Diokno defends sugar import liberalization amid plan to raise sugary drinks tax

Finance Secretary Benjamin Diokno on Wednesday defended his call for industrial users or manufacturers to directly import their sugar needs.

He said it was a “sweetener” for the government’s proposal to increase duties and broaden the tax base for sweetened beverages.

“When you do policy, you think of what’s good for the greatest number,” Diokno said at the Kapihan sa Manila Bay forum.

The Finance chief was asked for his comment on the United Sugar Producers Federation’s (UNIFED) opposition to the plan “to liberalize importation in favor of a few industrial users.”

UNIFED said the move would "kill the (livelihood of) more than five million Filipinos who are dependent on the sugar industry.”

Diokno has said that sugar trade liberalization was a “reasonable compromise” in line with the planned higher taxes on sugary drinks.

The Department of Finance is proposing to increase the beverage tax rate under the Tax Reform for Acceleration and Inclusion (TRAIN) Law to P12 per liter regardless of the type of sweetener used.

It also proposed to remove exemptions, and index the rate by 4% annually.

The TRAIN law mandates a P6 per liter excise tax on beverages using caloric and non-caloric sweeteners, and P12 per liter tax on beverages using high-fructose corn syrup.

Just like the situation in the rice sector, Diokno said the government had to consider the welfare of the entire population who will bear the burden of higher prices while considering the plight of farmers.

“That’s utility economics… It already happened during the time of President Duterte when industrial users were allowed to import 50% of their [sugar] requirement,” Diokno said.

“Our sugar is four times higher than the world price. If you allow them [manufacturers] to import their requirements, it will be affordable,” he added.

Under the current system, the Sugar Regulatory Administration (SRA) regulates the importation of sugar and determines the volume to be imported after assessing the local industry’s capability to satisfy the country’s consumption demands.

Diokno said that the proposal to increase the sweetened beverage tax and broaden its tax base was meant “to improve the health of our countrymen.”

“That's a proposal on the table right now… There will be consultations and in the hearings they can appear in the House and Senate and make known their objections,” Diokno said. —NB, GMA Integrated News