Government eyes auction system for sugar imports

MANILA, Philippines — The government is considering an auction system for sugar imports, saying the current arrangement lacks efficiency and transparency.

During the House Committee on Agriculture and Food inquiry yesterday, Finance Assistant Secretary Antonio Lambino said there appears to be a problem in the transparency of the importation system of the sugar industry and that an open tender should be considered.

“Instead of deciding on the amount, volume and who will receive the permit, maybe an auction instead is possible,” Lambino said.

“We can even open that to the public, a scrutinized process where we can see who bids and how much,” he said.

An open tender system allows all qualified bidders to join. Bids are opened to the public and are chosen on the basis of price.

On the other hand, the current system of the Sugar Regulatory Administration is dependent on the existing supply and demand.

RA allocates a specific volume and importers apply for permits based on guidelines set.

Lambino said the establishment of a fairer import permit system should be studied to uphold public interest.

He likened the system to the current system of the Bureau of the Treasury in doing auctions for banks.

Apart from a fairer import system, Lambino cited other competitiveness-enhancing measures including a better sharing agreement between planters and millers, effective implementation of block farming and an efficient utilization of the budget under the Sugarcane Industry Development Act.

From its annual budget of P2 billion, SIDA’s allocation has been cut to P500 million this year due to SRA’s absorption incapacity.

Lambino said the proposed liberalization is different from what happened to the rice industry.

“Sugar is under the ATIGA (ASEAN Trade in Goods Agreement) regime where the commodity has a five percent tariff already and 50 percent outside Asean,” Lambino said.

The National Economic and Development Authority, meanwhile, said there remains no concrete policy regarding the liberalization of the sugar industry, saying a study on the plan will start soon.

“We have been contracted for an in-depth study for six months starting this month. We will study the pros and cons and its impact. We share the observation of DOF about the unrealized potential of the sugar industry and that there’s a need to improve competitiveness and productivity,” NEDA director Nieva Natural said.

“We are proceeding with caution that’s why we are starting with a study. By July, the results will be available to guide us as to the proper actions and policies needed to address the problems faced by the industry,” she said.