MANILA, Philippines — The National Economic and Development Authority (NEDA) said sugar importation should be allowed if local production is unable to meet the rising demand to prevent further price increases.
“Local production has to grow. Now if it cannot grow, imports should be allowed. Otherwise, prices will continue to skyrocket,” Socioeconomic Planning Secretary Arsenio Balisacan said on the sidelines of the 2022 EJAP-SMC Economic Forum yesterday.
He said there are ongoing discussions with domestic producers to find out if they can produce enough given the problem in supply, that is leading to higher prices.
“That is an ongoing exercise right now because we are preparing some papers... for addressing this current issue,” he said.
He said sugar prices have been rising by over five percent per month since the beginning of the year.
“So it’s a bit quite fast. And obviously, for us, as economic managers, we have to worry about that, because that would have impact not just on our local producers, but also for our food manufacturers, our SME (small and medium enterprises), banana que, camote que [vendors], and they are all users. So there is a lot of employment that will be affected by soaring prices,” he said.
The NEDA chief said the biggest problem of the sugar industry right now is the insufficient volume of supply.
“The economy is growing, the economy is recovering so, demand is rising. Production has fallen in recent years and particularly this cropping year because of Typhoon Odette,” he said.
In order to come up with a solution to address the problem, he said there is a need to see the production potential of the sugar industry vis-a-vis demand.
He also said there is a need to strike a balance in the interests of different sectors in addressing the problem.
“While we protect our farmers from headwinds, we also have to ensure that the tools that we employ to protect our farmers do not harm the rest of the economy, especially that we are trying to get poverty reduced, the economy moving at high growth trajectory,” he said.
In a statement, Foundation for Economic Freedom (FEF), which groups economists, former and present Cabinet secretaries, as well as members of the academe and the business and finance community, said they are concerned with the rising prices of sugar given the increasing inflation for this year, and its adverse consequence on the incomes of millions of consumers and food processors, particularly the small food vendors.
The group said it was informed that a number of bottling and fruit juice companies in the country have cut down on the number of workers they hire because of inadequate sugar supply and the soaring prices of sugar in the country.
“They will be compelled to close down their operations soon if there will be no sugar available in the coming months,” FEF said.
It said a number of these food processing companies had already decided to relocate their operations to neighboring countries because of the high cost of raw materials, particularly sugar, which is a basic ingredient in food processing.
“But for us, what is more worrying is the fact that high sugar prices are frittering away the already meager incomes of the millions of our food vendors selling banana and camote ques, turon, and various types of native delicacies. We all know that this group of our people was forced to self-employ because of the limited number of jobs available in the formal labor sector,” FEF said.
The group said these food vendors’ interests must be considered and balanced with that of sugar planters and farmers.