The head of the House Ways and Means Committee urged the Department of Sugar Regulation to issue “clear and coherent” rules for allocating sugar import volumes and determining the amount of total imports allowed.
Albay Joy representative Sarti Salcida released the statement over the weekend amid the possibility that the country will require at least 400,000 metric tons of imported sugar in the 2022-2023 crop season that began on September 1.
Salceda said the SRA’s pre-milling season estimates that the country will produce just 1.876 million metric tons of sugar this year, less than 400,000 metric tons from the usual minimum demand of 2.2 million metric tons.
“We need rules now, so that the hype about sugar order #4, and how to allocate sugar order #3, doesn’t happen again. We now know what problems can arise when rules are not clear. It is time to determine how to define How much to import, and who can import what and how much,” he said.
“The price of sugar here has always been three to five times the price of sugar in the world market. So, in order to be able to maintain our own domestic demand, the rules on how much to import and who can import should be clear at the very least.”
Meanwhile, Salceda suggested an auction of sugar import bins to ensure “fair allocation” as well as to generate revenue to support the local industry.
The lack of transparent rules may lead to corruption in the granting of import permits. In economics, when public resources are scarce, the best way to manage them is often through auctions. It would generate funds to develop the local industry, he said, rather than the supposed “distributed” way the SRA allocates import permits, which of course favors established companies and big players.”
“It should not be the decision of a single government body. Who can import at P20 or less and sell at P120 at retail is a unique privilege. It’s rent, basically. And it’s a superpower—and potentially a major source of corruption—if we don’t coordinate the way we These permits are granted.
Salceda also proposes to create a local sugar industry compensation fund for the local sector, from auction proceeds.
“Charge them only 10 per cent of the difference between the cost of importing the goods and the local prices. This is what we can offer to the sugar growers as direct compensation for injuries sustained from imports.
I consider the auction fee important because we do not impose customs duties on sugar from ASEAN countries. Therefore, in lieu of tariffs, these fees can fund local competitiveness programs as well as direct compensation, similar to financial assistance to rice farmers or RFFA funds.”
Salceda also suggested that the SRA issue these rules, or recommend that the President issue an executive order to that effect.
“There are promising policy solutions here that will reduce corruption, increase the resources available to local industry, and make import programs relevant and more responsive to actual market demand.”