Industry groups contest 'sugar shortage' claim, hit lack of consultation on sugar importation order
MANILA, Philippines — Industry groups decried what they said was the lack of consultation with stakeholders before the issuance of Sugar Order No. 4, which would have allowed for the importation of 300,000 tons of sugar into the country.
Speaking at the Senate's first hearing on the sugar fiasco issue Tuesday afternoon, Ruben See, president of the Philippine Food Processors and Exporters Organization Inc., a major stakeholder in sugar importation, said the group was never consulted before Sugar Order No. 4 was issued, contrary to the assertion of former Agriculture Undersecretary Leocadio Sebastian earlier on.
Categorically asked if the group's member organizations feel the effects of a shortage, See responded in the negative, saying a bigger problem for them was the high cost of sugar. See also said that the group's members can consume up to 450 sacks of sugar per week in their businesses nationwide.
"If the cost of sugar is high, exporters won't be competitive," See said in mixed Filipino and English. "Right now, if you buy from Thailand and Asian countries, the price of sugar, the landed cost in the Philippines is only about P40. But as of now, if the price is P80 to P100, the industry will not be competitive."
Earlier in the hearing, Former Agriculture Undersecretary for operations Leocadio Sebastian admitted he signed the order on behalf of President Ferdinand Marcos Jr., who eventually revoked the order. But he said he did so to prevent a massive shortage of sugar, which senators pounced on.
In contradicting this, Senate President Juan Miguel Zubiri presented photos of what he said was "a sea of sugar" of some 100,000 metric tons of sugar being hoarded in warehouses supposedly for price manipulation in the wake of the previous Sugar Order No. 3.
The photos showing suspected smuggled sacks of sugar were taken by customs personnel over the past few weeks in raids led by Executive Secretary Vic Rodriguez, who was also at the hearing.
Zubiri also cited data from insiders in the Sugar Regulatory Administration claiming that there was still a reserve of 127,000 tons of sugar in warehouses.
"Is this the shortage you are talking about? Are we going to pretend this doesn't exist?" he said, referring to the Bureau of Customs' photos.
Coca-Cola: Sugar scarcity felt in operations
Senators for the most part turned on the former undersecretary Sebastian, who was among the Agriculture and sugar officials who quit their posts following the controversy.
"Based from SRA and DA data, we will have a deficit of about 212,000 metric tons for raw sugar even if the milling has started in September and October...We have a deficit, even including Sugar Order No. 3, of 319,000 metric tons of raw sugar up to December," Sebastian said.
Lawyer Juan Lorenzo Tanada, who appeared on behalf of Coca-Cola Beverages Philippines president Gareth McGeown, said it attended a meeting on August 2 before the Department of Agriculture to discuss the effects to the company's operations.
"Yes, we feel the scarcity of sugar in our operations," he said. Reading an affidavit executed by McGeown, he also said: "Since the beginning of 2022, we began to observe a scarcity of bottlers grade premium refined sugar as well as a dramatic surge in prices of what available stocks we could source."
"I would say based on my seven years in the Coca-Cola system, this is probably the worst [shortage] so far," he responded in Filipino when asked if this was the first time such a shortage happened.
Sen. Francis Tolentino, who chairs the Blue Ribbon Committee, then responded by saying the company was effectively "refuting the claims of the Senate President" Zubiri.
SRA now claims order was for buffer stock, not addressing a shortage
Resigned Sugar Regulatory Administration administrator Hermenegildo Serafica admitted to drafting SO4 with his staff without consulting with the management of the SRA along with deputy administrators.
"In the past, any board member could craft a sugar order. There was no rule that only the regulations department can endorse a sugar order," he said.
"In this case, since it was a directive to craft an importation plan, we didn't want to let anybody know until such time it will reach the Office of the President."
Serafica also presented data arguing that a buffer stock of at least 200,000 metric tons of sugar is needed "to carry us through the lean months at the start of the next crop year."
"September production is not sufficient for the demand and barely enough in October," he said in arguing the need to import the 300,000 metric tons in SO4 "to supply the demand for September to November."
He added that 300,000 MT of sugar was also among the written recommendations of sugarcane industry stakeholders, including the Confederation of Sugar Producers Associations Inc., NFSP Sugar Workers Foundation Inc., and Luzon Federation of Sugar. Producers Inc., among others.
But Zubiri accused Serafica of attempting to "cover his tracks by justifying the order." He pointed back to the BOC's photos of container vans with sugar hidden in them.
"Why were these being kept under lock and key? Why were they not released to the consumers? Wasn't that the job of the SRA?" he said.
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