Press Releases

Statement on the President’s disapproval of the proposal to import 300,000 MT of sugarRep. Joey Sarte Salceda

August 11th, 2022

The President’s decision highlights just how sensitive this issue is. The sugar sector needs 1.3 workers per hectare cultivated, versus just 0.7 workers for the agriculture sector in general, and 0.6 workers for rice. That means sugar is among the most labor-intensive sectors in agriculture, losses among sugar farms will be more displacing among sugar workers than rice tariffication was for rice farmers. The President, now the caretaker of farmers as DA Secretary, knows this well and doubtless considered this effect on domestic farmers.

150,000 MT of the proposed 300,000 MT was supposed to be for bottler’s grade sugar, or sugar that sweetened beverage makers use. Of course, absent such imports, the beverage makers will likely resort to other sweeteners, such as High Fructose Corn Syrup. HFCS-sweetened beverages are taxed at higher excise tax rates (P12/liter) than sugar-sweetened beverages (P6/liter) and these taxes can benefit the domestic sugar sector, if we can collect and use them.

As such, I will be forming a working group with the Department of Finance, the Bureau of Customs, the Bureau of Internal Revenue, and the Food and Drug Administration to track HFCS imports from beverage makers, and ensure that the import volumes make sense with their tax payments on sweetened beverages. I expect higher revenues from sweetened beverages as a result of this temporary shift, and those revenues can be used to enhance the domestic sugar industry.

I will also be calling the Sugar Regulatory Administration and the Department of Budget and Management to understand why very little sugar development programs were implemented despite the mandate of the TRAIN Law to earmark part of the revenues from sweetened beverages towards the development of the local sugar sector.

Moving forward, several steps can be taken to address domestic sugar supply issues.

PBBM can pursue programs to ensure that the domestic harvest (which should begin around this month) will be efficiently milled and processed to avoid wastage. We should also look at the implementation of the Sugar Industry Development Act, particularly the P2 billion annual mandated appropriations for the programs under that law.

On the demand side, the National Biofuels Board can also exempt sugarcane from being among the sources of biofuels required to be added to domestic petroleum under the Biofuels Law. VP/Sec. Sara can also hopefully issue a ban on softdrinks from being sold within public schools, as they are both unhealthy and, given current circumstances, uneconomical.

Because the sugar import order would have coincided with the harvest season, I instead propose that major sugar imports be timed during leaner months, while imports during harvest season be in more carefully considered tranches. Before a sugar import order is considered, its effects on sugar farmers should be considered, and mitigating measures should already be proposed. Even the Rice Tariffication Law had such mechanisms.

I hope that the DA senior staff can propose a better-formulated schedule of imports and a package of mitigating measures to the President as soon as possible.

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