‘Disastrous and untimely’: Philippines senate pushes for sugarcane development over industry deregulation

By Pearly Neo contact

- Last updated on GMT

The Philippines senate is advocating for the development of the country’s sugarcane industry instead of overall deregulation, in the wake of various setbacks that have battered the sector in recent months. ©Getty Images
The Philippines senate is advocating for the development of the country’s sugarcane industry instead of overall deregulation, in the wake of various setbacks that have battered the sector in recent months. ©Getty Images

Related tags: Philippines, Sugar, Regulation

The Philippines senate is advocating for the development of the country’s sugarcane industry instead of overall deregulation, in the wake of various setbacks that have battered the sector in recent months.

Resolution no. 213 was led by Senate Majority Leader Juan Miguel Zubiri, and signed almost unanimously by 22 senators.

“The deregulated entry of subsidised sugar into the Philippine market will be disastrous to our sugar industry, which contributes an estimated P96bn (US$1.89bn) to the GDP, particularly to 84,000 farmers,”​ stated the official resolution document.

“Liberalisation or deregulation of the sugar industry will not affect the competitiveness of sugar-containing food products for export because it is already a policy of the SRA to allow food exporters to openly import sugar without value-added tax or customs duties, provided that the end-product is exported and not sold locally.

“[The] liberalisation of the sugar industry will tragically affect a lot of farmers and workers.”

Zubiri urged that this be reconsidered as the end-result would affect millions of people across the country.

“We do not want another industry to fall and falter because of the liberalising imports of these products,”​ he said via his Facebook page.

Instead, it was urged that focus be turned to the country’s sugarcane industry as per the Sugarcane Industry Development Act (SIDA).

“Let us fully implement SIDA and support the industry before we talk about liberalising imports, and then be competitive. But right now is not the time to liberalise importations,” ​he said.

 “SIDA was enacted into law only in 2015. [It] is barely four years into effect, and much of the programmes and projects it envisions to implement for the development of the sugar industry are not yet fully realised, thus any plan of liberalising the sugar industry becomes irrelevant and very untimely,”​ said the senate.

Amongst the initiatives that SIDA aims to pursue include establishing productivity improvement programmes, providing required infrastructure support, enhancing R&D of other products derived from sugar, sugarcane, and their by-products, providing human resource development and extension services, and providing financial assistance to farmers

That said, it may be important to note that earlier this year in June, the Department of Budget and Management (DBM) slashed 2020 funding for SIDA from its original PHP2bn (US$39.4mn) annual budget down to only PHP67mn (US$1.32mn) citing ‘underutilisation of funds’.

According to government newswire Philippines News Agency (PNA), this decision was criticised by Confederation of Sugar Producers (CONFED) spokesperson Raymond Montinola who described this reason as a ‘constant excuse’​ used.

“The industry has very little to do with it,”​ said Montinola.

“We have been often told that the only way for our sugar industry to be globally competitive is to improve our productivity, for which the SIDA law was created so that we can mechanise, have technical and financial assistance and more.​ [We] have continuously urged to revisit the law, but [no change] has been made so far.”

Sugar liberalisation backstory

Discussion about liberalising the local sugar industry began at the beginning of this year, when then-Budget Secretary Benjamin Diokno revealed in a press conference that sugar was ‘next on [the] list’​ for deregulation after rice​.

In February, Socioeconomic Planning Secretary Ernesto M. Pernia announced that the Cabinet Economic Development Cluster (EDC) was also in favour of this, citing high sugar prices in the country.

This was not long after President Rodrigo Duterte abolished the Philippine Sugar Corporation (Philsucor) for failing to ‘effectively perform the objectives and purposes for which it was originally created’, ​and having its functions ‘duplicate or unnecessarily overlap’​ with the Sugar Regulatory Administration (SRA).

CONFED has previously come forth to oppose the deregulation of the sugar industry, with Montinola saying that the sector had already suffered a blow following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“We have barely recovered from the high fructose corn syrup issue and here we are again being targeted by the economic managers,” ​he told Rappler.

One of TRAIN’s stated objectives was to benefit the local industry and sugar planters in particular, but earlier this year the Senate discovered that proceeds gathered from this tax collection had not been passed down​ to these farmers.

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