House OKs bill creating trust for coco levy funds
The House of Representatives has passed a bill creating a permanent trust to manage the multibillion-peso coco levy funds for the benefit of local coconut farmers and the coconut industry.
The proposed Coconut Farmers and Industry Development Act, or House Bill No. 6135, was among the measures approved on final reading by the lower chamber on Oct. 9, a day before Congress went on recess.
“Coco levy fund is a beautiful fund, [which] will lay to rest something that has been bothering us for so many years,” Speaker Feliciano Belmonte Jr. said in a recent interview.
‘Wise move’
“This bill seeks to make it a permanent trust fund, of which only the earnings can be spent, and only for the development of the coconut industry. I think that is a good thing. It’s a wise move,” he said.
The coco levy funds were forcibly collected from coconut farmers over nine years during the martial law period under dictator Ferdinand Marcos, supposedly for investments in the coconut industry, but which were allegedly diverted to various financial instruments by his cronies.
The funds were sequestered by the government after the fall of the Marcos dictatorship in the people power uprising of 1986.
In 2013, the Supreme Court upheld a lower court decision to award to the government a 24-percent chunk of San Miguel Corp. (SMC) shares, which was part of the 47-percent block of SMC shares that the government had sequestered on suspicion that they were part of coco levy proceeds.
Public funds
The ruling stated that the coco levy funds, valued at about P70 billion, were public funds and were to be used for the benefit of coconut farmers and to develop the coconut industry.
A ruling in April 2011 had awarded a 20-percent chunk of SMC shares estimated to be worth P58 billion to Marcos crony Eduardo “Danding” Cojuangco, the uncle of President Aquino.
The Aquino administration subsequently issued two executive orders to manage the coco levy funds but these were temporarily restrained by the Supreme Court due to a petition by a claimant-group, the Confederation of Coconut Farmers Organizations of the Philippines Inc., which argued that the government did not have the legal mandate to administer the coco levy funds.
Under the House bill, the issue is settled by declaring that all assets and benefits emanating from the coconut levy would be consolidated and deposited in a trust fund “for the exclusive benefit of coconut farmers and farm workers.”
Five-year plan
It mandates the creation of an ad-hoc committee that will prepare a five-year Coconut Farmers and Industry Development Plan, laying out programs and projects for coconut farmers to be financed by the trust fund.
Overseeing the implementation of the plan is a “Coconut Farmers and Industry Trust Fund Committee” to be chaired by the Secretary of Agriculture with the Secretary of Finance as vice chair, under the Office of the President.
The committee will monitor the implementation of the five-year plan and approve disbursements of the fund.
The bill also mandates the Presidential Commission on Good Government to conduct a complete accounting and inventory of all coco levy assets, while the Commission on Audit would be tasked to audit the inventory.
The proposed trust fund shall consist of the trust principal and the trust income. The bill provides that no portion of the trust fund shall accrue to the general fund of the national government.
