Decision on sugar liberalization to be made soon

MANILA, Philippines — The government will soon decide whether it will push through with its plan to liberalize the local sugar industry, a move which does not sit well with stakeholders and even lawmakers.

The study of the National Economic and Development Authority (NEDA) continues. The industry-wide study aims to analyze the pros and cons and the impact of opening up the sugar sector.

“We target to release it by May or June. That is the decision point,” NEDA assistant secretary Mercedita Sombilla told The STAR.

“We will first present it to the EDC (Economic Development Cluster) and then if EDC clears it, proceed to the Cabinet and it will depend on the decision of the Cabinet,” she said.

The EDC is composed of NEDA and the departments of Trade and Industry, Budget and Management and Agriculture, among others.

It is chaired by the Department of Finance (DOF) which in September last year issued an economic bulletin formally proposing the liberalization of sugar imports.

Sombilla said the decision to liberalize would depend on the outcome of the study.

“The meeting with stakeholders continues since NEDA is gathering data, so more or less what the stakeholders are saying will come out in the study,” Sombilla said.

“It will all depend on the study. There are so many problems in the sugar industry, they did not modernize, they did not use new technologies and the processing is very antiquated,” she said.

It was in January when NEDA said it was contracted to conduct the study as it shares the observation of the DOF on the unrealized potential of the sugar industry and that there is a need to improve competitiveness and productivity of the sector.

It was also around that time when the House of Representatives passed two resolutions opposing the proposed liberalization of sugar importation by the economic managers. The Senate has already unanimously junked the proposed measure.

Latest data from the Sugar Regulatory Administration showed that local raw-sugar production went down 13 percent to 1.11 million metric tons (MT) as of the third week of February.

The country’s raw sugar demand was also six percent lower at 770,583 MT from the 2019 level of 822,996 MT.

The total sugarcanes milled during the period was 12.5 million MT, a 10 percent drop from previous year’s 13.9 million MT.

Meanwhile, mill gate price of the commodity is almost flat at P1,539 per 50-kilo bag.

The Philippines has allocated the bulk of its target production for the crop year to the domestic market with expected improvements in total output.

Bulk or 95 percent of the sugar production will be for the domestic market, while the remaining five percent will be for the US market.

The Philippines expects to produce 2.096 million MT of sugar for the crop year, 23,000 MT higher than last year’s actual production of 2.073 million MT.