‘More transparent’ sugar import system sought
Credit to Author: Eireene Jairee Gomez| Date: Tue, 21 Jan 2020 17:03:24 +0000
The Department of Finance (DoF) on Tuesday said that it is planning to pursue some changes in the country’s sugar import system and make it more transparent for the benefit of all industry stakeholders.
In a congressional hearing on the proposed sugar import liberalization, Finance Assistant Secretary Tony Lambino said the department was targeting to basically involve stakeholders from various sectors in decision-making as to how much sugar should be brought into the country.
Lambino said the DoF was initially looking at the “auction method,” explaining the measure is a “publicly scrutinized process” that will properly identify importers and necessary volume of sugar imports through collaboration between the public and the private sector, resulting to a system that has “accountability built into it.”
“If the decision on how much volume will come in is made by a few people… even if they are very smart people, mahirap i-outsmart ‘yung market (it is hard to outsmart the market). But if we let the market help us decide, through an auction system, for example, baka mas maging efficient ang system na ito (this system may become more efficient),” Lambino explained.
A more transparent import system, he said, will also help ensure the supply of the sweetener both for consumers and industrial users.
“There is the issue of demand na hindi natin palaging nabibigyan ng akmang supply (that we could not always give adequate supply for). In the case of, for instance, some food manufacturers malaki ang demand nila (their demand is large). Minsan po ay ang datos namin nakikita natin na (Sometimes we see data showing) we are not able to provide necessary supply given the demand,” Lambino explained.
About 50 percent of locally-produced sugar goes to industrial users, while the remaining 32 percent and 18 percent are consumed by households and institutions, respectively.
Lambino clarified that while adjustments in the country’s sugar import system has no definite timeline of implementation yet, the DoF’s ultimate goal is to make local production competitive and help facilitate the needs of the food manufacturing sector.
“The current system is where we’re starting. We’ll see what the options are and alternatives and what directions we can explore,” the official said.
Holistic study
Meanwhile, the DoF is also eyeing to conduct a study that aims to find ways on how the government can elevate the local sugar industry, according to Lambino.
Some of these “competitiveness enhancing measures,” he said, include enhancing the sharing agreement between planters and millers, leaning toward more efficient milling capacity for local sugar production.
“Compared to other countries, we are less efficient in the recovery coming from sugarcane to raw sugar. Yung sistema po kasi natin ngayon may sharing yung planters and miller na (The system today involves sharing between planters and millers is) about 60-40 or 70-30.
That system has led to less efficient milling capacity in the Philippines,” Lambino said.
He said the DoF was also looking at how the Department of Agriculture and Sugar Regulatory Administration (SRA) efficiently implement the Sugarcane Industry Development Act (SIDA), which has an allocation of P2 billion aimed at increasing the industry’s competitiveness.
Under the law, bulk of the annual fund of SIDA or P1 billion should go to infrastructure for farm-to-mill roads; P300 million for credit; P300 million for block farm of the land reform beneficiaries; and P300 million for shared facilities program; and P100 million for scholarships.
For this year, however, SIDA’s allocation was only P500 million, a sustained decline from P1 billion in 2018, P1.5 billion in 2017, and P2 billion in 2016.
There are currently about 700,000 sugar farmers and farm workers scattered across 28 provinces, including Negros Occidental, Negros Oriental, Cagayan and Bukidnon.
According to National Economic Development Authority Director Nieva Natural, the agency has also given the go for a “holistic study“ that will primarily determine the impact of liberalization to the Philippine sugar industry.
“We are proceeding with caution kaya sisimulan natin sa pag aaral (that’s why we’re starting with a study),” she said.
“[W]e have constructed out an index study which will run for six months starting this month. Probably by July ay available na ang resulta ng study na mag ga guide sa atin kung ano ba yung proper action and policy na kailangan para maaddress yung mga problemang kinakaharap ng industry (The results of the study will probably be available by July, which will guide us on the proper action and policy that we need to address the issues the sugar industry is facing),” Natural explained.