Need for speed

When bureaucratic  slowness is the reason for losing existing jobs, the need for speed becomes imperative.

This need is now evident in the food processing industry, which accounted for 51 percent of the manufacturing sector during the first semester this year.

This is more than double the combined shares of the next two largest manufacturing subsectors : radio, television, and communication equipment (14 percent); and chemicals (7 percent).

We must, therefore, pay special attention to food processing. In addition to being the largest manufacturing subsector, food processing inputs come from agriculture, where poverty is unfortunately present. Action in this area is therefore crucial  to achieve inclusive growth.

Today, food processing is threatened by spiraling prices of sugar.

Agriculture Secretary Emmanuel Piñol has asked for the importation of 300,000 tons of sugar, but none of this is allocated specifically  for the food processing industry.

According to Roberto Amores, president of the Philippine Food Processors and Exporters Organization (Philfoodex), the food processing industry needs 100,000 tons of imported sugar for the next three months to safeguard the employment of the people in this industry.

This is because, recently, prices of domestic sugar skyrocketed to P60-65 pesos a kilo, more than double the imported sugar price of P26-28 a kilo.

Consequently, local products that have to use domestic sugar are at an unfair disadvantage to food imports using imported sugar at less than half the price.

This is not a level playing field, and goes against inclusive growth. In the interest of fairness, immediate action must be taken.

Amores teamed up with the Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation (Philexport) to ask that government allow the importation of sugar to enable food processors to compete with the lower-priced imports.

This was done in a letter sent as early as three months ago on June 20. Amores, PCCI President Alegria Limjuco, and Philexport President Sergio Luis Ortiz jointly signed a request to Piñol asking for the initial release of 100,000 tons of imported sugar only for food processors.

Two safeguards were identified: firstly, the imports would be used only as inputs to manufacturing; and secondly, these manufacturers would not be allowed to sell imported sugar as traders.

Amores, also the spokesperson of one of the five coalitions making up the Agri Fisheries Alliance that focuses on inclusive growth, added an important provision.

To prevent leakage which would harm small farmers, all eligible importers must be certified by Philfoodex, with specific amounts identified for each manufacturer. This will enable strict monitoring and enforcement by the three organizations and government. This limited imported sugar importation was supported by Trade Secretary Ramon Lopez when he said: “World prices are much lower, and it is fair to allow importation to serve the supply requirements of sugar users.”

A follow up letter on Aug. 17 to Sugar Regulatory Administration head Hermenegildo Serafica cited “4000-5000 domestic food processors using sugar as an ingredient … most of which are SMEs.”

On Sept. 26, another letter was sent, referring to President Duterte’s Administrative Order 13 signed on Sept. 21.

In that order, the relevant government agencies were instructed to “temporarily allow direct importation of sugar using industries to cut their input cost.”

It has been a long three months since the July 20 request was sent. No action has been taken. Meanwhile, our products are losing out to importation because of an unfair level playing field. Existing jobs are being lost in the largest manufacturing subsector of food processing.

This has an even larger impact on the small farmers and fisherfolk who provide the essential inputs for food processing.

There is indeed an urgent  need for speed, lest more poverty ensues, and inclusive growth becomes more rhetoric than reality.