FPI sees corn sweetener imports as spur for domestic sugar sector

THE Federation of Philippine Industries (FPI) said that it is open to the tariff-free importation of sweetener high fructose corn syrup (HFCS) as a means of stimulating the competitiveness of the sugar industry, as long as users purchase equivalent amounts from cane sugar producers.

“We should allow (HFCS imports) as long as users buy similar volumes of sugar on the domestic market,” Federation of Philippine Industries Chairman Jesus L. Arranza said yesterday in a forum in Quezon City.

Mr. Arranza said that his proposal would promote competitiveness in the sugar industry, and at the same time provide a degree of protection.

The FPI comprises 150 corporations, including beverage companies which use HFCS.

The government is currently seeking to regulate HFCS imports and persuading users to buy more domestic sugar.

HFCS imports are blamed for driving down sugar prices, damaging the livelihood of sugarcane farmers.

As of mid-May, the average price of raw sugar dropped to P1,582.50 per 50-kilo bag, from the P1,786.43 recorded in December.

Mexico’s Coca-Cola FEMSA, a major soft drink producer which controls the rights to Coca-Cola in the Philippines, has said that it was willing to support sugar farmers but requires the flexibility to use HFCS because its equipment is configured to use the corn sweetener.

Mr. Arranza said that the government should tighten its watch on imports of HFCS amid plans to impose a tax on beverages containing natural or artificial sweeteners, which might encourage illicit trade.

“I am not against importing HFCS but I want imports to be above board, paying correct duties and taxes, no monkey business. If they do that, we are willing to compete despite the fact that we have a higher cost,” said Mr. Arranza.

Under House Bill 5636 or the Tax Reform for Acceleration and Inclusion Act, the bill consolidating the Finance department’s tax reform program with other similar bills seeks to impose a P10 excise tax per liter on sugarsweetened beverages, as a health measure.

Mr. Arranza opposes this measure saying that there is no need to put a tax on sugar to generate more state revenue. Alternatively, the government could tighten Customs regulations to minimize losses from smuggling.

He noted that around P200 billion is lost in the misdeclaration of goods, citing an estimate from the International Monetary Fund.

The tax reform bill projects some P47 billion in additional revenue from the sugar tax, proceeds of which will be earmarked for health programs and programs to support sugar farmers who may be affected by any dampening of demand for their product. —