Biz Groups appeal to SRA: Allow processors to import 50% of sugar requirements

CEBU, Philippines — The Sugar Regulatory Administration has been asked to allow domestic processors to import 50 percent of their total sugar requirement.

In her appeal letter to SRA, Philippine Chamber of Commerce and Industry president Alegria Limjoco said "this imported sugar will only be used by local food processors as inputs in their production and neither for retail nor wholesale trade."

Her letter, furnished to the FREEMAN, was also signed by the presidents of the Philippine Exporters Confederation (Philexport) and Philippine Food Exporters and Processors Organization Inc., (Philfoodex).

The groups hoped the SRA will consider their proposal.

Limjoco cited that imported sugar-based food products from Southeast Asian countries enjoy preferential tariffs of 5 percent under the ASEAN Free Trade Agreement.

Additionally, these ASEAN food processors buy their sugar at the equivalent of P26 to P28 per kilo.

These ASEAN products have been coming into the country and threatening similar domestic products with sugar inputs priced from P60 to P65 per kilo.

Sugar is an important ingredient for many of the country's food processors.

The prohibitive price of domestic sugar has long been traced by studies to the already unreasonable protection that the government had been providing the local sugar industry.

"While we agree that our farmers need some assistance, we can no longer justify cuddling an industry at the expense of the greater majority of Philippine consumers and food manufacturing sector that are bearing the brunt of the high cost of this protection. This situation has likewise become a breeding ground for smuggling," the appeal letter further read.

There are approximately 4,000-5,000 domestic food processors using sugar as ingredient, who are part of the 99 percent MSMEs, and benefitting 50-60 million consumers and stakeholders that would take the brunt of high cost of sugary made products compared to the 50,000-60,000 farmers, which can be given alternative source by shifting to high value crop production.

The local food industry is composed of small and medium entrepreneurs, mostly under Philfoodex, which has about 250 individual members and business organizations.

Sales of their food & beverage products which are sugar-based are already challenged by taxes under TRAIN 1, which hikes taxes on sugary drinks.

Allowing these producers to import their sugar inputs will mitigate the impact of this new tax policy and will put them in a more competitive position against similar imported food products. (FREEMAN)