by Eugene Adiong on Tue, 06/13/2017

The proposed excise tax of the Duterte administration may have inflationary effect especially on petroleum and sugar-sweetened products, Senator Joseph Victor Ejercito said yesterday.

“I’m not in favor of increasing that much (tax) especially on petroleum products and sugar. I’m quite certain as I was able to talk to some other senators and I don’t think they will adopt the House version and I find those proposals too high. We might be able to lower the individual tax but prices of goods and commodities might increase”, Ejercito said.

Ejercito was in Silay City as guest of Silay’s 60th Charter Day and Independence Day celebrations.

“But we have to look into this. My worry is if the government would be able to increase revenues based on taxes on beverages using sugar. It might have negative effects, although health issues like renal and diabetes and other top diseases that the Filipinos are exposed to are the basis for the planned excise tax”, he said.

“Some beverage companies may have losses on sales and subsequently cut cost on their operation that may result in the retrenchment of employees as well as for some workers in the sugar industry and in factories. When sales of the beverage companies will be affected, it will definitely affect their operation”, Ejercito said.

He said that he “has apprehensions on imposing those excise taxes because it might have high inflationary effects despite the Department of Finance’s claim that it is negligible.”

Ejercito feels that the proposed Comprehensive Tax Reform Package that includes excise taxes on sugar-sweetened beverages, petroleum products and car sales will bring about rough sailing.

FOR SUGAR INDUSTRY. Ejercito also held a forum with sugar planters and informed them of the two significant laws he authored and passed in Congress that would help the sugar industry, specifically the the Anti- Agricultural Smuggling Act and the Sugarcane Industry Development Act.

“I hope that these two measures could really help the sugar industry in Negros, the hometown of my mother”, he said.

He also promised to support the proposal of Senator Juan Miguel Zubiri to lower the excise tax on sugar sweetened beverages using locally produced sugar, from the House approved P10 per liter.

ZUBIRI. On Friday, Senator Juan Miguel Zubiri promised sugar industry stakeholders to fight for the reduction of the P10-a-liter excise tax on sugar-sweetened drinks.

“I am only one vote in the Senate,” Zubiri, said as he asked sugar industry leaders to lobby for support from the rest of the members of the Senate.

He pointed out the need for the support of Senator Juan Edgardo Angara, who chairs the Senate Committee on Ways and Means and is sympathetic to the sugar industry.

Zubri said he is ready to get the ire of the country’s financial managers. “We have to fight for our farmers,” he said.

The senator is pushing for the reduction of the P10-a-liter excise tax to P5, and for the retention of the House of Representatives–approved P20 excise tax per liter for sweetened-beverages using High Fructose Corn Syrup (HFCS) and other imported sweeteners.

Earlier, Rep. Alfredo Abelardo Benitez of Negros Occ.’s 3rd district, said the Visayan bloc failed to reduce the excise tax on sugar-sweetened drinks from P10 per liter to P5, but they were able to double the amount on imported sweeteners.

Zubiri pointed out that the tax on sugar sweetened drinks, which includes softdrinks and three-in-one coffee “needs to be reduced to prevent a drop in their sales that would gravely affect the Philippine sugar industry, of which Negros Occidental is the largest producer.”

HFCS. The solon said that the Senate inquiry on industry complaints against beverage firms’ large purchases of HFCS that was driving down the prices of domestically-produced sugar led to Coca-Cola’s withdrawing its case that sought to stop the implementation of Sugar Order No. 3 that authorized the Sugar Regulatory Administration to regulate the entry of imported HFCS and to commit to buying more domestic sugar, he said.

He said that the Senate Committee on Agriculture’s unanimous report on the inquiry will state that it supports SO3, the importation of HFCS and other sugar substitutes should be highly regulated, and the DA should protect the country’s farmers.

“HFCS is a health issue, that is why other nations discourage its use through high taxes, and it is not just an issue of protectionism for Filipino farmers.,” Zubiri said.

Coca-Cola has signified its intention to buy 2 million bags of sugar this crop year and 2.3 bags million more next crop year, he added.

Lawyer Emilio Yulo III, spokesperson of the Sugar Alliance of the Philippines said informal talks are ongoing with different firms on an increase in their purchase of domestic sugar.

Earlier, Sugar Regulatory Administrator Anna Rosario Paner said a sugar production overhang of 400,000MT is expected this crop year.

If the companies buy a sufficient volume of Philippine sugar it will reduce the overhang to only the buffer stock needed by the country, and ensure better domestic prices next crop year, Yulo said.*(Eugene Y.Adiong)