‘Liberal import policy to kill PHL sugar sector’

August 17, 2023
Business Mirror | https://businessmirror.com.ph/2023/08/17/liberal-import-policy-to-kill-p...

Lawmakers from Negros Island and other sugar-producing areas on Wednesday opposed the proposal of Finance Secretary Benjamin Diokno liberalizing sugar importation, saying it will kill the domestic sugar industry.

Rep. Jose Francisco Benitez of the Third District of Negros Occidental led his colleagues in filing House Resolution No. 1199, expressing “strong opposition” to Diokno’s recent statement that food and beverage manufacturers will be allowed to directly import sugar as part of the Department of Finance’s plan to increase the tax rate of sugar-sweetened beverages.

 The authors of the resolution are Reps. Joseph Stephen S. Paduano, Greg G. Gasataya, Gerardo P. Valmayor Jr., Alfredo D. Marañon III, Juliet Marie de Leon Ferrer, Emilio Bernardino L. Yulo, Mercedes K. Alvarez, Michael B. Gorriceta, Jocelyn Sy Limkaichong, and Manuel T. Sagarbarria.

 Explaining his position, Benitez expressed the fear that liberalizing sugar importation, without adequate support for our local sugarcane farmers, would weaken the domestic sugar industry.

 “Sugar production this year is projected to fall due to El Niño and our limited milling capacity. But instead of helping our sugar producers, flooding our market with imported sugar will kill our domestic sugar industry,” Benitez said.

 “Sugar-exporting countries can sell to us their surplus sugar at prices below production cost because of massive subsidies and protectionist policies. Tayo, ano ang ginagawa natin sa industriya ng kalamay natin?”

 The Department of Finance has taxed sweetened beverages through Republic Act (RA) 10963 or the TRAIN Law. Based on data from the Bureau of Internal Revenue, total tax revenue from sweetened beverages between 2018 and 2022 was P174.5 billion. But only P3.92 billion was allocated for programs for the sugar industry for 2018 to 2023. This is in spite of the provision of RA 10659 or the Sugarcane Industry Development Act that mandates an annual allocation of at least P2 billion for programs to strengthen the sugar industry.

 “Instead of assuring us of ploughing back revenues from tax on sweetened beverages to strengthen the sugar industry, Secretary Diokno is offering liberalization of sugar importation,” said Benitez.

“He seems to be supporting liberalization to sweeten the deal with food and beverage manufacturers and counteract additional costs from higher taxes. But what about our sugarcane farmers? What is our deal with them?”

Last June, Diokno told local manufacturers who will be affected by the expanded taxes on sugar sweetened beverages (SSB) that they could gain wider access to sugar imports.

Diokno said he is willing to grant manufacturers more access to sugar supplies from abroad to cushion the impact of a higher SSB tax base.

He said he is aware that producers and sellers of sugary products subjected to the tax would object as “it will raise the selling price of their products.”

“But knowing the big difference between the world price and the domestic price of sugar [a major input in the industry] then allowing the industry to import their own sugar requirement would reduce their cost of production,” he said.

“This is the ‘sweetener’ or incentive for producers of sugary products to accept the broader, simpler tax on sugary products.”