Coco levy trust fund passes House

(Congress)06-May-2017 The House committee on agriculture and food has passed a substitute bill which seeks to convert the assets of the coconut levy into a trust fund for the benefit of coconut farmers nationwide.

The committee approved the proposed “An Act Establishing the Coconut Farmers And Industry Development Trust Fund And Providing For Its Management And Utilization.”

Rep. Jose Panganiban, Jr. (Party-list, ANAC-IP), committee chairman and one of the authors of the bill, said the Supreme Court has declared in 2012 that the coconut levy fund is government-owned to be used solely for the benefit of coconut farmers and for the development of coconut industry.

The bill provides that the State shall adopt necessary measures to immediately address the serious problems besetting the coconut industry and protect the socio-economic well-being of coconut farmers, provided that any measure or program undertaken in accordance to the Act shall only be deemed complementary to and shall not be a replacement for existing and potential coconut development programs already conducted by other agencies.

Towards this end, the benefits due to coconut farmers, especially the poor and the marginalized under various statutes shall be consolidated and their delivery expedited.

Among the salient features of the bill are: (1) It establishes the Coconut Farmers and Industry Development Trust Fund; (2) Provides that the Trust Fund be deposited in the Bureau of Treasury; (3) Provides that P10 billion of the initial trust principal to be used within two years from the approval of the “Coconut Farmers and Industry Development Plan” by the President of the Philippines.

The bill also provides for the creation of the Coconut Farmers and Industry Development Trust Fund Committee, under the Office of the President, which shall monitor the implementation of the Coconut Farmers and Industry Development Plan and approve disbursements out of the Trust Fund.

The Coconut Farmers and Industry Development Trust Fund, hereinafter referred to as the Trust Fund, shall consist of the Trust Principal and the Trust Income. No portion of the Trust Fund shall accrue to the general fund of the National Government. It shall be capitalized, managed, utilized and accounted for in the manner provided in this Act.

The Trust Fund shall be used exclusively for the ultimate benefit of coconut farmers and farm workers as embodied in the Coconut Farmers and Industry Development Plan prepared pursuant to Section 21 hereof.

All assets and/or properties derived from all coconut levy recovered assets; and all dividends, interest earnings and incomes that are available upon the effectivity of the Act shall form part of the initial capital of the Trust Fund.

The Trust Fund shall thereafter be augmented with all proceeds of privatization/disposition of the Coconut Levy Assets remitted directly thereto by the PMO in accordance with the Act, including any and all forms of income, interests, earnings, yields, or any monetary benefit derived therefrom prior to the privatization/disposition of these coconut levy assets.

In order to ensure the enduring character of the Trust Fund, the Principal thereof shall be augmented by grants, donations and other lawful transfers by public or private entities.

The bill provides for the naming of nine representatives from the coconut farmers’ organizations (three representatives each from Luzon, Visayas, and Mindanao) as among the members of the Coconut Farmers and Industry Development Trust Fund Committee.

Nothing in the Act shall be understood to prevent or prohibit any person, group or entity from conveying to the Committee other properties and/or additional assets either for the use of the coconut industry, or for purposes of privatization, in which case, the proceeds of such privatization shall form part of the Trust Fund.

Moreover, the bill provides for the creation of an Ad Hoc Committee that shall prepare every 10 years a plan of programs, projects, and activities to be funded from the Trust Fund, and whose members include nine representatives from the coconut farmers’ organizations (three representatives each from Luzon, Visayas, and Mindanao).

It mandates the Presidential Commission on Good Government (PCGG) to undertake a full accounting and inventory of all coconut levy assets; and the Commission on Audit (COA) to audit the inventory of the coconut levy assets prepared by the PCGG.

The bill refers to Coconut Levy Funds as the “various funds generated from levies, taxes, charges, and other fees exacted or imposed pursuant to or in connection with the sale of copra rececada or its equivalent in other coconut products, and collected for the most part from coconut farmers, planters, millers, refiners, processors, exporters, desiccators and other end users of copra rececada or its equivalent in other coconut products.”

These funds shall refer to any and all of the following: (1) The Coconut Investment Fund created under Republic Act No. 6260; (2) The Coconut Consumers Stabilization Fund, later renamed as the Coconut Industry Stabilization Fund, created under Presidential Decree No. 276; (3) The Coconut Industry Development Fund created under Presidential Decree No. 582; (4) The Coconut Industry Investment Fund created pursuant to Presidential Decree No. 1468; and (5) The Coconut Reserve Fund under Presidential Decree No. 1468 and Presidential Decree No. 1842.

During the hearing, Panganiban said according to the Bureau of Treasury, “the total amount of the coconut levy fund is P62.5 billion in cash, deposited in special account in the general fund, which is not earning interest because it cannot be invested, adding that it needs a law in order to be utilized.”

The other amount of P13.09 billion is held in escrow and earning interest, he said.

He also cited the PCGG report which stated that as of 2014, the coconut levy assets amount to around P20 billion.

Panganiban lamented that a coconut levy fund measure was passed by the House of Representatives on third reading during the 16th Congress, but was not approved in the Senate.

Deputy Speaker and AAMBIS-OWA Party-list Rep. Sharon Garin, chairperson of the Technical Working Group (TWG) which further deliberated and consolidated the various coconut levy bills, said that the TWG was guided by the Supreme Court ruling, which declared that the coconut levy fund was to be used exclusively for the alleviation of the coconut farmers and for the development of the coconut industry.

Garin said the funds belong to the coconut farmers, not to the government, and therefore must be utilized for the welfare of the coconut farmers, with the proper guidance from the relevant government agencies.

Minority Leader and Quezon Third District Rep. Danilo Suarez emphasized that safeguards must be put in place for the proper implementation of the programs and projects to be funded by the coconut levy fund.

Suarez suggested that the membership in the proposed Ad Hoc Committee, under Section 21 of the proposed “Coconut Farmers and Industry Development Trust Fund Act,” must be limited in order to expedite deliberation.

Section 21 of the proposed law states “Preparation of the Coconut Farmers and Industry Development Plan. An Ad Hoc Committee is hereby created to be composed of the Secretaries of the Department of Agriculture (DA), Department of Agrarian Reform (DAR), Department of the Interior and Local Government (DILG), Department of Finance (DOF), Department of Public Works and Highways (DPWH), Department of Science and Technology (DOST), Department of Social Welfare and Development (DSWD), Department of Trade and Industry (DTI), National Anti-Poverty Commission (NAPC), National Economic Development Authority (NEDA), Commission on Higher Education (CHED), six representatives from the farmers’ groups and two representatives from the coconut industry sector…”

Suarez said that not all provinces in the country plant coconut and therefore urged the committee to include, as Observers, representatives from the “coconut-planting” provinces in the planned Ad Hoc Committee.

Rep. Luis Raymond Villafuerte (2nd District, Camarines Sur) underscored the urgency of the proposed law, saying the coconut farmers have been waiting for the said measure for 32 years already.

Villafuerte stressed that the coconut-producing provinces or areas must be given priority in the allocation of funds since the coconut levy was derived from the said provinces or areas, adding that it should be stated in the implementing rules and regulations (IRR) to be implemented so it will not be politicized.

He also suggested to remove the “palm oil industry” under Section 3-a of the measure, pointing out that it is an entirely different industry.

The former Camarines Sur governor emphasized that the Supreme Court decision explicitly said that the coconut levy fund must be used solely for the benefit of the coconut farmers and the development of the coconut industry, therefore including the palm oil industry or any other industry as beneficiaries might be questioned in the High Court and could be subject of a temporary restraining order (TRO), which will only delay the implementation of the proposed law.

Villafuerte echoed the suggestion of Suarez to limit the membership in the proposed Ad Hoc Committee under Section 21 of the bill, in order to fast-track the said body’s deliberation and decision-making.

The bill substituted House Bills 62, 102, 164, 301, 557, 2175, 2266, 2749, 2833, 2840, 3523, 4089, 4224, 4286, 4632 and 4803.

Aside from Panganiban and Garin, the other authors of the bill are Reps. Karlo Alexei Nograles, Jonas Jericho Nograles, Angelina Tan, Deogracias Victor “DV” Savellano, Feliciano Belmonte, Jr., John Marvin “Yul Servo” Nieto, Ramon Rocamora, Ariel ‘Ka Ayik’ Casilao, Carlos Isagani Zarate, Vilma Santos-Recto, Lianda Bolilia, Kaka Bag-ao, Gabriel Bordado, Jr., Josephine Ramirez-Sato, Tomas Villarin, Teddy Brawner Baguilat, Jr., Maria Vida Bravo, Enrico Pineda, Michael Romero, Delphine Lee, Orestes Salon, Celso Lobregat, Anthony Bravo, Emmeline Aglipay-Villar, Manuel Jose “Mannix” Dalipe, Emmi De Jesus, Antonio Tinio, Harlin Neil Abayon III, Marlyn Alonte, Arlene Brosas, France Castro, Sarah Jane Elago, Anna Katrina “Trina” Enverga, Carmelo “Jon” Lazatin II, Rodante Marcoleta, Ma. Lourdes Aggabao, Frederick Siao, Bernadette Herrera-Dy, Luis Raymund Villafuerte, Benhur Lopez, Jr., Salvador Belaro, Jr., Alfredo Garbin, Jr., Teodoro “Ted” Montoro, Luis Jose Angel Campos, Jr., Lorna Bautista-Bandigan, Ron Salo, Arlene Arcillas, Carlito Marquez, Mario Vittorio “Marvey” Mariño, Emmanuel Madrona, Aniceto “John” Bertiz III, Mohamad Khalid Dimaporo, Manuel Monsour Del Rosario III, Francisco Jose Matugas II, Gil “Kabarangay” Acosta, Arnulfo Fuentebella and Vincent “Bingbong” Crisologo. / ABR