MANILA, Philippines - The government has finalized the rules for the duty-free importation of 150,000 metric tons (MT) of sugar by private entities meant to curb rising retail prices, agreeing to forego P2.1 billion in tariff revenues as a result.

The Sugar Regulatory Administration (SRA) and the National Food Authority (NFA), which was tasked by the Palace to facilitate the scheme, are just waiting for an executive order authorizing the importation, SRA Administrator Rafael L. Coscolluela said in an interview.

Mr. Coscolluela said the order could be released this week, after which private entities will be invited to participate in a bidding to obtain import rights.

The rights include a "tax expenditure subsidy," meaning importers won’t pay the 38% tariff on imported sugar equivalent to P700 per bag.

Mr. Coscolluela said the 150,000 MT of sugar, totalling to three million bags, would be divided into two batches. The initial tranche of 60,000 MT, open to all importers, is expected to arrive by April 30. The remaining 90,000 MT, which should arrive by June 30, will be allocated to sugar traders who exported roughly the same volume of sugar last year.

After obtaining the rights to import, private importers will look for suppliers on their own, he added. The guidelines also set a cap for industrial users and "all others" so that everyone will be able to participate.

"The instruction of [Agriculture Secretary Arthur T. Yap] is that the bidding of the right to import will be open to all accredited traders and end-users. Industrial users like Pepsi-Cola Products Philippines, Inc. will each be allowed to import only 5,000 MT of sugar," Mr. Coscolluela said.

All others, he said, will only be allowed to import 1,000 MT of sugar each.

Industrial users account for 50% of sugar consumption while 32% are consumed by households. The remaining 18% are consumed by institutional users like bakeries, hotels and restaurants, he said.

Archimedes B. Amarra, executive director of the Philippine Sugar Millers Association, said that while the caps might not be enough to address the needs of industrial and institutional users, the objective is to make the bidding fair and to supplement the current 600,000 MT of sugar inventory. The inventory is expected to be cut by half by the end of the milling season in August.

"Once the 60,000 MT is already imported, the country will have 360,000 MT of sugar as buffer stock which can already last for two months," he said.

Mr. Coscolluela said the 150,000 MT volume was also enough to boost supplies to arrest domestic price increases.

It will also allow the country set aside local production to fill up its export quota to the United States, which industry players expect to go up by another 60,000-75,000 MT on top of this year’s export quota requirement of 137,000 MT.