industry.
A number of constructive suggestions have already been made in a Neda study.
The Neda-commissioned study recommended a phased shift to a cane purchase system that begins on a voluntary basis and the phased segmentation of the sugar market, which classifies sugar for export and for domestic use.
The study also recommended efforts to strengthen the sugar industry’s institutional support mechanisms, including maximizing the engagement of block farms and other small farmers in planning and program identification and implementation.
Image credits: EJAP