Sugar as a Biofuel: Implications for Philippine Agriculture and Food Security

This paper examines the economic impacts of using sugar as feedstock for biofuels on agriculture and food security in the Philippines. In particular, it focuses on the impacts on prices, outputs, consumption and trade of industries in the agricultural and food processing sectors. The tool used in the study is computable general equilibrium model of the Philippines. The analysis was implemented by replacing inputs with crude petroleum with bioethanol, which is sourced from the sugar industry, in the petroleum refining industry. The study found that the initiative raises the output of the 'Agriculture, Fishery and Forestry sector'. However, this is driven mostly by the expansion of the output of the sugar industry, with a large proportion of the industries in the sector experiencing a contraction in output. The analysis also shows that promoting sugar as a biofuel feedstock can have adverse effects on food security. This conclusion is drawn mainly from the projected decline in the consumption of products from the agricultural and food processing sectors.