Sugar sector worries over shortcuts to liberalization

March 9, 2019
Louise Maureen Simeon (The Philippine Star) |

BACOLOD CITY  , Philippines  —  Sugar industry stakeholders expressed concern over shortcuts to liberalizing the sector.

An industry source privy to the matter said the liberalization of the sugar industry could be done just with the issuance of an administrative order.

“If they really want to do it, that’s the way they can and that’s what we fear,” the source told The STAR.

“I think if they see that they will have difficulty in doing it, the AO will be their last recourse,” the source added.

The country’s economic team has already made a collegial stand to allow the liberalization of sugar imports, but several lawmakers have opposed it.

Sugar Regulatory Administration (SRA) board member for the planters side Emilio Yulo said taking the shorter route towards liberalization by issuing an AO is really possible.

“That is a distinct possibility. We could not say where it is coming from, but the economic team has already manifested its plans to liberalize the industry,” Yulo told The STAR.

“They already did that with AO 13 where they removed restrictions and streamlined import processes. They can definitely do that with the sugar industry, but we can only hope it will not happen,” he said.

Last September 2018, President Duterte issued AO 13 which removed non-tariff barriers to importation of rice and other agriculture products and streamlined administrative procedures for accrediting importers as prices of goods soared.

“We hope this will go through the legislative process for us to have the opportunity to be heard. We are still optimistic  there will be a consultative process,” Yulo said.

“Because if that happens, it is going to be too catastrophic for the industry to say the least,” he added.

Negros Occidental vice governor Bong Lacson admitted that the province, which accounts for bulk of the sugar production, is already threatened with plans to deregulate the industry.

“Sugar is the heart and soul of the Negros economy. We cannot compete with the low prices of sugar bought in the world market. Many farmers will be affected and peace and order might be a concern,” Lacson said.

“I think the economic team is prioritizing the revenues they can generate from taxes from importation (than from the local industry),” he said.

The Confederation of Sugar Producers Association (CONFED) likewise emphasized that other countries tried to develop their local industry first through enough government subsidies.

Stakeholders said the planned liberalization of the industry would not benefit the local consumers as the prices of end-products of processors would not exactly be lowered and would only be advantageous to industrial users.

The sugar industry contributes an estimated P96 billion to the national economy from the sale of raw sugar, refined, molasses, and ethanol and P5 billion in value-added tax payments on refined sugar.

It employs 720,000 workers in 28 sugar-producing provinces and in which 82,000 farmers, mostly agrarian reform beneficiaries and small farmers, are dependent on it for their  livelihood.