The list of agricultural commodities that the Philippines is importing in huge quantities has expanded, based on pronouncements made by officials in recent years. Sugar, which used to be exported by the Philippines mostly to the United States, where it enjoys preferential tariffs, has joined the list of commodities that the Philippines purchases in bulk from abroad. The latest purchase order was made just months ago, based on Sugar Order (SO) 6 that authorized traders to bring in as much as 440,000 metric tons (MT) of refined sugar. (See, “Sugar import allocation requires DA chief nod,” in the BusinessMirror, February 16, 2023)
The country has not allocated any volume of sugar for export to the US via the tariff rate quota scheme, based on sugar orders for crop years 2021-2022 and 2022-2023. Prior to the start of the crop year for sugar, the Sugar Regulatory Administration (SRA) issues SO 1, which details the allocation of sugar produced by local farmers. The last time the government allotted sugar for export to the US was in crop year 2020-2021, when 7 percent of the country’s output was classified as “A.”
Apart from the fact that the country would have to stop supplying the US market and prioritize domestic needs, output has not been enough to meet the Philippines’s requirement for the sweetener. Aside from the 440,000 MT that the administration has allowed to import, it has also approved the purchase of up to 150,000 MT of imports. A report from state-run Philippine News Agency said the additional imports would prop up local stocks and stabilize domestic prices.
The sugar sector has been asking for help from the government prior to the pandemic. Even before Covid-19 struck and Russia invaded Ukraine, stakeholders in the sugar industry have been urging the government to implement tweaks in policies and increase its assistance to farmers who have struggled to produce enough of the sweetener in the face of rising production costs. The disruption in supply chain caused by the pandemic as well as the conflict in Eastern Europe worsened the many ills that the sector had to deal with.
Despite grappling with a number of challenges including low productivity, the sugar sector was able to meet the requirements of the domestic market based on data from the SRA. Imports had been minimal if not zero as the sector was able to supply both the needs of industries and individual consumers. Because of this, prices were relatively stable and a kilo of sugar did not have to cost nearly a fourth of a worker’s daily minimum wage.
Sugar may not be a staple food like rice, but it is used in making a number of food items that Filipinos purchase and consume on a fairly regular basis including bread, biscuits, and beverages like soft drinks and juices. It would do well for concerned agencies to implement policies that would allow the Philippines to stop importing the sweetener in huge quantities and boost efforts to help the country become self-sufficient in sugar again.