Filipinos consume enormous amounts of sugar; everything must be sweetened. A little sugar does add to the enjoyment of what you eat and drink, but too much of it is lethal.
When the excise tax on sugary drinks was being considered in Congress, I argued that soft drinks weren’t the only culprit. Anything that contained high levels of sugar was. So, the sensible thing to do was to tax sugar, not just drinks, and certainly not water. But that, in effect, was what the law did. It not only restricted the tax to soft drinks, it applied the tax to per liter of liquid, regardless of how much sugar was in that liquid — 5 percent, 20 percent, same tax. Perhaps someone can explain the logic of that one to me.
The original Senate version was to tax the product based on the amount of sugar. This was the direction of the tax, until government officials said they didn’t have the capacity to measure the amount of sugar and it would take two years to build that capability. A little fire under their bottoms may have sped them up.
I further argued that if that was a problem, there was an easy solution — tax sugar at source. But this was completely ignored.
Too much sugar increases the chances of diabetes (which more than 6 million Filipinos have), heart disease and obesity. Yet we coddle the sugar industry. Politicians allow sugar producers to influence the direction the law will take. That results in Philippine sugar being twice as expensive as the imported kind, which would be good except that the higher cost goes into protecting inefficient sugar producers, and not into government revenues where it could do some good for all of us, like how higher sin taxes did.
Worse, it seems the government has not only failed to recognize the deleterious effects of sugar on the human body, it has also encouraged that ill effect on our body. It has allowed the import of products containing high levels of the cheaper sugar that foreign producers can get at much lower prices than local producers.
Take three-in-one coffee, which is hugely popular with Filipinos. In the past three years, with no protective tariff for local producers, imports have grown from 95,000 tons annually to 195,000 tons. Sales of domestic producers have fallen by that equivalent amount, putting their businesses at risk for the wrong reason—unfair competition.
Imports of three-in-one coffee have been allowed in duty-free. While imports of raw sugar are applied an import duty, the amount that can be imported is strictly limited by the Sugar Regulatory Agency (SRA). Thus, local companies can’t buy sugar at the same price as overseas competitors, yet have to compete for the domestic market. This has been discouraging, instead of encouraging, local production, which is a major aim of the Department of Trade and Industry. Local companies can’t compete and eventually will end up out of business if this continues.
There’s been pressure to allow duty-free sugar imports, too, but that should be resisted. What should be done if we care about Filipino health is to retain that duty rate, or even higher on sugar, and apply it to imported products with high levels of sugar as well. That would level the playing field while helping keep Filipinos healthy.
There are a lot of imported food products other than three-in-one coffee that come in containing a lot of sugar but that don’t pay a sugar duty, like confectionery products and powdered juices. The SRA should coordinate closely with the Bureau of Customs in seeing to it that importers of these products pay the duty based on the sugar content. So, let’s apply a higher duty on imported sugar and on packaged products that contain high levels of sugar, at a price that hopefully discourages too much sugar consumption.
Normally, an open market is what we want, but not where health is concerned. I’m all for barriers that raise the price of sugar-heavy products. (Mind you, I’m biased, I drink coffee with no sugar or milk. I want to enjoy the coffee as coffee. Try it, you’ll get to like it).
So an import duty on anything with sugar in it, I’d support. I’d even impose an excise tax on all sugar and sugar products regardless of source. Let’s have healthier Filipinos.
E-mail: wallace_likeitis@wbf.ph