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Bacolod City, Philippines Saturday, September 29, 2012
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WV senators to back
sugar act – Miriam

BY CARLA GOMEZ

Senator Miriam Defensor Santiago yesterday said the Western Visayas senators will join forces in pushing for the passage of the Senate’s version of House Bill 6113 or the Sugarcane Industry Development Act of 2012.

Defensor, who is from Iloilo City, was one of the speakers at the Banco de Oro organized economic briefing: “Philippines, where are we going? The Sugar Industry: Challenge and Opportunities”, at L’Fisher Hotel in Bacolod City.

Other speakers were Sugar Regulatory Administration chief Ma. Regina Bautista Martin and Jonathan Ravelas, BDO 1stvice president.

Martin, in her speech, called for support for the proposed Sugarcane Act, which she said will help finance the much needed diversification of the sugarcane industry before 2015 when tariffs on imported sugar will drop to five percent from the current 28 percent.

The Sugarcane Act is authored by Rep. Alfredo Abelardo Benitez (Neg. Occ., 3rd District) in the House.

The bill is geared towards revitalizing and strengthening the sugarcane industry through diversification, development and financing programs to cushion, if not counter, the possible destabilization effects of the tariff lifting on imported sugar, Benitez had said earlier.

House Bill 6113 aims to establish a Sugarcane Industry Development Fund to be collected from the proceeds of 15 percent of the Value Added Tax on the sale and importation of refined sugar and sugarcane by-products and the total tariff collected on the importation of raw, refined and premix sugar.

In her speech, Martin said now is a critical time for the Philippine sugarcane industry that needs not only to produce sugar but to diversify into the production of energy and ethanol in order to remain profitable beyond 2015.

The sugarcane industry currently contributes P70 billion annually to the Philippine economy, she said.

She said 75 percent of the sugarcane farmers till less than five hectares of land with only two percent tilling 50 to 100 hectares, and one percent with more than 100 hectares.

“Gone are the days of the hacienderos with the Comprehensive Agrarian Reform Program,” Martin said.

But small sugarcane producers need to go into block farming to ensure profitability, which the SRA and the Department of Agrarian Reform are jointly working on, she said.

The Philippines, aside from selling its sugar to the United States in recent years, has resumed exporting to the other countries putting itself back into the global sugarcane map, she said.

Martin said sugar mills are also gearing up to become competitive.

At present, the Philippines has four mills producing about 133 million liters of ethanol annually, about 80 percent short of the 486 million liters needed to fill its 10 percent mandated blend with gasoline fuel sold in the country annually, she said.

The 10 percent mandated ethanol blend with all gasoline fuel distributed and sold by every oil company in the country began last year.

The Biofuels Law of 2006 calls for blending ethanol as additive to gasoline to reduce the country's dependence on imported fuels.

We need 13 more ethanol plants, each producing 30 million liters, to fill the 10 percent mandate, Martin said.

The Philippines is the only country with an ethanol blending mandate, making it the biggest importer of biofuels because of a shortfall in local production, she said.

Martin also stressed the need for all sugar mills to be retrofitted with high pressure boilers, so they can produce 600 megawatts of clean energy, 400 megawatts of which can be sold to the power grids with the rest used for their operations.

The push towards diversifying into ethanol and power production will be achieved through public private partnerships, Martin said.

Meanwhile, Santiago told the DAILY STAR that it will be a question of funding to hasten the diversification of the sugarcane industry.

“We should not borrow anymore from abroad and instead, avail of the offer of Central Bank to lend money to government. Domestic banking should drive the rehabilitation of the sugar industry,” she said.

She said the Philippines economic growth will continue if the country continues to enjoy its current political stability.

“It’s the global economy that we are worried about,” she added.

Santiago said that Western Visayas should concentrate on agriculture and food production.

Ravelas also painted an optimistic picture of the Philippine economy, which growth has been driven by private sector and government spending, he said.

The Philippine is in a better shape than other economies, he said, but stressed the need for the country to produce cheaper power.*CPG

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