Local sugar stakeholders said a House resolution opposing a proposal of the Department of Finance (DOF) to liberalize sugar importation will protect the local industry.
The Confederation of Sugar Producers Associations (Confed) said 11 representatives filed House Resolution (HR) No. 1199 last week, 10 of whom are from the Negros region.
“While we recognize government’s need to raise more revenues, it should not be done in a way that will be disadvantageous to sugar producers… What sugar producers need are more government programs to boost our production and lower our production costs, and more conducive import and taxation policies which support and protect our farmers,” said Aurelio Gerardo Valderrama Jr., Confed national president, in a statement.
The DOF proposes to increase the tax rate of sugar-sweetened beverages and allow food and beverage manufacturers to directly import sugar.
HR 1199 cited a 2021 study commissioned by the National Economic and Development Authority which said full liberalization would benefit the higher-income groups more than lower-income groups.
The resolution said the study noted “modest net gain to overall society from full sugar liberalization of P2 billion or 1.8 percent” and recommended “a gradual or phased-in liberalization.”
The Philippine Sugar Millers Association (PSMA) also supported the resolution, saying the DOF proposal “will deliver a dual blow to both farmers and workers.”
“Not only will the excise tax on sugar-sweetened beverages be raised but (would also allow) beverage producers to bring in foreign-produced sugar to offset the increase in cost stemming from the higher excise tax. The entire sugar sector is in consensus that should this scenario materialize, it would lead to the demise of our industry,” said Cocoy Barrera, PSMA executive director, in a separate statement.
HR 1199 also said Tax Reform for Acceleration and Inclusion (TRAIN) Law was supposed to plough back revenues from the collection of tax on sweetened beverages to programs aimed at increasing domestic sugar production and promoting the welfare of sugarcane farmers and farmworkers.
The representatives said in the first five years of the TRAIN Law’s effectivity, 30 percent of its revenues was to be used to finance social welfare programs, including the P2 billion annual allocation for the sugar industry under the Sugarcane Industry Development Act (SIDA).
However, the resolution said only P3.92 billion had been allocated in 2018 to 2023 for SIDA programs even if revenues from the TRAIN Law for the same period reached P336.1 billion, 52 percent of which came from taxes on sweetened beverages. -Jed Macapagal
