Press Releases

Salceda: High sugar prices kills jobs; House tax chair says “inflation mostly beyond our control” but “sugar prices are within our power”

November 4th, 2022

In response to the October 2022 inflation report, which shows the country’s general price levels to be the highest since November 2008, House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that while most price increases are “beyond our control due to global conditions,” the prices of sugar “are almost completely within our power to lower,” adding that high prices of sugar “kill domestic jobs more than they help farmers.”

“High corn, fuel, and electricity prices are primarily a matter of global conditions. But for sugar, because of our longstanding policy of misguided protectionism, we have it coming,” Salceda said.

Salceda also warned that “the problem with high sugar prices isn’t just that consumers are bearing the brunt of it. It’s that Philippine industries consumer more sugar than consumers do. And they’re in trouble if we don’t sort the situation out.”

“Some 66% of all sugar demand is as input to other Philippine industries. Only 34% is consumed in final form. So, very expensive sugar prices kill Filipino jobs,” Salceda said.

Salceda says that the country’s “structural sugar issues” is already costing jobs.

“The top 3-in-1 coffee brand in the country, Kopiko, is imported, because our domestic manufacturers can’t compete. Homegrown brand C2 is already being manufactured in Vietnam because Philippine sugar is expensive.”

“The next thing you’re going to kill is domestic fruit canning and manufacturing, which is a major jobs provider in Mindanao. You’re going to kill softdrinks makers, where as much as 18% of costs are sugar. Alcohol makers, some of the only true global Filipino brands, use a lot of sugar – as much as 9% of costs, based on IO tables.”

“And high sugar prices, because they are inputs to other sectors, are definitely affecting the prices of bread, softdrinks, alcoholic drinks, dairy, and other processed foods.”

Salceda cited that according to the 2018 240-sector input-output tables by the Philippine Statistics Authority, some 102.5 billion in sugar is consumed by other sectors as an intermediate input, while only 51.9 billion is used as a final good.

Salceda also emphasized that “out of all the goods in the October inflation report, sugar represents the highest year-on-year increase at 34%. That is a form of self-harm or self-sabotage when global prices have already stabilized at more or less their 50-year average of 17-18 cents per pound.”

Salceda also cited that according to the Intercontinental Exchange (ICE), the global price of sugar is now at just around P24 per kilo, while retail prices in the domestic market fetch as high as P120 per kilo.

Provide relief to PH industries, allow industrial imports

Salceda says that allowing industrial users to import sugar is “the most immediate way to address some parts of food inflation.”

“I’ve talked to farmer groups and they complain that their problem is input costs. High fertilizer and farm fuel costs are major issues. Among milling companies, energy costs are also the issue. I already have a proposal to allow industrial users to import another 400,000 MT of refined sugar. If we auction those slots off, we could be earning as much as 12 billion pesos, which we could provide to farmers and millers as direct subsidies.”

“I have also alerted the government to the fiscal risks of expensive sugar. We were supposed to collect some P2.8 billion in sweetened beverage taxes every month. That’s not going to happen if bottlers keep closing down plants due to lack of available sugar inputs.”

“So, I urge the DTI and NEDA to apprise the government: Is there a sugar shortage among our industrial users, yes or no? And how much is the shortfall? So that the administration can make a decision that works for both industry and farmers based on that matter.”

“Otherwise, industrial users are going to have to find a way to get their sugar, one way or another. They will either manufacture abroad, or smuggle sugar here. Either way, we’ll see jobs killed.”

Other Press Releases
Statement on the pronouncements against the Public Service Act amendments (RA 11659)
Read More
Statement on the February 2024 jobs report
Read More
Statement on the March 2024 inflation figures
Read More
The problem of access to Senior Citizen healthcare is structural, but it should be addressed alongside other issues with Senior Citizen welfare.
Read More