Evidence-based approach to be followed in opening up sugar sector

MANILA, Philippines — The government will follow an evidence-based approach in pursuing the liberalization of sugar importation to ensure that the needs of industries are met and assistance will be provided to affected farmers, according to the National Economic and Development Authority (NEDA).

Undersecretary for Policy and Planning Rosemarie Edillon said the agency is now reviewing feedback from the industry regarding the plan of the economic team to liberalize sugar importation to drive down prices of the commodity and improve the competitiveness of industries.

NEDA is set to commission a study this year to determine the merits of the apprehensions of the sugar industry that liberalization of sugar trade will kill the industry and impoverish farmers.

“We have received so many petitions coming for the sugar industry. The first thing we need to do is undertake a study so we can have an evidence-based (approach). It is something that we will be recommending this year,” said Edillon in a recent interview.

“We will be looking at the evidence and find out what is the best response to this,” she said.

The comments put forward by the sugar industry stakeholders will also be brought to the attention of the economic team, she said.

Socioeconomic Planning Secretary Ernesto Pernia said earlier that the high price of sugar in the country is preventing several industries – like food manufacturing – from becoming competitive.

The planned removal of constraints in the importation of sugar comes in the wake of the recent enactment of the law that liberalizes the importation of rice.

The domestic sugar industry is among the most regulated and protected sectors in the country with the Sugar Regulatory Administration (SRA) strictly allocating the use of locally-produced sugar and setting the maximum import volume for the commodity.

Pernia had acknowledged, however, that it would be more difficult to liberalize sugar imports that it is to tarrify rice because the lobby would be stronger.

Several options considered to liberalize sugar importation include amending the law creating the Sugar Regulatory Administration (SRA) or easing constraints administratively.

Edillon said that in the course of the study, it would also be determined if the loans and grants provided by the government under the Sugarcane Industry Development Act of 2015 (SIDA) has been utilized properly.

Under the law, credit is provided by the Land Bank of the Philippines for the purchase of farm machinery and inputs needed for the effective production of sugarcane.

Grants are also given for technology adoption, skills training and other development activities for sugar block farms.

“The industry has also been receiving grants from the government through SIDA. I think that’s also where we cab start, having an assessment on how that has been used and how this has led to innovation in the industry,” she said.

“If it has not, let’s find out how to best improve the sector,” she said.