WHAT WENT BEFORE: Coconut levy imposed by Marcos
The coconut levy was a tax imposed by President Ferdinand Marcos on the produce of coconut farmers between 1973 and 1982, supposedly to develop the coconut industry.
Through Republic Act No. 6260, a tax of 55 centavos was imposed initially on the first sale of every 100 kilos of copra.
Upon collecting the initial P100 million, the Philippine Coconut Authority (PCA) established the Coconut Investment Fund, a capital stock subscribed to the government and on behalf of the coconut farmers.
In 1975, Marcos issued Presidential Decree No. 755, which authorized the PCA, whose board included businessman Eduardo “Danding” Cojuangco Jr., to use the levy funds to buy 72.2 percent of First United Bank (FUB), which was later renamed United Coconut Planters Bank (UCPB). Cojuangco became its president and chief executive officer.
With the PCA and UCPB in their control, Cojuangco and his associates were able to buy companies and mills placed under the Coconut Industry Investment Fund (CIIF), a group of 14 holding companies whose assets included 47 percent of San Miguel Corp. (SMC). These assets were held by UCPB, the CIIF administrator.
In 1986, shortly after the Edsa People Power Revolution, all coco levy-acquired assets were sequestered by the Presidential Commission on Good Government (PCGG), but control of UCPB went to Cojuangco when Joseph Estrada assumed the presidency in 1998.
In December 2001, the Supreme Court ruled that the coco levy funds were “public in character” but left it to the Sandiganbayan to decide who owned the assets acquired with the funds.
In its 2003 ruling, the Sandiganbayan declared unconstitutional PD 755 and voided the transfer of the shares of stock of FUB/UCPB by the PCA to Cojuangco, which cost the PCA more than P10 million in 1975.
The antigraft court forfeited 72.2 percent of UCPB’s outstanding shares in favor of the government.
The Supreme Court ruled in 2012 that the 24-percent block (originally 27 percent but diluted and reduced because of SMC’s expansion) belonged to the government in trust for the country’s coconut farmers.
In November 2012, the high court affirmed its ruling that Cojuangco was not entitled to the UCPB shares that were bought with public funds and were considered public property. —Inquirer Researcher
SOURCE: INQUIRER ARCHIVES, PCGG
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.