RECEIVED *
oare; 16 SEP 2013
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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

House Bill No._ 2889

INTRODUCED BY: REPRESENTATIVE PRYDE HENRY A. TEVES

EXPLANATORY NOTE

Republic Act No. 8976, otherwise known as the “Philippine Food Fortification
‘Act of 2000", was signed into law on November 7, 2000. R.A. 8976, provides for, among
other things, the mandatory fortification of certain staple foods with specific nutrients
including refined sugar, with Vitamin A. Pursuant to Section 2, Rule XVI of the
Implementing Rules of Regulations of R.A. 8976, the mandatory fortification of refined
sugar was supposed to commence on November 7, 2004.

Before the implementation of mandatory fortification in November 2004,
representatives from the sugar industry (of PASRI and sugar traders and repackers) met
officials from the Department of Health (DOH), through the officers of the Bureau of
Food and Drugs (now Food and Drugs Administration), to present and convey the
problems and constraints in fortifying refined sugar with Vitamin A. After a series of
consultations between BFAD/DOH and sugar refineries and refined sugar repackers, a
consensus was reached that the mandatory fortification of refined sugar with Vitamin A
is not practical and cannot be effectively implemented. As a result, mandatory food
fortification of refined sugar with Vitamin A was not pursued by BFAD/DOH.

This bill seeks to amend the Act removing refined sugar from the mandatory food
fortification program, in view of the various constraints and problem related to the
fortification of the said product with Vitamin A, to wit:


1. Sugar refiners ~ as manufacturers of refined sugar — are not the owners of a large
portion of raw sugar, which is processed into refined sugar, and of the resulting
refined sugar that it renders mandatory fortification legally non-implementable.

The unique feature of the sugar industry is its “sharing system” under Republic
Act of 1952. Under the sharing system, farmers and sugar mills share or divide between
them and at pre-agreed percentages the resulting raw sugar, among other products, from
the milling of sugarcane. Farmers and mills may sell their respective share of raw sugar
to traders and beverage or confectionary producers who in turn may want to have the raw
sugar further processed into refined sugar to suit their product specifications, In some
cases, farmers and mills themselves have their raw sugar processed to refined sugar to
avail of a more attractive price. In all instances, sugar refineries just impose a tolling fee
for the processing of raw sugar to refined sugar. Sugar refineries, therefore, do not
acquire ownership over the raw sugar and refined sugar.

Since sugar refineries are not the owners of the refined sugar, they cannot just
readily fortify the refined sugar with Vitamin A despite the directive of Section 6(b) of
R.A. 8976. The decision to fortify refined sugar with Vitamin A is an act of ownership
which may be enjoyed and exercised only by their owners, as it will introduce changes in
the characteristic of refined sugar, and sugar refineries which decide to fortify the refined
sugar that they do not own may be held legally accountable by the owners thereof.

2. Fortification of refined sugar entails additional cost to manufacture which would
result in a higher market price of the product. This puts the product beyond the
reach of the target consumers who are at high risk of having Vitamin A deficiency
i.e., women and children in the lower income brackets of the economic strata.

It has been estimated that the cost of fortifying refined sugar with Vitamin A costs
Php 50.00/bag or about one peso per kilo of refined sugar — a cost that will have to be
passed on to the consumers.

A study has shown that the price of refined sugar is a major factor in the
consumer’s decision to reduce consumption or shift to lower-priced washed sugar
(Analysis and Projection of Domestic Demand, Asia Research Organization and the
Center for Food Agri-Business of the University of Asia and the Pacific, February 2009).
Likewise, as assessment of the medium-Term Philippine plan of Action for Nutrition,
2005-2010, has reported that food consumption surveys indicate that only 27.7 percent of
households in the lowest income quintile (poorest) use refined sugar, while 46.4 percent


use brown sugar. Thus, after incurring all that expense to fortify refined sugar, the
nutritional deficiency of that targeted group will still not be addressed.

3. Fortification with Vitamin A hastens the deterioration of refined sugar which
affects the supply stocking programs of refined sugar users,

Under normal or dry conditions, refined sugar has a storage life of up to 24 months
from the date of production before any significant discoloration can be discernable. This
relative longevity of refined sugar is factored in by sugar traders, repackers and industrial
users of refined sugar such as beverage companies and confectionaries in their purchases
of the product. Strategically, they buy and store up refined sugar of raw for tolling into
refined sugar during the height of sugar milling to take advantage of more flexible prices,
which they will use in their respective businesses during the lean and off-milling months
ahead. This sugar stocking mechanism makes their product fairly inexpensive and
therefore attractive to consumers.

However, fortifying refined sugar with Vitamin A speeds up the discoloration
process that about 6-8 months after fortification the white crystals turns yellowish even if
the refined sugar is placed under normal or dry conditions, as reported by Victorias
Milling Company which conducted an initial Vitamin A fortification of some 99
sacks/bags of refined sugar in 1997, as its test run. According to VMC, repackers and
industrial users refused to purchase the fortified refined sugar because of the risk of
discoloration. Because of this, it can readily be assumed that production schedules of
traders, repackers and industrial users will be affected as they cannot and will not store up
on refined sugar fortified with Vitamin A. Consequently, sugar farmers and mills will
have high inventories brought about by weak refined sugar withdrawals.

4. Fortification will lead to a reduction in supply of refined sugar in the market.

The risk of discoloration of fortified refined sugar is perhaps the reason why no
trader, repacker or industrial user has indicated to any sugar refinery the fortification of
his or her refined sugar. With the slow turnover rate of refined sugar in the market and
undetermined conditions or repacking refined sugar at retail outlets in public wet
markets, the fear of discoloration heightens and refined sugar retai] outlets cannot risk
losing their small margins on discoloration. And their expected reaction to the mandatory
fortification of refined sugar shall be reduction in available supply of refined sugar.
Naturally, wholesalers and traders of refined sugar will also reduce their purchases or
tolling of refined sugar available in the market, of worse, the non-registration or recall of



unfortified refined sugar will cause a severe drop in the available supply of refined sugar
in the country.

This deficiency in supply cannot be compensated by imports, as there is no
country producing refined sugar for expert that is fortified with Vitamin A. Even
Thailand, the largest sugar exporter in Asia, is not fortifying its sugar. Therefore, there is
no available source of fortified refined sugar, either here or abroad,

5. Very weak demand for refined sugar with Vitamin A.

The test of Victorias Milling Company (VMC) in 1997 wherein it fortified with
Vitamin A about 99 bags/sacks of refined sugar were not sold, as there seems to be
consumer aversion for fortified refined sugar. Importantly this attitude is not confined to
repackers, industrial and institutional users of refined sugar but includes households that
directly consume the refined sugar. Direct consumers which use refined sugar regularly
and daily prefer unfortified sugar. Expectedly, traders, repackers and industrial users gave
no indication to refineries to fortify their refined sugar with Vitamin A, With a weak and
unenthusiastic market reception for fortified refined sugar, it is impractical to implement
the mandatory fortification of refined sugar. Consumers will not patronize the product.

In the light of the above considerations, the amendment of R.A. 8976 by removing
or excluding refined sugar from the list of products covered by mandatory food
fortification with Vitamin A is earnestly proposed.

yy

PRYDE HENRY A. TEVES


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
SIXTEENTH CONGRESS
First Regular Session

House Bill No,_ 2889

INTRODUCED BY: REPRESENTATIVE PRYDE HENRY A. TEVES

AN ACT TO REMOVE OR EXCLUDE REFINED SUGAR FROM THE LIST OF
PRODUCTS COVERED BY THE MANDATORY FOOD FORTIFICATION
‘WITH VITAMIN A, AMENDING FOR THE PURPOSE REPUBLIC ACT NO.
8976, OTHERWISE KNOWN AS THE “PHILIPPINE FOOD FORTIFICATION
ACT OF 2000”

Be it enacted by the Senate and House of representatives of the Philippines in Congress
assembled:

SECTION 1. Section 3 of republic Act No. 8976, otherwise known as the
“Philippine Food Fortification Act of 2000” is hereby amended to read as follows:

“Section 3. Definition of Terms. — For purpose of this Act, the following terms
shall mean:

(a) xxx.

(b) xxx.

(©) xxx.

(d) xxx.

(e) xxx.

(f) Manufacturer — the refinery in case of [refinery sugar or] cooking oil, the miller in
case of flour or rice, or the importer in case of imported processed foods or food
products or the processor in case of other processed foods or food products.”

SECTION 2. Section 6 of the same Act is hereby amended to read as follows:


“Section 6, Mandatory Food Fortification. ~ (a) the fortification of staple foods
based standards act by the DOH through the BFAD, is hereby made mandatory for the
following:

(1) Rice — with Iron;

(2) Wheat Flour — with vitamin A and Iron;

[(3) Refined Sugar — with vitamin A;]

((4)] (3) Cooking Oil - with Vitamin A; and

[(5)] (4) Other staple foods with nutrients as may later required by the NNC.

(b) The fortification of processed foods or food products under this Section shall
be undertaken by the manufacturers: provided, That in the case of imported processed
foods or food products, the required fortification shall be done by the
producers/manufacturers of such imported processed or food products. Otherwise, the
importer shall have responsibility of fortifying the imported processed food products
before said products are allowed to be distributed or sold to the public: Provided further,
that the implementation of the mandatory fortification for wheat flour, [refined sugar,]
cooking oil, and tice, including those milled and/or distributed by the National Food
Authority shall commence after 4 years from the effectivity of the Act.

(©) xxx.

(d) xxx.

(e) Imported rice, wheat flour, {refined sugar,] cooking oil and other processed
foods or food products that may be identified later by the NNC, shall comply with
the requirements of the Act on entry in country, at the end of manufacturing
process and/or at all points of sale and distribution.

SECTION 3. Section 8 of the same Act is hereby amended to read as follows:

“Section 8, Implementation, monitoring and review — The DOH through the
BEAD shall be the lead agency for the implementation and monitoring of this Act
while the NNC, the policymaking and coordinating body on nutrition, shall serve
as the advisory board on food fortification.

XXX.

‘The local government units through their health officers or agricultural officers or
nutritionist-dieticians or the sanitary inspectors shall assist in monitoring/checking


that foods to be mandated to be fortified like rice, [refined sugar,] wheat flour and
cooking oil are properly fortified and labeled with “nutrition facts” indicating the
specific micronutrient it was fortified with.”

SECTION 4. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations inconsistent herewith, are hereby repealed or modified accordingly.

SECTION 5. Separability Clause. — If any provision of this Act is held invalid or
declared unconstitutional, the other provisions which are affected thereby shall remain
valid and subsisting.

SECTION 6. This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in two (2) newspapers of general circulation,

whichever comes first.

Approved,