The confectionery industry stands to lose P8.5 billion in revenue and some 20,000 workers may lose their jobs this year if the government will not allow industry players to import sugar.
In a briefing yesterday, current and former officials of the Philippine Confectionery Biscuits & Snack Association (PCBSA) called for the government to allow them to import sugar.
Local sugar, an important ingredient in confectionery products, has become 200 percent more expensive than the sugar from other countries, the group said.
The problem, however, is that confectionery manufacturers are not allowed to import the commodity since the government is protecting the local sugar industry.
The 18-member PCBSA accounts for 65 percent of the local market, while the balance is accounted for by big players such as Gokungwei-led Universal Robina Corp.
For PCBSA alone, failure to import in the next three months would cost it P3.25 billion, on top of the P1 billion in losses that related industries such as logistics and packaging might also incur, according to the group’s former president, Reynaldo Go.
“My computation is only based on our (members). That is only 65 percent (of the local market). For the total, you can double (the amount). The total industry projection would be P8.5 billion [worth of revenue] losses,” he said in a mix of English and Filipino.
“In terms of jobs that would be lost, we can easily say 20,000,” he added.
PCBSA president Kissinger Sy, who was also in the briefing, recently wrote the Department of Trade and Industry (DTI) to appeal for the latter’s support. Trade Secretary Ramon Lopez later agreed to the group’s position.
But the group has other government agencies to convince, such as the Department of Agriculture and the Sugar Regulatory Administration (SRA). It is still unclear if they would also agree to this.
Sy said in his letter that the “prohibitive” price of domestic sugar would make locally produced confectionery items uncompetitive against their imported counterparts.
Go said the group needed a “stop gap” solution to its problems until the milling season starting October.
From July onward, he said they wanted to import 300,000 bags of sugar.
Go said he preferred if the manufacturers would import directly, instead of having to go through traders, which he said would only make the process more expensive.
This is one of the conditions that the industry suggested to the government in allowing such imports.
Sy, in his letter, had proposed interim measures.
In particular, he recommended that the importation should be used only for the manufacturing requirements of PCBSA member-companies. He also said member firms should not be allowed to sell imported sugar and act as traders.
Lastly, he said the importation should be a one-time arrangement for this year.