Aquino signs EOs on utilization of coco levy funds

MANILA, Philippines (3rd UPDATE) – President Benigno Aguino III has signed Executive Order 180, which authorizes the utilization of the P71-billion coconut levy funds to benefit coconut farmers – a promise he made to the sector nearly 4 months ago.

Presidential Assistant for Food Security and Agricultural Modernization Secretary Francis Pangilinan said in a statement that Aquino signed EO 180 on Wednesday, March 18.

“The nation’s coconut farmers are among the poorest. They have been waiting for this for too long. They have fought long and hard for these funds and now, finally, after 40 years, the funds will now be used for the benefit of our coconut farmers,” Pangilinan said in a statement on Thursday, March 19.

EO 180 instructs the following agencies to perform the following: 

• The Office of the Solicitor General (OSG), the Presidential Commission on Good Government (PCGG), and other government agencies under the Department of Justice to use legal means to preserve and recover the government’s entitlements in coco levy assets
• The PCGG, the Bureau of Treasury, the Governance Commission for Government-Owned or -Controlled Corporations (GOCCs), the OSG, and government representatives to sequestered corporations to transfer titles of coco levy assets to the government
• Government agencies controlling or administering coco levy assets must be dissolved with all the money and assets to be transferred or deposited to government coffers
• The Philippine Coconut Authority (PCA), in cooperation with the Office of the Presidential Assistant for Food Security and Agricultural Modernization to develop a coconut industry roadmap and submit it to the President, and issue implementing rules and regulations to ensure the fulfillment of the mandate of EO 180

The order aims to improve coconut farm productivity, develop coconut-based enterprises, and increase the income of coconut farmers through the coco levy fund.

Victory for farmers

There is around P71 billion (US$1.6 billion) in the National Treasury and the United Coconut Planters Bank (UCPB) that the Supreme Court, in 2012, declared must be used to uplift the lives of Filipino coconut farmers, one of the poorest sectors in society according to the National Anti-Poverty Commission (NAPC). 

The P71 billion represents the shares formerly owned by San Miguel Corporation that the Supreme Court declared as rightfully belonging to the government in 2012.

SMC, owned by Aquino’s maternal uncle Eduardo “Danding” Cojuangco Jr, obtained the funds from the Philippine Coconut Authority (PCA).

The government agency used it to compensate Cojuangco after it bought UCPB (formerly First United Bank) stocks from Cojuangco’s uncle, Pedro Cojuangco, in 1975. 

The stocks were bought using funds form the coconut levy paid to the government by Filipino coconut farmers, under the impression that the government would use the funds for programs meant to improve their lives and the industry.

The 2012 Supreme Court decision, after decades of legal battles, declared that the SMC shares are “owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry.”

Palace Communications Secretary Herminio Coloma Jr said that the President also signed Executive Order 179 on the coconut levy fund, which mandates the following: 

• The PCGG to coordinate with other government agencies to identify all known coco levy assets within 60 days from the effectivity of the Order
• 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
• PCGG and other agencies to reconvey and transfer the title of all coco levy assets to the government within 60 days from the effectivity of EO 179
• Agencies must deposit coco levy assets to the Special Account in the General Fund for Coco Levies (Coco Levy SAGF) with the Bureau of Treasury, pursuant to Presidential Decree 1234
• Government agencies to take all the steps to implement the Supreme Court decision on the coco levy fund
• GOCCs in consultation with the Department of Finance, the Office of the Presidential Assistant for Food Security and Agricultural Modernization, and the PCA to determine if privatizing the coco levy assets would serve the best interest of the government

Both EOs are in compliance with the 2012 Supreme Court decision.

Aquino had tasked Pangilinan, who chairs the Philippine Coconut Authority (PCA) Board, to conduct consultations with the coconut farmers to ensure that their inputs are reflected in the EO. 

“We must now ensure no nonsense implementation of programs. The coco levy funds shall be used for their benefit and for the development of the coconut industry. This is not simply a matter of a resolution of a long drawn legal battle as it is an issue of justice for our coconut farmers,” Pangilinan said.

When he met last year with KILUS Magniniyog coconut farmers who marched all the way from Davao City to Malacañang to air their grievances to him, Aquino promised to work on an Executive Order for the mobilization of the funds, while awaiting legislation on the use of the coco levy funds.

In the November 26, 2014 meeting, it was agreed that an EO will be signed after the Supreme Court ordered the entry of judgment for its final decision on the fate of the coconut levy funds made on September 4, 2012. The High Court did so on December 10, 2014. (READ: SC affirms decision to give coco levy funds to farmers)

The farmers had asked for an EO that would create a perpetual trust fund from the P71-billion coco levy funds currently in the National Treasury. – with reports from Natashya Gutierrez and Pia Ranada/Rappler.com