By Vonn Andrei E. Villamiel
THE DEPARTMENT of Agriculture (DA) said it is considering higher tariffs on artificial sweeteners to protect the local sugar industry amid a surge in imports.
Agriculture Secretary Francisco P. Tiu Laurel, Jr. said the DA is currently studying an appropriate tariff rate for sugar substitutes, with an initial plan to raise the existing 5% duty.
“I was with Finance Secretary [Frederick D.] Go at an event with the President. I discussed with him what he can say regarding artificial sweeteners. We’re going to formulate and calculate what the tariff rate is,” he told reporters on the sidelines of an Economic Journalists Association of the Philippines event late on Monday.
Mr. Laurel said the increase “should not be too high” but sufficient to encourage greater demand for domestically produced sugar.
The department said the proposed increase in duty follows a surge in imports and use of artificial sweeteners last year, which dampened demand and farmgate prices for locally produced sugar.
Mr. Laurel said imports of artificial sweeteners increased by 200,000 metric tons in raw sugar equivalent last year, contributing to discrepancies in the DA’s sugar demand projections.
To protect the domestic industry, the DA earlier announced a suspension of sugar imports until the end of the year, except for volumes in exchange for exported sugar.
Mr. Laurel said the DA will also tighten the regulation of molasses imports, which he said are currently unregulated.
“We have a problem with molasses. The importation of molasses is unregulated. Molasses just arrived in our ports. That’s the only time they declare it, and a permit is just issued,” he said.
The DA said it will also audit molasses users, particularly those involved in alcohol production, following discrepancies it observed in molasses usage.
Sugar producers welcomed the proposal to increase the import duty on artificial sweeteners.
Manuel R. Lamata, president of the United Sugar Producers Federation of the Philippines, told BusinessWorld that the surge in sugar substitute imports contributed to the decline in farmgate prices.
“More sweeteners came in. The effect was a big drop in our millgate prices from a high of P2,600 per 50-kilo bag of raw sugar to P2,100 per bag, which was way lower than our production cost,” he said in a Viber message.
Mr. Lamata said a higher import duty could help increase millgate prices for farmers, as industrial companies would have to prioritize buying locally produced sugar.
