Duterte’s coco levy promise: It’s time to ‘force the issue with Congress’

Camille Elemia
Duterte’s coco levy promise: It’s time to ‘force the issue with Congress’
During the campaign, President Duterte vowed to return the coconut levy fund to poor farmers within his first 100 days. Congressmen are getting in the way.

MANILA, Philippines – It was a campaign promise of President Rodrigo Duterte in 2016 – that in his first 100 days, he would return to farmers the multibillion-peso coconut levy fund that was collected from them during the time of dictator Ferdinand Marcos. 

But to date, 3.5 million coconut farmers, among the poorest of the poor in the country, have yet to get a single centavo of what is rightfully theirs. There is still no reliable list of beneficiaries, as farmers’ groups consider the list with the Philippine Coconut Authority (PCA) incomplete.

Duterte’s campaign vow made him stand out among his rivals. He alleged they were “beholden” to former ambassador and Nationalist People’s Coalition chairman Eduardo “Danding” Cojuangco Jr, considered the brains behind the scam. (READ: Danding, coco levy mess rile up Poe, Roxas camps)

In March 2016, Duterte signed a manifesto promising 3 things before coconut farmers in Quezon:

  • The immediate return of the money to the farmers
  • Additional funds to strengthen the industry
  • Support for the recovery of other assets bought with their taxes

“‘Pag ako’y nahalal na presidente, ipagpala ng Diyos, ibabalik ko sa inyo ‘yung coco levy,” Duterte said. (If I become president, God willing, I will return to you the coco levy.)

“I will force the issue with Congress. If there’s a need for a survey or a need for a census kung sinu-sino ang mga taong mabibigyan (of who will be the beneficiaries), we will do it, in the soonest possible time. [You will get back] what is yours and the program for coconut farms,” he added, receiving applause from an audience of around 30 farmers.






CAMPAIGN PROMISE. In front of coconut farmers in Quezon, then presidential candidate Duterte signs a manifesto promising the return of the coco levy fund in his first 100 days in office. File Photo by Pia Ranada/Rappler


The coconut levy or coco levy refers to taxes collected from farmers from 1971 to 1983. They were meant to develop the coconut industry, but in the end was used by Marcos cronies – some of whom are still influential to date – to invest in and buy businesses for their profit. (READ: Coco levy fund scam: Gold for the corrupt, crumbs for the farmers)





 PROOF OF TAXATION. Farmers were given receipts, like this, after being deducted coco levy. They were told to keep them in exchange of a reward later on, which never came. File photo


The issue has spanned 4 decades, with the fund entangled in legal disputes. (READ: The politics of the coco levy: From Marcos to Noynoy Aquino)

But not all is lost. In 2014, after more than 3 decades of uphill battles, the farmers scored victory when the Supreme Court ruled that the coco levy fund, then amounting to P71 billion, belongs to them. It has since increased to P75 billion, equivalent of the 24% shares in Cojuangco’s San Miguel Corporation, which was bought using the farmers’ money.

With the High Court’s decision came the most-awaited consensus among the government, civil society, and private sector: the creation of a trust fund for the development of the farmers and the industry. The SC, however, said an enabling law must first be passed, making Congress the new battleground.

With most members of Congress now allied with Duterte, farmers groups said he should follow through with his campaign promise to “force” or push the issue with them.

Malacañang’s late start

Duterte has included the bill seeking to create a trust fund for farmers in his priority legislation. The measure seeks the creation of a Coconut Farmers and Industry Development Plan, which will be funded by the coco levy funds if the bill passes into law.

The bill also seeks the creation of a trust fund committee, under the Office of the President, to monitor and supervise the fund, the plan’s implementation, and the privatization of some other coco levy assets.

Usually, the executive prepares its own version of its priority bill and transmits it to Congress through its allied lawmakers and senators. But in this case, the executive has no ready draft to date.

The executive only started the ball rolling in February 2017, or 8 months into the administration. It was only then that it created a technical working group (TWG) to thresh out issues involving the proposed bill.

It was also a challenge to assemble the TWG because different agencies wanted to lead it. In the end, the task was assigned to the Office of Cabinet Secretary Leoncio Evasco Jr, being the chair of the poverty and development cluster.

Evasco then assigned former Undersecretary Halmen Valdez, who had been following the issue for the longest time, to lead the TWG. But this was interrupted when Duterte fired Valdez over the issue of rice importation.

Coconut farmers’ groups said the dismissal of Valdez delayed the process. Presidential Legislative Liaison Office (PLLO) Secretary Adelino Sitoy took the helm, but sources said the elderly official was “not as knowledgeable” and “not as quick” as the former.

Eh wala na-stuck. Sinipa ng Pangulo si Halmen Valdez who was on top of it. Totally nakabagal, siya may alam e. Noong hindi na hawak ng Office of the Cabinet Secretary, bumagal na noong pinasa na sa PLLO. That’s factual,” said Joey Faustino, executive director of the Coconut Industry Reform Movement (COIR) and who is part of the TWG.

(The process got stuck. The President sacked Halmen Valdez, who was on top of it. It totally slowed down the process, because she was the knowledgable one. When it was transferred from the Office of the Cabinet Secretary to the PLLO, things slowed down.)

So far, only 4 meetings within the executive have been convened. The agencies involved are the departments of finance, budget, agriculture, and trade and industry, the National Economic and Development Authority, and the PCA, among others. Farmers’ groups, such as COIR, Kilusang Magniniyog (KM), and the Philippine Coconut Producers Federation (Cocofed) are also part of the meetings.

While Faustino lauds the Duterte administration for its support, he said it has yet to thoroughly act to produce tangible results.

“Obviously, he doesn’t understand it at the time during the campaign, how complicated it is. His Cabinet secretaries have been releasing statements pushing for the release of funds, which is good, but I don’t think they have fully understood the complications of the issue then,” Faustino said in a mix of English and Filipino.

Should big farmers have a share?

Another cause of delay is the differences in opinions of legislators, executive agencies, and even farmers’ groups on how best to implement the multibillion trust fund. As Faustino put it, “the devil is in the details.”

At present, there is no doubt that all sides want to use the P75-billion fund. But whether or not it’s for the poor farmers is a different question.

COIR and KM are adamant for a pro-poor farmers version of the bill. Other groups, such as the Cocofed, widely believed to be backed by Cojuangco and his allies, is supposedly pushing for a more favorable version for big farmers and industry players.

There is a push, especially in the House of Representatives filled with landlords and their allies, to benefit big-time industry players and farm operators.

Representatives allied with the Lobregats, Suarezes, Velosso, Villafuertes, and Cojuangcos – all of whom have a stake in the business – sit during panel hearings and discussions.

“The executive is also interested to use the fund for the benefit of the farmers. In the Senate, in the House, there are no obvious efforts to prevent the release of the funds. But whether it will be for the farmers or not, that is questionable when it comes to the House. You have a landlord-dominated House, where they are saying they also paid the coco levy so they should also get part of it,” Faustino said in a mix of Filipino and English. 

Take for example the definition of a coconut farmer. Malacañang and the Senate want to include only those owning a coconut farm “that is not more than 5 hectares,” precisely to exclude big businesses and players from benefitting from the fund.

But the House committee on agriculture and food removed this limit.

“The main object of the coco levy trust fund bill is to help the poor coconut farmers. If you own 100 hectares, 20 hectares, poor ka pa ba (are you still poor)?” former Palace Undersecretary Valdez said.

Farmer Eduardo Mora, lead convenor of KM, said that while the big farmers might have paid coco levy before, the money also went back to them and their businesses. 

“Oo, nagbigay din ang malalaki, pero ang majority ng industriya, workforce ay magniniyog, tenants, and workers. Paano sila makakabayad ng tax noon kung walang nagtatabas, nagkokopra para sa kanila? Sa maliliit talaga nanggaling ang malaking tax,” Mora said.

(Yes, taxes were also deducted from the big companies, but majority of the industry, of the workforce, were farmers, tenants, and workers. How can the big companies get the money to pay the taxes if there were no workers getting the coconust, burning them? The small farmers and workers were really the source of the huge chunk of coco levy.)

“The angle that should not be lost here is social justice. The coconut levy was stolen from the small farmers. If the money were really used to improve the industry, why is it that farmers are still poor?” Faustino said in Filipino.

If big businesses and players are given share in the trust fund, it’s like “repeating” the multibillion scam, he added.

“Direkta dapat makinabang dun ang maliliit, hindi ‘yung malalaki ulit. ‘Pag malalaki ulit nauna, then you will be repeating the whole scam all over again. Ninakaw, binawi, sa kanila pa ulit napunta. ‘Yun ang main fear ng maliliit na magniniyog,” he said.

(The small farmers and workers, not the big ones, should directly benefit from the fund. If the big companies and players benefit from it, then you will be repeating the whole scam all over again. They stole the money, they returned the money, only for them to take it back. That is the main fear of our small farmers.)

Deputy Speaker Representative Sharon Garin, head of the TWG in the House, admitted they had to make a compromise to pass the bill at the committee level.

“It’s difficult, there are differences, not only among congressmen but also among different departments. We tried hard, not everybody’s happy, but it’s the best compromise,” Garin told Rappler.

The House committee also inserted a pro-industry provision that is seen to undermine the role of farmers in the trust fund committee.

Under the Senate version, there will be a 6-5 breakdown of membership in the committee, in favor of coconut farmers. These include 6 representatives from the coconut farmers sector – divided into 2 representatives each for Luzon, Visayas, and Mindanao – and 5 government officials.

In the House version, they added 2 representatives from the coconut industry sector “who have considerable experience and reputable track record.” COIR and KM opposed it, as farmers will lose the majority in the committee.

As a compromise, the House pushed for a 9-5-2 split, with 9 coconut farmers representatives, 5 government officials, and 2 representatives from the industry.

Despite these differences, Faustino and Mora are positive that the Senate version, the more “well-thought out version,” would ultimately win. Duterte’s promised “force,” they said, would seal the deal.

It is uncertain, however, if the current Pangilinan-sponsored bill would still be the Senate version. Senator Francis Pangilinan was ousted as chair of the Senate committee on agriculture and was replaced by administration Senator Cynthia Villar.

Villar earlier told Rappler she would file a substitute bill, but it remains to be seen how it would affect the quality of the measure and the process.

In the last 16th Congress, Villar was also the committee chairperson handling the bill but it did not pass.

Garin is unsure if the measure will be passed during Duterte’s second year, as Congress would be busy with the budget deliberations by then. She, however, is positive that the law would be signed within the President’s term.

Wanted: Duterte’s force, focus

With contradicting views and interests among groups and public officials, only the President could set the record straight and steer the bill’s direction.

Valdez, Faustino, and Mora said Duterte should publicly reiterate his desire for the bill’s passage. After all, there are “high expectations” because he himself promised it.

“It’s really up to the President. Our congressmen, senators have huge respect for the President. If the President wants the coco levy bill to be passed as soon as possible, he can really do it by just really directing both houses of Congress to do it. Hopefully, the President will also reiterate that we use the farmers’ perspective when it comes to drafting the bill. After all, the fund belongs to the farmers,” Valdez said.

In his first year, Duterte has focused on his drug war, hitting back at his critics, and foreign relations with China, among others. They said he has to channel some of his focus on his other promises, including the return of money to farmers.

If he was able to get his way on certain issues, he could very well do it with this most-awaited bill, they said.

“And that’s exactly what we’re asking from him, to force the issue now with Congress during his SONA ((State of the Nation Address) because there is already a pending bill. Push for it,” Faustino said, referring to Duterte’s upcoming SONA on July 24.





FARMERS DYING. With the issue still unresolved after more than 4 decades, some farmers have already died waiting in vain. Eduardo Mora, lead convener of the KM, says the money should be given to farmers immediately. Photo by Camille Elemia/Rappler


After all, the issue has already dragged on for decades, with many coconut farmers, who paid the undue levy, dying without getting the promised rewards.

“It’s not like this issue has only started 5 years ago. This has been going on for how many decades now. When will we get it, when all of us are already dead?” Mora said. – Rappler.com

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Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation issues, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com