Sandiganbayan ends decades-long legal dispute on P74-B coco levy fund

The Sandiganbayan has ruled that an estimated P74 billion worth of assets from the Coconut Industry Investment Fund (CIIF) belong to the government and must be distributed to coconut farmers.

In a resolution dated August 7, the Sandiganbayan Second Division overturned its 2017 decision calling for more hearings on the civil case involving United Coconut Planters Bank (UCPB) and the Coconut Planters Life Assurance Corporation (Cocolife) by granting the State’s motion for reconsideration.

The government argued that the Sandiganbayan did not have the authority to review the landmark Supreme Court ruling that declared San Miguel Corporation (SMC) shares as government property, since the shares of stock were acquired using coco levy funds that were collected from coconut farmers during the administration of then-President Ferdinand Marcos.

In 2014, the SC ruled with finality on a 2004 decision of the Sandiganbayan that declared the government as owner of the coco levy funds.

The SC decision is final and executory, despite the fact that Sandiganbayan gave UCPB and Cocolife the chance to assert its claim last year.

The anti-graft court then issued a writ of partial execution, ordering all income earned by 20 CIIF companies and the more than 753 million preferred shares in SMC be used to benefit the coconut industry.

“All income, interest, or profit derived from these assets, to be used only for the benefit of all coconut farmers and for the development of the coconut industry,” the resolution said.

While an estimated P74 billion of the coco levy funds have been turned over to the Bureau of Treasury, Presidential Commission on Good Government said that billions of pesos more have yet to be recovered.

Now, there is practically no legal impediment that the government must deal with in distributing the coco levy funds to farmers—but an implementing law has yet to be passed.

During his third State of the Nation Address, President Duterte urged Congress to pass a law creating a trust fund for coconut farmers. 

The bicameral conference committee approved last week a bill creating a P100-billion coco levy trust fund to be used for 25 years for the benefit of 3.5 million coconut farmers. 

The bill states that the fund be invested in Treasury bills and handled by the Philippine Coconut Authority.

The government first attempted to seize the tax collection from coconut farmers in 1987. The funds were allegedly used in favor of those allied with the late dictator Marcos, including crony and SMC chairman Eduardo Cojuangco Jr.

The legal dispute was divided into eight civil cases with the recovery of CIIF assets resolved by the Sandiganbayan and affirmed by the Supreme Court reflecting the most progressive development.

Former President Benigno Aquino III attempted to distribute the coco levy funds to farmers through Executive Order Nos. 179 and 180, but the SC issued a temporary restraining order on both in 2015.

The SC said the Office of the President has no authority over the funds, emphasizing the need for legislation so that farmers can benefit from the money. —KBK/RSJ/VDS, GMA News