MANILA – The Philippine government’s quantitative restriction (QR) on sugar needs to be replaced by tariffs to make the industry competitive and make it grow at par with that of other members of the Association of Southeast Asian Nation (Asean).
In an economic bulletin, Department of Finance (DOF) Undersecretary Gil Beltran said reforms are needed to lift the domestic sugar industry.
“Quantitative restrictions need to be replaced by tariffs and safeguard measures (for subsidized products) to allow for more transparent, competitive pricing and allow downstream industries to become more viable and grow as fast as their Asean counterparts,” he said.
Beltran said sugar has an effective protection rate (EPR) of 247.8 percent based on the wholesale prices to date.
This, he said, is the reason for its high domestic price, which hinders the industry’s growth.
He noted that because of QR on sugar imports, the wholesale price of refined sugar rose by 235.8 percent in the last eight years to about PHP2,283 per 50-kilogram sack in 2018.
This is way expensive compared to the PHP842 for a 50-kg. sack of sugar in Thailand and the PHP430.22 per 50-kg. sack based on the United Nation’s (UN) Food and Agricultural Organization (FAO) rates.
Beltran said imports restriction directly affects domestic prices beyond the 5 percent tariff protection provided for under the Asean Trade in Goods and Agreement (ATIGA).
“Many Asean countries like Thailand and Malaysia embarked on industrialization by modernizing agriculture and boosting food processing sector. This strategy did not work for the Philippines due to a high EPR rate of the basic food processing input,” he added. (PNA)
