RP to keep tariff on refined sugar

RP to keep tariff on refined sugar

MANILA (Reuter): The Philippines will keep a 65 percent tariff imposed on refined sugar from neighboring Southeast Asian countries as it prepares for another round of fresh importation, a senior official said yesterday.

Sugar Regulatory Administration (SRA) chief Wilson Gamboa said Manila would remove the 35 percent tariff rebate on refined sugar from Southeast Asia starting July 1.

However, tariff on non-ASEAN countries will be reduced to 60 percent from the present 100 percent as part of the country's commitment to the World Trade Organization.

The Association of Southeast Asian Nations (ASEAN) is composed of Singapore, Thailand, Malaysia, Indonesia, Vietnam, Brunei and the Philippines.

"Starting July 1, tariff on refined sugar from Southeast Asian countries will be maintained but sugar tariff on other types of sugar will be dropped," Gamboa told reporters.

Tariff on raw sugar would also be cut to 60 percent from the present 100 percent. This is lower than the earlier 80 percent committed by Manila to the WTO.

The tariff plan has been approved by President Fidel Ramos, he said.

Sugar planters welcomed the withdrawal of tariff rebate on southeast Asian refined sugar, particularly from Thailand.

"If the tariff is not corrected, sugar from Thailand will be coming in at an effective 52 percent tariff," Manuel Lamata, president at United Federation of Sugar Planters of the Philippines, said.

"That would be catastrophic to the domestic industry," he said.

Gamboa said the tariff cut would drive the domestic sugar industry to become more competitive.

The Philippines suffered a sugar glut last year. Farmers and millers blamed the oversupply to the 35 percent rebate given to Southeast Asian countries.

Refined sugar imports grew from 12,155 tons in 1993 to 156,304 tons in 1996. The bulk of the imports came from Southeast Asian countries, the Tariff Commission said in a recent report.

Imports from ASEAN accounted for $44 million of the $60 million worth of refined sugar imports in the first nine months of 1996 alone, the Department of Trade and Industry reported.

Gamboa said the government is set to go back to the international market after a 10-month ban ending this July 31 due to a projected shortage in domestic harvests for crop year 1997/1998 (Sept-Aug).

The SRA plans to import between 300,000 and 350,000 tons starting this September to be used as buffer stocks for a two- month period.

"I will recommend the importation of sugar to President Ramos at the earliest in September this year as a security reserve," Gamboa said.

Domestic demand for sugar is expected to reach 2.1 million tons for the next crop year.