DoF eyes sugar tariffication

THE Department of Finance ( DoF) is pushing for tariffs on imported sugar after its latest economic bulletin showed that high prices of the commodity are weighing down consumers and downstream industries.

In a statement on Friday, the Finance department said “reforms are needed to introduce competition in the 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 ( Association of Southeast Asian Nations) counterparts,” it added.

For example, the DoF said, Thailand and Malaysia embarked on industrialization by modernizing agriculture and boosting their food processing sector.

“This strategy did not work for the Philippines due to [ the] high EPR ( effective protection rate) of the basic food processing input,” it noted.

Using the ratio of wholesale prices as the effective tariff for the industry, the Finance department said sugar had an EPR of 247.8 percent because of the lower tariff rate on its inputs.

It added that, for the past eight years, quantitative restrictions imposed on sugar imports raised the wholesale price of refined sugar to 235.8 percent above the export price of Thailand and 393.2 percent above the Food and Agriculture Organization’s ( FAO) reported prices.

“This means that consumers and downstream industries have been paying more than twice [ or thrice using FAO prices] the global price for the commodity,” the DoF pointed out. “The restricted level of imports directly affects the level of domestic prices.”

The Finance department also said