Economic managers said Wednesday that the sugar supply shortage in the country could affect the economy’s recovery from the pandemic.
In a San Miguel Corp.-sponsored Economic Journalists Association of the Philippines forum, Economic Planning Secretary Arsenio Balisacan said the impact could be felt in terms of low tax revenues generated from manufacturers of soft drinks and other carbonated beverages.
“If soft drinks production goes down, billions of pesos in revenues will be lost,” Balisacan said.
For his part, Bangko Sentral ng Pilipinas Governor Felipe Medalla said as the economy was recovering from the pandemic, it was natural that the demand for sugar was rising.
He said the growing demand and shrinking supply could be “a formula for disaster.”
Medalla on Wednesday proposed that the government set up a tariff scheme on imported sugar as food manufacturers appealed to allow more sugar imports even as farmers’ groups opposed higher import quotas.
Medalla said that instead of quotas, it would be better to allow stakeholders to do the importing with tariffs as this would also prevent corruption.
Medalla added that this would also reduce red tape and smuggling.
In January 2018, the country started imposing a tax of P6 per liter on sweetened beverages under the Tax Reform for Acceleration and Inclusion Law.
Studies have shown that the tax could generate total health care savings of P31.6 billion over 20 years, and raise P41 billion in revenue per annum.
Earlier, leading soft drinks manufacturers said the bottling industry has started to feel the impact of the sugar supply shortage in the country.
Coca-Cola Beverages Philippines Inc., Pepsi-Cola Products Philippines Inc., and ARC Refreshments Corp. said in a joint statement that the industry was facing a shortage of premium refined sugar, which is a key ingredient in many of their products.
In another statement, the Foundation for Economic Freedom said it was informed that a number of bottling and fruit juice firms in the country have cut down on the number of workers they hire due to the sugar shortage and increasing prices of the commodity.
Balisacan said the sugar shortage woes were compounded by the lower domestic production following the damage wrought by Typhoon Odette, which hit the sugar-producing areas in the Visayas and Mindanao.
“The economy is recovering… so you can imagine the increase in demand for food, including soft drinks. So the requirements have increased… Our local producers were not able to meet the demand due to said problems,” Balisacan said.