Duterte: Release coco levy to farmers

President-elect Rodrigo Duterte has directed his legal team to initiate moves to ensure that assets allegedly acquired illegally using a coconut levy imposed during the martial law years—now worth more than P100 billion—are released to the country’s coconut farmers, according to Emmanuel F. Piñol, the incoming agriculture secretary.

Piñol said in a statement that Duterte told his designated Cabinet officials in a meeting on Wednesday that the levy “is an emotional issue for the coconut farmers” and “should be given to the farmers.”

He said Duterte issued the directive, specifically addressed to his presidential legal adviser, Salvador Panelo, when Piñol asked for a policy statement on the coconut levy funds.

Piñol did not elaborate on a complex issue with far-reaching ramifications that activist groups said not only concerned financial matters but also social and distributive justice in the country’s poorest agricultural sector involving a quarter of the nation’s 100 million population.

“If it were ‘released’ as cash, then there will be no development of the farmers’ impoverished condition,” said Joey Faustino, executive director of the Coconut Industry Reform Movement, which has been at the forefront of a three-decade court battle to recover the illegally acquired assets.

“We had told Mayor Duterte this in a sectoral consultation in Catanauan, Quezon, on March 30. The government has the obligation to design programs for direct benefits of the coconut farmers coming from the coco levy,” Faustino said.

Activists said returning cash to farmers who paid the levy—many of them had died—would result in chaos and anarchy.

At the center of the financial issue is more than P71 billion in shares of stock in San Miguel Corp. purchased using the levy funds under an investment scheme by 14 holding companies set up by businessman Eduardo “Danding” Cojuangco, then head of the United Coconut Planters Bank.

The shares, comprising 24 percent of the majority holdings in SMC acquired in 1983 at P2 billion, were recovered after decades-long litigation.

Some of the stock certificates were discovered in a safe in Marcos’ room after he was ousted in the Edsa People Power Revolution in 1986.

Joke of the century

The Supreme Court, in a decision in 2001, ruled that there can be no private ownership of assets acquired using tax money. In another decision on the 24-percent bloc of SMC shares in 2013, the court ruled that the recovered levy funds should be used “only for the benefit of all coconut farmers.”

Marco Sardillo, a young pro bono lawyer for the activists, said the court’s statement meant “not a finite listing of all the members of that universe, rather ‘all coconut farmers’ as a sector. After all, a levy is a tax collected from a particular group or sector.”

The court also had ruled that another 20-percent bloc of SMC shares worth more than P80 billion—a larger amount because these are common shares while the 24 percent portfolio was converted into preferred shares—belonged to Cojuangco.

This ruling was attacked by then Justice Conchita Carpio Morales as the “biggest joke to hit the century.” Activists are still attempting to recover this bloc of shares despite a final ruling by the court.

Another P30 billion worth of assets—mainly oil mills and UCPB are part of the allegedly illegally acquired wealth by Marcos cronies using the levy fund.

Trust fund

The House of Representatives, acting on President Aquino’s directive to act urgently late last year in one of his “last two minutes” initiatives, approved a bill seeking the establishment of a “coconut farmers and industry trust fund and providing for its management and utilization.”

But the Senate failed to act on its version at the close of the 16th Congress last month.

The bills call for investing the P71 billion in recovered SMC assets and using interests for projects that would benefit the industry.

Discussions on how the principal would be invested had bogged down consideration of the measure before the Senate adjourned sine die.

Danny Carranza, secretary general of the peasant group, Katarungan, said with Duterte’s allies in the “supermajority” in the incoming 17th Congress, the bill should be passed before the end of the year.

“Its immediate passage would show that, indeed, change is really coming for the impoverished coconut farmers,” he said.

Replanting scheme

Piñol also said he had presented to Duterte a draft policy paper, dubbed Copra (Coconut Productivity and Rehabilitation Program), which explains a proposed six-year initiative of developing 600,000 hectares of new coconut farms.

“The massive replanting of coconut in the country is aimed at regaining the Philippines’ status as the No. 1 coconut producer in the world,” he said.

“I was assured by PCA [Philippine Coconut Authority] officials that the agency and its stakeholders are capable of producing planting materials to cover the 600,000 hectares of new coconut areas in the country,” he added.

The former North Cotabato governor said that with the expected release of the coconut levy funds to farmers as well as the start of the massive planting program, the coconut industry was expected to regain its reputation as one of the country’s biggest foreign exchange earners for the country. With reports from Fernando del Mundo and Ronnel W. Domingo in Manila; and  Delfin T. Mallari Jr., Inquirer Southern Luzon; and Germelina Lacorte, Inquirer Mindanao