Stop sugar rent seekers – Salceda

According to the economist -lawmaker, sugar prices in the country have always been three to five times above those of world market prices.

File photo

September 11, 2022

Albay Representative Joey Sarte Salceda yesterday pressed the Sugar Regulatory Administration to issue “clear and coherent” rules on sugar importation volumes and allocations.

Salceda made the call amid the report for a potential need for at least 400,000 metric tons of sugar imports this year through 2023.

According to the economist -lawmaker, sugar prices in the country have always been three to five times above those of world market prices.

The regulations on how much to import and who can import must be clear until the nation can sustain its own local demand, he explained.

He warned that the lack of transparent rules, especially in an auction, could allow corruption in granting import permits.

When public resources are scarce, Salceda stressed that the best way to manage them is often through auctions.

“It should not be the decision of one government agency. Who gets to import at 20 pesos or less and sell at 120 pesos at retail is a unique privilege,” Salceda said.

“It’s rent, basically. And it’s great power — and potentially a great source of corruption — if we do not harmonize the way these clearances are granted,” he added, the chair of the House Ways and Means Committee.

In economics, rent-seeking refers to entities that seek to gain added wealth “without any reciprocal contribution of productivity.”

“We need rules now, so that the brouhaha over Sugar Order No. 4, as well as how Sugar Order No. 3 was allocated, does not happen again,” Salceda said.

“We now know what problems can arise when the rules are unclear. It’s time to define how the import volume is to be determined, and who gets to import what and how much,” he added.

The lawmaker made the statement following the SRA’s pre-milling season estimate that the country will produce only 1.876 million metric tons of sugar this year, around 400MT short of the usual minimum 2.2 million MT demand.


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