BACOLOD CITY – Millgate prices of sugar averaged at P1,480 per 50-kilo bag last September 15.
“That is good enough,” Frank Carbon, who heads the Metro Bacolod Chamber of Commerce and Industry, said when asked if the sluggishness of the local economy is rooted in low sugar prices at the start of the milling season.
Carbon agrees that the sugar industry is still the main driver of the local economy but pointed out that there are still other factors that contribute to the sluggishness.
The two main global factors, he said, are the US-China economic standoff and the Brexit movement in the United Kingdom.
The US-Sino standoff that started during the Trump administration has already affected various industries in both countries including electronics and agriculture.
The Brexit move, on the other hand, is the exit of United Kingdom from the European Union, considered the most powerful bloc in the world.
“These two have economic implications in the Philippines for these affect investor confidence,” Carbon said.
The Duterte administration is perceived to have pivoted to China after President Duterte confronted the US on a variety of issues despite the fact that the US is the third largest trading partner of the country and long a source of foreign aid and defense materiel.
But if these factors affect confidence, how is it related to low consumer spending?
“They feel the lack of confidence,” Carbon said, referring to consumers though he clarified that there is no inertia in spending but a “shiftt to spending for basics.”
What this means is that people are spending more for food and other basic needs as the Yuletide season arrives.
In Bago City, Rics Tajanlangit blames the Rice Tarrification Law for the plunge in palay prices that, he said, has affected the spending power of rice farmers.
“It is still tigmarais for us,” he said, as he bewailed low farmgate prices that reach as low as P13 per kilo of basa or wet palay, especially the tig-a or hard variety.
Delfin Dinsay, in Kabankalan City, has diversified to other businesses aside from planting sugarcane.
He says that while he is not involved in sugar production anymore, his businesses are also affected by the sluggish economy.
“Sugar is still the core of the economy, we are still tied to it,” he said.
Dinsay said the September 15 average prices of sugar does not bode well for cane planters.
He said a millgate price of P1,500 is ideal given the rising costs of production like labor and fertilizers that have gone up from 20 to 30 percent.
Labor costs, he said, for the harvest has risen aside from the fact that there is a low supply of tapaseros or cane cutters. Even the sacadas or seasonal workers from Panay have become expensive.
Dinsay thinks the economic convulsions because of the sneezing or the woes brought by last year’s sugar harvest when prices were low.
“The industry has not yet recovered,” Dinsay said.
As a local adage goes: kon mangatsi ang industriya sang kalamay, ginakulebra ang ekonomiya (when sugar industry sneezes, the economy suffers convulsions).”