President Benigno Aquino 3rd has signed two executive orders (EO) detailing how coconut farmers will benefit from the P72 billion-coconut levy collected from them 40 years ago.
The coco levy was collected from farmers during the administration of President Ferdinand Marcos. But instead of using the money to improve the plight of farmers and the coconut industry, it was used to buy the United Coconut Planters bank (UCPB) and majority stakes in the San Miguel Corp. (SMC).
On March 18, 2015, Aquino signed EO 179 and EO 180 which mandate that “all coco levy funds and coco levy assets conveyed to the government, whether voluntarily or through lawful order from a competent court, and all proceeds of any privatization of the coco levy assets, shall be used solely and exclusively for the benefit of all the coconut farmers and for the development of the coconut industry.”
The new orders set the administrative guidelines for the inventory and privatization of coco levy assets.
The Supreme Court in 2012 ruled that 24 percent of SMC shares was bought with coco levy funds. It awarded the block to the government with the condition that it should be used only for the benefit of the coconut farmers and the industry.
Aquino instructed the Presidential Commission on Good Government (PCGG) to coordinate with other government agencies in identifying all coco levy assets within 60 days. The President wants the PCGG, with the assistance of the Office of the Solicitor General, to submit a certified report to the Bureau of Treasury, Commission on Audit, and the Office of the President, identifying and accounting all coco levy assets.
These include sequestered assets; corporations acquired through the use of levy money; shares of stocks of corporations; money, assets and investments of the Coconut Industry Investment Fund (CIIF) managed by the United Coconut Planters Bank (USPB); and money, assets and investments managed by CIIF companies and CIIF holding companies.
The PCGG and other agencies were also directed to reconvey and transfer the title of all coco levy assets to the government within 60 days from the effectivity of EO 179.
All money and funds constituting the coco levy or accruing from the coco levy assets must be deposited to the Special Account in the General Fund for Coco Levies (Coco Levy SAGF) with the Bureau of Treasury, pursuant to Presidential Decree 1234.
The Commission for government-owned or -controlled corporations (GOCCs), in consultation with the Department of Finance, the Office of the Presidential Assistant for Food Security and Agricultural Modernization, and the Philippine Coconut Authority, shall determine if privatizing the coco levy assets will serve the best interest of the government.
These agencies are mandated to provide the president recommendations on the possible privatization and the mode of divestment.
Once the privatization pushes through, all the proceeds must go to the Coco Levy SAGF after deducting reasonable expenses incurred during the process of privatizing the assets.