Pangilinan firm on coco levy EO’s legality

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FOOD Security Secretary Francis Pangilinan on Tuesday stood firm on the legality of the twin executive orders on the P71-billion coco levy fund, saying that the provisions of presidential orders on the use of the fund were in accordance with the Supreme Court’s ruling.

“We maintain that the executive orders are constitutional. They were issued consistent with the ruling of the Supreme Court and to ensure that the coco levy funds will be safeguarded,” Pangilinan said in a text message to The Manila Times.

President Benigno Aquino 3rd signed the two executive orders last March. Executive Order 179 calls for the inventory and privatisation of the fund while Executive Order 180 grants the utilization of the fund for the benefit of coconut farmers.

Pangilinan, the presidential assistant on food security and agricultural modernization, stressed that P71-billion fund will only be utilized pursuant to a program for the benefit of our coconut farmers and the development of the coconut industry.


Pangilinan was directed by the President to conduct continuous consultations with coconut farmers to ensure that their interests and concerns are considered as the core of the implementing guidelines of the EO is being laid out.

Pangilinan’s office, including the Philippine Coconut Authority where he sits as chairman, crafted a roadmap for the utilization of coco levy funds. This is geared towards the empowerment of the coconut farmers, coconut farmers’ organizations and community enterprises through value-adding and diversification of coconut products such as coco coir, virgin coconut oil, coco milk, coco peat and coco water.

“Also it is aimed at increasing farm productivity and farmers’ income for inclusive growth of a sustainable coconut industry,” said Pangilinan, stressing that it is a major milestone marking the end of a 40-year struggle for the coco levy.

Coconut farmers’ groups, however, said that the two presidential orders were unconstitutional and should be struck down by the Supreme Court.

Last week, the Confederation of Coconut Farmers Organizations of the Philippines (CCFOP), the biggest organization of coconut farmers in the country, filed a petition with the SC to restrain the government from implementing the orders.

According to Charlie Avila, executive director and spokesperson of the CCFOP, the twin executive orders – “the inventory and privatization” (E.O. 179) and “the reconveyance and utilization” (E.O. 180) of coco levy assets – can only lead to a much worse coco-economy of exclusion and would cause new plunder of the coco levy funds.

“The Aquino government has no regard for the moral nature of the ownership of the coco levy assets,” said Avila.

Avila stressed that the SC decision of January 24, 2012 succinctly affirmed the moral view that these funds/assets are “owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry; that therefore the beneficial and true owners of the coco levy funds are clearly all coconut farmers.”

“Even as their trust owner is the government, and their purpose is not general in nature as to include mere money making from privatization as the EOs would rush to do but, rather, quite particular, namely, the development of the coconut industry,” he said.

The group agreed on the conduct of an inventory of all coco-levy funded assets and investments, but stressed that “it is wrong for the EOs to make a mockery of what the Court has just declared public trust funds by rushing to privatize them.”

“Since when did government have the right to include trust assets in its privatization program? The privatization hang-up of government via its EO 179 is a complete abandonment of its duties as trustee of the coco levy assets and is indubitably contrary to the Supreme Court ruling and the moral philosophy of trust ownership,” said Avila.

According to Avila, the least that the trustee government can do to be ethical and legal would be to consult its Trustors, the true beneficial owners who are all the coconut farmers.

“Government cannot legally privatize trust assets without the consent of the Trustors. The Aquino government has this bad habit of making short shrift of constitutional provisions and legal niceties. The coconut farmers of this country must not allow him to do so in the case of the coco levy trust funds,” he said.

The farmer’s grpi[ leader also questioned Aquino’s EO, saying that president cannot just arrogate unto himself, without legislative authority, the power to allocate, use and administer the billions of pesos of coconut funds and assets.

He also said that President cannot arrogate unto himself the exclusive authority of the Judiciary to execute its final and executory decisions as this would violate the principle of separation of powers, essential to a democracy.

Avila also cited the case filed by PKSMNN against two executive orders (Nos. 312 and 313) signed by then President Estrada on the utilization of the coco levy funds.

The two EOs were nullified by the Supreme Court because they violated the Philippine Constitution, by deviating from the special purpose of the coco levy funds. In the PKSMNN case, the Supreme Court said that an EO cannot be above a Presidential Decree or a Republic Act.

According to Avila, there are only two ways to solve the issue of the coco levy funds – the right way or the wrong way.

“The wrong way is for government to allow or encourage sectors and agencies not even connected with the coconut industry to start posturing to get their hands on the coconut levy funds, which the EO’s do. The right way is to constitute the coconut levy funds and assets more explicitly into a Coconut Industry Trust Fund (CITF), by law, and provide the administrative structure, also by law, that will manage the trust funds and ensure that its use will benefit the coconut industry and the coconut farmers, which the two chambers of Congress are trying to do,” he said.

“The two chambers of Congress are doing this right now as is their right and duty but the President would pre-empt them with these assailed EOs for how many billions of reasons and for what urgent purposes only his ruling party knows – although the farmers have their 2016 suspicions,” he said.

Meanwhile, Agriculture Secretary Proceso Alcala said that the government is now expediting the passage of a bill that will have a more permanent effect to marginalize coconut farmers in the country.

Alcala said that they are now work with the Senate Agriculture and Committee, headed by Senator Cynthia Villar, for the crafting of a law that would ensure proper disposal of the controversial coco levy fund.

“The law will ensure that the coco levy fund will directly benefit the 3.5 million strong coconut farmers. We want to be sure with utilization of the funds,” Alcala said.

Under the proposed bill, the DA chief said that the coco levy money would be used as a perpetual trust fund that will finance the long-term development of the industry.

Alcala said that various programs were already in the pipeline, including the creation of a credit program to be used as working capital for business involving the production of copra and other bi-products and self-liquidating projects; educational scholarships for farmers kin; research and development; and insurance and health maintenance coverage.
“Kung ano ang gusto ng mga magsasaka, iyon po ang isinama naming sa pagbuo ng batas,” he added.

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2 Comments

  1. There was a long-term coconut development project where the first phase was funded by WB (SCFDP). Even at its first phase of implementaion, the lack of Government conterpart funding has been the problem. This project was envisioned to address the major problems in the coconut industry, from develoment of seed gardens and nurseries to sustain llong term replaning program to rehab of low yielding palms, compra quality improvement, including the institutional strengthening of the PCA and intercropping to increase income of the coconut farmers.Surely, every component of that project involves and was aimed towards addressing the plight of the coconut farmers . Obviously, this was studied and strongly recommended by the NEDA as sustainability was not a problem because it considered the recovery of the coco levy among others. All this administration (by the way, the loan was signed during the term of Cory) has to do is to at least implement those program components or at the very most improve them.

  2. Amnata Pundit on

    You can see the scam coming a mile away. I will bet they are going to sell this at a fraction of its value because these shares are preferred shares in SMC with no voting rights and will therefore be hard to sell. Then the usual suspects in the Lapiang Palpak (LP) will pocket the proceeds by hiding behind “contracts to improve the coconut industry for the benefit of the farmers.” It will be no different from the $600Million of proceeds from Marcos’ “hidden wealth” that they acquired through that SUMMARY Judgment against the former president during the time of GMA that disappeared without a trace and for which up to now GMA has not accounted for.