Philippine sugar millers seek rethink of proposed beverage tax rise

The Philippine Sugar Millers Association (PSMA) has asked the Department of Finance to reconsider a proposed increase in taxes on sugar-sweetened beverages, warning that it could weaken demand while producers contend with falling output.

Under the department’s ProGRESS Bill, the excise tax would rise from ₱6 per litre to ₱20 per litre. The measure is intended to offset proposed tax relief for middle-income earners and small businesses.

PSMA said growers and millers were facing higher production costs and weak demand, alongside reduced cane tonnage and sugar output linked to El Niño and infestations of the red-striped soft scale insect.

The association’s executive director, Jesus Barrera, said the proposal conflicted with government efforts to encourage sugarcane cultivation. He pointed to emergency assistance recently extended to farmers recovering from severe infestations and said a tax increase could undermine demand for their crop.

Barrera also warned that poor sugar farmers, including thousands of agrarian reform beneficiaries, could face indirect costs without benefiting from the proposed income-tax relief.

According to PSMA, a substantial tax increase could prompt beverage manufacturers to cut output, charge consumers more or use less sugar. The group said weaker beverage sales could reduce manufacturers’ sugar purchases, putting further pressure on farmgate prices.