(Second of a series)
Lopez, Quezon—The shares of stock in a state-owned bank and several oil mills Ronyl Sarsadiaz holds have yellowed their edges gnawed by termites.
“They used to be this thick,” the 46-year-old coconut farmer said, demonstrating two inches with his thumb and forefinger.
But the wood-boring insects have destroyed the papers in his trunk in a sad metaphor of an insidious Marcos dictatorship rip-off, critics say, under a coconut levy scheme that netted the regime and its cronies billions and zilch for the poor farmers who paid it.
Sarsadiaz’s wife Clarita said she once attended a town seminar and was told that she had to hang on to the stock certificates.
“It could have value later on,” she says of the parchments issued in the name of her husband’s late father, Rudy, no matter that on the back of the papers it was clear the stocks were “nontransferable,” and a subsequent court ruling had debased them.
Fe Loreto, 63, says that in the 1980s, a government agent went around her village, offering to buy the certificates for 10 centavos for every peso worth of stock. Her husband refused to sell.
“These are souvenirs of deception,” Loreto said, flashing a smile, recalling what her husband had told her.
The mother of seven shows no sign of bitterness, rather of acceptance of her situation in an interview in her ramshackle house at Barangay Jungo in this town at the edge of the cobalt Lamon Bay that sweeps out into the Pacific.
Loreto recounts that when her husband died eight years ago, she got P10,000 as death insurance from Cocolife after six months of traveling back and forth to Lucena City, two hours away by bus, to deal with red tape.
Activist lawyers said a third of the 6 million farmers had exchanged copra tax receipts for shares of stock each worth P1 in United Coconut Planters Bank (UCPB), Southern Luzon Coconut Oil Mills, San Pablo Manufacturing Corp., Legaspi Oil Co. Inc., Granexport Manufacturing Corp.
They said the registration process was so tedious that not too many farmers even bothered; going to town centers to do this cost them even more.
Truckload of receipts
Virgilio David, a retired general, who as military supervisor of the Philippine Coconut Authority (PCA) in 1978 exposed the systematic levy plunder, said he once received a truckload of receipts from a copra trader. He had nowhere to store the papers and promptly sent the vehicle back.
The buy-back of the certificates Loreto talks about took place amid UCPB’s move to consolidate investments. At UCPB’s headquarters at Makati, said a former director, rooms were filled to the rafters with the certificates as the realization hit that it would be a logistical and administrative nightmare to deal with the millions of unshod stockholders.
In 2003, the Sandiganbayan, enforcing a Supreme Court decision two years earlier declaring that levy funds were public in character, nullified private ownership of UCPB shares and, in effect, other public assets.
But, like most other farmers in poverty-stricken barangays without access to news in Manila, many households in Lopez kept their stock certificates.
UCPB and the oil mills comprised an elaborate coconut monopoly scheme that Marcos had set up with his closest business associates—Eduardo “Danding” Cojuangco Jr. and the late Maria Clara Lobregat—and then Defense Minister Juan Ponce Enrile, the chief martial law enforcer.
The levy was imposed in a series of presidential decrees issued beginning in 1973, a year after Ferdinand Marcos clamped the nation under martial law, as a consumer subsidy avowedly to ameliorate the lives of the poor farmers and modernize the industry.
The tax lasted until 1982, but in fact it went on longer as unscrupulous traders just went on with the practice in the remote areas for Lobregat’s influential organization, the Philippine Coconut Producers Association, or Cocofed.
The first decree expanded a premartial law levy of P.55 per 100 kilos of copra under an investment program to P15/100 kilos for the consumers’ stabilization fund. It was later raised to as many as P100/100 kilos to fund investments in “related coconut activities.” Thus, UCPB was set up, along with oil mills, and an export trading company.
Funds for Imelda projects
UCPB was formerly the First United Bank (FUB). Its acquisition, using levy funds, was arranged by Cojuangco from the family of the late President Corazon Aquino, his first cousin, in 1975. He did not spend a single centavo, “laway lang,” said a lawyer, but got a 10-percent commission anyway from the deal.
Cojuangco, a shrewd Tarlac politician and shrewder businessman with the reputation of “Pac-man,” the computer game where a player gobbles up everything in its path, intervened in the FUB while his cousins were reeling from a double whammy.
Corazon Aquino’s husband, the popular Sen. Benigno “Ninoy” Aquino, was imprisoned upon the declaration of martial law (he was assassinated in 1983 on his return from three-years of self-exile in Boston). Then her family’s sugar hacienda was hit hard by the end of the US quotas for the country’s produce and the collapse of world price for the commodity from 60 cents a pound to 3 cents a pound. A joke went around in social circles that the sugar barons were “down to their last Mercedes Benz.”
An audit after the ouster of the Marcos dictatorship in 1986 showed the levy collection had reached P9.7 billion, but billions more were undeclared and pocketed by traders for Marcos and his Cocofed dummies in the provinces, according to industry activists.
The levy became the wallet that funded the most profligate projects of then First Lady Imelda Marcos. They included an international film festival that for the first time allowed the public screening of pornographic films; the construction of Coconut Palace at the edge of Manila Bay for the visit in 1981 of Pope John Paul II who refused to stay in such opulence amid so much penury (this year it was turned into an office for Vice President Jejomar Binay); and a children’s medical center that a skin-and-bones kid in Lopez had never seen.
Little went to farmers
Very little of the coconut largesse went to the farmers and their families who to this day remain destitute. There’s certainly no evidence of it in this palm-covered province, doormat for several dozen typhoons blasting the country annually from the Pacific.
Most houses of stone flooring, plywood, thatch and corrugated roof are decrepit. They are scattered along a one-lane road that at several stretches is concrete but is otherwise mostly dirt. It was muddy in the aftermath of the first storm of the season, “Bebeng,” that whipped the area last month during a visit by an Inquirer team. Malnourished children with runny noses and clad in rags played in the slime, watched by women with missing teeth.
The village straddles the mountainous Bondoc peninsula, from where in the afternoon farmers on horseback pull cartloads of copra to sell at the local pundohan, or farm gate.
During the Marcos years, villagers say the area served as a “nest” for communist New People’s Army guerrillas. “You often saw these nice people around, coming down from the hills with rifles slung on their shoulders,” says one resident.
Nuts were harvested once every three months, turned into copra for sale to traders, who then sold them to oil mills, whose products were turned into cooking oil and sundry items such as soaps and skin-whitening lotions.
Poorest of the poor
A farmer normally cultivated a hectare planted on the average with anywhere from 100 to 150 coconut trees, each yielding from 8 to 10 nuts. A good harvest yielded 1,500 nuts that translated into 325 kilos of copra. Farmgate prices hovered around P40 per kilo today.
Earnings reached about P150 per day, or even less, counting the expenses of harvesting and hauling. A family in this village had anywhere from six to eight children. Which, meant a person here lived way below the World Bank’s poverty threshold of a dollar (P43) a day.
Tenant farmers were in more difficult straits. Sixty percent of their earnings went to the landowners.
Studies reveal that 90 percent of coconut farms are tenanted. Tenancy is an endemic cause of poverty that fuels the world’s longest running communist insurgency. Half of the 1.2 million hectares of agricultural lands still subject to agrarian reform are planted to coconut.
Around 3.2 million ha, or 25 percent of total croplands, are planted to coconut, with an annual produce of 2.6 million metric tons of copra. This sector accounts for 30 percent of export earnings. And yet its farmers are among the most ill-fed, ill-clothed, unorganized, and uneducated tillers. Only 2 percent of their children reach college.
Death before benefit
Asked what benefits the farmers in the village had derived from programs promised by Marcos, Rene Cerilla said: “Wala lang.” (Nothing.) Most residents, the 46-year-old farmer said, had only a high-school education. He himself cultivates rice and maize to supplement a meager income from copra.
“The benefits you are trying to look into are really cloaks, blankets to cover up the whole scam,” said Joey Faustino, executive director of the Coconut Industry Reform Movement whose brother, a student activist, was tortured and killed during the martial law years.
“You have a life insurance that requires death before benefit, and not everyone is covered,” he said. There were T-shirts and calendars for Christmas, and a fabulous honorarium of P1,000 for attending government-sponsored seminars. “That’s about it,” he said.
Education promised the farmers by the regime was for college and master’s degrees but few of their children ever finished high school, said Faustino, seated in his sweltering office in a wooden, two-story apartment in Quezon City behind a wall on which a poster of Cojuangco is nailed with two darts stuck on the businessman’s face.
Protests mounted
Cries for social justice first publicly articulated by David in 1978 while he was a colonel in the active service resulted in the dismissal of some officials at PCA, the state regulatory arm. He says they were just “small fries,” but incensed farmers took to the streets.
Shades of Hanna Arendt’s “banality of evil” in Nazi Germany emerged.
The following year, some 7,000 farmers marched on Guinyangan town demanding reforms. Security forces opened fire on the protesters, leaving two dead and scores wounded in what is now annually commemorated as the “Guinyangan massacre.”
Former Vice President Emmanuel Pelaez, himself a coconut farmer, attempted to unload his own blockbuster on the levy shenanigans, but was ambushed in July 1982. He survived with multiple gunshot wounds; his driver was killed.
Pelaez was famously quoted on his hospital bed as telling Quezon City police chief Tomas Karingal, “General, what’s happening to our country?”
Tilted justice
Concerns over state repression overshadowed social justice issues. The plight of the farmers went largely unnoticed as the nation’s economy hit a tailspin under martial law and the political opposition focused on recovering lost freedoms.
What critics described as the “coconut levy racket” flourished and allegedly resulted in the acquisition, behind the controlled media glare, by Cojuangco and his companies of P2 billion worth of shares in San Miguel Corp. (SMC), one of the largest Philippine conglomerates, in mid-1983.
The shares were ordered sequestered upon the ouster of Marcos and the installation of Corazon Aquino as President in the wake of the 1986 People Power Revolution.
On April 12, the Supreme Court ruled that the state had failed to prove that funding for Cojuangco’s SMC portfolio came from state funds and handed its ownership to the tycoon. On Tuesday, the court junked an appeal by the farmers.
“The court made an exception in the case of Cojuangco,” said Faustino, noting the 2003 antigraft court ruling.
Still, many farmers are holding on to the promise of the worthless stocks. “They maintain this illusion that they may become millionaires,” Cerilla says.
“Justice in this country is tilted against the poor,” said former Supreme Court Chief Justice Reynato Puno. It certainly has turned against the coconut farmers. Puno is now sitting on the San Miguel board as a director.
(Next: SMC investment now worth P220 billion)