In The Know: Coconut levy
MANILA, Philippines—The coconut levy was a tax exacted from coconut farmers from 1972 to 1982 by then President Ferdinand Marcos, supposedly to develop the coconut industry.
These were the Cocofund levy, the Coconut Consumers Stabilization Fund Levy (CCSF), the Coconut Development Project Fund (CDPF) and the Coconut Industry Stabilization Fund (CISF).
The Cocofund levy was imposed from 1972 to 1982 by virtue of Republic Act No. 6260 or the Coconut Investment Act, which was enacted on June 19, 1971. The law stated that a farmer must pay fifty-five centavos per 100 kilos of copra or equivalent product and for every fifty-five centavos, fifty centavos shall be set aside for the Coconut Investment Fund. The remaining five centavos would be allocated to the Philippine Coconut Administration and the Philippine Coconut Producers Federation.
The CCSF levy was imposed from August 1973 to May 1980 under Marcos’ Presidential Decree 276, which was signed on Aug. 20, 1973. The decree stated that there should be a P15 levy for every 100 kg. of copra “for the benefit of coconut farmers”. Marcos later amended the decree in 1974, through PD 414, which increased the levy to P100 per 100 kg of copra.
A Cocofund receipt was issued for the first levy but not for the second.
The CCSF was suspended on May 22, 1980 through PD 1699, due to strong public criticism. A levy on exportable coconut products was imposed through CDPF from June 17, 1980, to Sept. 9, 1981.
The CISF was imposed from October 1981 to August 1982, restoring the coco levy that was suspended in 1980.
Both the CDPF and CISF levies were a continuation of the CCSF levy. The total collection of the three amounted to P9.6 billion, estimated to have grown to about P130 billion in 2007.
In 1975, Marcos authorized the Philippine Coconut Authority to use the funds to buy a bank “for the benefit of the farmers.” This bank was First United Bank, later renamed United Coconut Planters Bank (UCPB).
Money from the levy was deposited interest-free in UCPB.
Eduardo “Danding” Cojuangco Jr., who became the president and CEO of UCPB, was designated by Marcos as the administrator of the coco levy fund.
UCPB became the administrator of the Coconut Industry Investment Fund (CIIF), a group of 14 holding companies owned by six oil mills. These companies also held numerous assets including San Miguel Corp. shares and majority or controlling shares in shipping and insurance firms, a cocoa plantation, a management company, 10 trading companies and seven copra trading companies. Inquirer Research
Sources: Long and Tortuous Road to Coconut Levy Recovery by Romeo Royandoyan, PDI Archives, lawphil.net
