coco levy fund

Senate passes new coco levy bill creating trust fund for coconut farmers

JC Gotinga
Senate passes new coco levy bill creating trust fund for coconut farmers

To Go With Philippines-weather-storm-poverty,FEATURE by Cecil Morella This photo taken on December 10, 2014, a coconut farmer preparing coconuts to be made of copra, at a coconut farm just next to the seashore in Hernani town, Eastern Samar province, central Philippines. Life is a constant throw of the dice for farmer Nilo Dilao and other residents of the Philippine island of Samar, the gateway for many of East Asia's deadliest storms. AFP PHOTO/TED ALJIBE (Photo by TED ALJIBE / AFP)


Senators Francis Pangilinan and Risa Hontiveros vote 'yes with reservations,' as the bill excludes farmer representatives from the trust fund management committee

The Senate on Monday, October 5, passed on 3rd and final reading a bill to create a trust fund from proceeds from the planned sale of assets of the Marcos-era coconut levy fund.

The proposed measure is aimed at letting poor coconut farmers benefit from taxes exacted from them decades ago, now worth around P76 billion in assets.

Under Senate Bill No. 1396 or the Coconut Farmers and Industry Trust Fund Act, the government is mandated to sell these assets over the next 5 years to shore up a trust fund for the farmers.

The 22 senators present in Monday’s plenary session voted unanimously in favor of the bill. Senator Leila de Lima was unable to vote, as she remains in detention at Camp Crame in Quezon City.

The bill establishes a trust fund management committee consisting of representatives from the Department of Finance, Department of Budget and Management, and Department of Justice.

This committee will set the investment strategy of the trust fund, including the management of the estimated P76 billion in cash, the disposition of about P30 billion in other assets, and possibly further funds or assets still pending before courts.

The bill reconstitutes the Philippine Coconut Authority (PCA) Board to be composed of the secretary of agriculture as chairperson, the secretary of finance as vice chairperson, the secretaries of budget and management, science and technology, and trade and industry, the PCA administrator, and 3 small farmers’ representatives – one each from Luzon, the Visayas, and Mindanao.

Senator Cynthia Villar, the bill’s principal sponsor and author, said the proposed measure would benefit around 3.5 million coconut farmers from 68 coconut-producing provinces, who own not more than 5 hectares of farmland.

“The coconut farmers are the poorest in the country. They earn only about P1,500 a month. This fund, which rightfully belongs to the coconut farmers, should be plowed back to them for their own direct benefit,” Villar said in a statement.

‘Yes with reservations’

“Pagkatapos ng mahabang panahon, mabibigay na rin sa mga magniniyog ang para sa kanila. Kahit na hindi naisama ang ilang mga probisyon sa aming panukala sa final version, at pakiramdam ko ay watered-down ang ilang mga probisyon na naipasa, mas maigi nang mayroon kaysa wala, para mabigyan na ng suporta ang mga magniniyog,” said Senator Francis Pangilinan, the bill’s principal author.

(After a long time, what is due coconut farmers will finally be given them. Even though some of our proposals were not included in the final version, and I feel that some of the passed provisions were watered-down, something is still better than nothing, so that coconut farmers can already be given support.)

Pangilinan and his fellow opposition senators Risa Hontiveros and Franklin Drilon had pushed to include a farmer representative and an official of the Department of Agriculture in the trust fund management committee, but the rest of the senators voted against it.

Pangilinan voted “yes with reservations” to the bill. Noting coconut farmers’ “urgent need” for immediate support, he said the Senate minority may just push for amendments to the coco levy bill later on – if President Rodrigo Duterte does sign it into law.

“We respect the decision of the body, but we strongly believe that our coconut farmers should be involved in all aspects of the decision-making process in the management of the coconut levy funds. It is, after all, their money – the blood, sweat, and tears of our coconut farmers,” Pangilinan said in a statement.

Hontiveros lamented that the number of farmer representatives to the PCA Board was slashed to just 3, while no farmer representative is included in the trust fund management committee. She also voted “yes with reservations.”

Other provisions

Other provisions of the Coconut Farmers and Industry Trust Fund Act include:

  • “Coconut farmers” are defined as owners or leaseholders of coconut farms not larger than 5 hectares, tenants who till or supervise the cultivation of coconut farms, and farmworkers or laborers.
  • A Coconut Farmers and Industry Development Plan will be drafted to set the directions and policies for the development and rehabilitation of the coconut industry in the next 50 years.
  • At least P5 billion from the trust fund shall be disbursed yearly for programs to improve the coconut industry, and for scholarship and health programs for coconut farmers and their families.
  • The Bureau of the Treasury shall transfer P10 billion to the trust fund as soon as the law is enacted, and then P10 billion in the 2nd year, P15 billion in the 3rd year, P15 billion in the 4th year, and P25 billion in the 5th year, for a total of P75 billion.

The trust fund will come from the coco levy fund – the tax imposed on coconut farmers by the dictator Ferdinand Marcos from 1971 to 1983. Marcos and his cronies invested the money in businesses, but “rewards” and benefits promised to the farmers never materialized.

Besides Pangilinan and Villar, other authors of SB No. 1396 were senators Ralph Recto, and Imee Marcos, daughter of the late dictator.

In early 2019, Duterte vetoed two bills on the coco levy fund – one creating a trust fund and another reconstituting the PCA Board. Malacañang disagreed with the inclusion of 6 private farmers in the PCA Board because it said public funds should not be managed by private persons. The Palace also found the PCA Board’s authority under the bill too broad.

In drafting the latest version of the coco levy bill, Villar took care not to include the provisions that prompted Duterte’s veto, such as the larger proportion of farmer representatives in the PCA Board.

During his State of the Nation Address (SONA) in July 2019, Duterte acknowledged that the coco levy money “was taken out of the pockets of Filipinos arbitrarily.” He then pushed for the passage of a new coco levy bill, mentioning it during his latest SONA last July.

The House of Representatives’ version of the coco levy bill is still pending at the committee level. –

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JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.