GOVERNMENT SEEKS TO DEREGULATE SUGAR IMPORTS

Mary Grace Padin (The Philippine Star) - January 17, 2019 - 12:00am

MANILA, Philippines — the government is seeking to liberalize the importation of sugar

to push down the price of the commodity and improve the competitiveness of the
country’s food export industry, the Department of Budget and Management (DBM) said
yesterday.

In his weekly press briefing, Budget Secretary Benjamin Diokno said the government
wants to deregulate the importation of sugar, following the Congressional approval of
the proposed Rice Tariffication Bill.

Diokno said this move would help cut the cost of the commodity, which would then
benefit the exports sector. “Next is sugar. You know why? Because it’s one of the inputs
to our potential exports,” he said.

“Sugar in the Philippines is very expensive compared to the global rate, so we plan to
deregulate or relax,” he said.

Diokno said the government is targeting to have this new policy implemented within the
year.

According to the budget chief, the liberalization of agricultural imports is one of the
policy reforms being pursued by the Duterte administration.

“That’s the policy now of the government, deregulation. Like freer importation of all the
food products,” he said.

He said this policy direction has been in place since last year, when the government
eased administrative restrictions on the importation of agricultural products to temper
down inflation.
Diokno, however, admitted that such policy could hurt local farmers.

“Greatest food for the greatest number. This will really hit farmers that are not
competitive, but it would be good for the consumers. For example, as a result of
tariffication, price or rice will go down by at most P7 per kilo. Wouldn’t that make
consumers happy?” he said.

To compensate for this, Diokno said domestic producers would have to become more
competitive, while the government should provide them with new skills and farming
methods.
Najmia D. Samporna BSBA- Marketing Management

Deregulation is the process by which rules and regulations are removed or

reduced in order to make markets increasingly efficient. It occurs when the government
moves to reduce its control of various industries to allow players in the industries more
autonomous and free.

The deregulation of sugar imports, as stated in the attached article, aims to push
down the price of the commodity and improve the competitiveness of the country’s food
export industry. Relative high prices of sugar in the country have hurt food
manufacturing and other industries. Because of its expensiveness, we must deregulate.
Once implemented, it would affect both the consumers and producers (farmers). If the
price is lowered down, it would be very good on the part of the consumers, silently
giving problem to the local farmers. It would help the country further grow, as it will gain
more saving from cheaper price of the sugar. It would attract more audience since the
price is cheaper and pocket-friendly, which results to the increase of the level of their
happiness and satisfaction. The demand for the commodity would raise because of this
which means that there would also be an increase in the competitive spirit of the
producers. It will really hit the producers that are not competitive. They will have to
make use of their skills and all methods to provide for better and best value for the
increasing number of consumers. And what makes it more challenging is that there
would definitely be a large number of producers in the industry and if a producer is not
competitive enough, then he or she would not win the game. But if we look closely
about this matter, the plan to decrease the price of sugar would also cause financial
difficulties on the part of the farmers. Earning low income would put more pressure on
farmers. And some would have no choice but to stop farming. All of this display how
highly the market economy of the country will be affected once it is implemented.
 In conclusion, clearly, liberalizing sugar prices will result to more growth
opportunities, increase greater competition in the industry and improve markets’
efficiency, given that a large percentage of our food manufacturing is based on food
processing, which is dependent on sugar. However, like what Diokno said, the
government should also extend efforts to help sugar producers modernize and improve
sugar output in the country and create an astonishing finish.