The once-growing Philippine sugar industry was what every Filipino thought would flourish. But this dream turned into a nightmare when the Philippine-American war erupted from 1899 to 1901, devastating the sector. None of the regions in Luzon, Visayas, or Mindanao, was able to keep trading and production afloat as the war affected overall production and trading levels during the Spanish occupation.
Although peace and order followed shortly in 1902, the nation took about 11 more years to restore the sugar trade to its once thriving state. At that time, it was the Americans’ turn to work on the Philippine sugar industry.
The Beginning of the American Takeover
The Philippines and America had already started sugar trading before the war, but that was only up to 200,000 tons annually. Following the peace consensus, these economic activities increased, making the U.S. the nation’s primary export market.
Specifically, the improvements started with discounting duties to 75% in 1902. Seven years later, sugar admission of up to 300,000 tons became duty-free courtesy of free trade agreements under the Payne-Aldrich Tariff Act.
In 1913, the Underwood-Simmons Tariff Law omitted the limitations on duty-free sugar imports. This agreement sparked export spikes of up to 1,565,405 tons from 1933 to 1934 but later decreased to 980,000 tons in consideration of domestic consumption and U.S. restrictive programs.
With the 90,000 domestic consumption quotas, these export numbers were implemented until World War II.
The Rehabilitation After World War II
It was not the rehabilitation the Philippines had expected after the global conflict as only 25 out of the 47 mills were recovered. Several attempts to increase primary export quotas surfaced after the war, but it was only in 1960 that the country earned these incentives.
The 1965 Sugar Act amendments provided an aggregate export quota of 1,126,000 short tons for the Philippines and an allotment of approximately 200,000 deficits, maintaining reserves equivalent to 15% of U.S. quotas and premium recapture fees and quarterly allocations.
While the country enjoyed dominance and competence in the global market, it faced another obstruction in 1977: oversupply.
The Introduction of PHILSUCOM
In 1977, then President Ferdinand Marcos ordered the Philippine Sugar Commission (PHILSUCOM) to regulate and oversee activities concerning the country’s sugar industry. In the same year, the National Sugar Trading Corporation (NATSURA) became the Philippines’ trading agency.
A year later in May, the Republic Planters Bank became the industry’s primary source of financing.
With the help of these sectors, the Philippines has overcome congestion through shipments to the U.S.S.R., China, Japan, South Korea, Malaysia and other countries. PHILSUCOM’s work did not only end there, as it also established pricing policies to dampen fluctuating sugar prices.
While these regulations aimed to keep earnings from exports flowing, many sugar planters dealt with adverse effects instead.
Free Trading
Following the realization of the downturn in world market prices, limitations on the export quotas and sugar displacement, Presidential Decree No. 1905 was passed to put sugar trading into free enterprise.
This movement, however, did not immediately take effect as producers moved for its postponement under Presidential Decree 1918.
The creation of SRA
In 1985, the Philippine Sugar Commission, through the order of former President Marcos, converted NATSURA into the Philippine Sugar Marketing Corporation (PHILSUMA), a private corporation. The rationalization of the sugar industry under this setup did not last long, as a historical political revolution took place in February 1986.
On May 28, 1986, former President Corazon Aquino created the Sugar Regulatory Administration (SRA) through Executive Order No. 18. The office aims to organize sugarcane production, stabilize prices, enhance marketing and merchandising in local and international markets and undertake research and development necessary to pursue the objectives of the executive order.
Since 2007, the SRA became a Government-Owned and Controlled Corporation (GOCC) attached to the Department of Agriculture.
The SRA continues to uplift the goals of the sugar industry, as well as the aspirations of millers and planters despite changes and circumstances.
