Senate OKs coco levy bill on 2nd reading

The Senate on Monday passed on second reading a bill seeking to establish a coco levy trust fund that is seen to benefit around 3.5 million coconut farmers in the Philippines.

According to Senate Bill No. 1396, the Coconut Farmers and Industry Trust Fund shall be established using proceeds from coco levy assets sequestered by the government.

Fifty years was the period set for the utilization of the trust fund, taking into consideration the previous opinion of President Rodrigo Duterte that establishing an “effectively perpetual” trust fund would violate Article VI, Section 29(3) of the 1987 Constitution

It shall be managed and disbursed in accordance with a development plan which shall be prepared by the Philippine Coconut Authority (PCA) and approved by the President. 

The development plan—setting the policy and direction of the coconut industry —shall include programs to increase the farm productivity of coconut farmers, establish coconut-based enterprises, and modernize the industry towards global competitiveness.

Immediately upon the passage of the proposed law, the Bureau of Treasury shall transfer P5 billion to the trust fund, according to the measure.

All government agencies holding coco levy funds and assets shall transfer everything to the trust fund within five years from the effectivity of this measure.

The bill also states that the amount in the trust fund account for disposition by the implementing agencies shall not be lower than P5 billion every year.

New PCA Board composition, creation of Trust Fund Management Committee

Further, the bill reconstitutes the PCA Board to be composed of the secretary of the Department of Agriculture as chairperson and secretary of the Department of Finance as vice chairperson.

The secretaries of the Department of Budget and Management, Department of Science and Technology; PCA Administrator; and three representatives from the coconut farmers sector in Luzon, Visayas, and Mindanao shall also form part of the Board.

Meanwhile, a Trust Fund Management Committee composed of representatives from the Department of Finance, Department of Budget and Management, and Department of Justice, shall also be created to ensure the "judicious use" of the coco levy fund.

Senator Francis "Kiko" Pangilinan introduced an amendment to include the Agriculture Secretary and one farmer representative from the PCA Board in this committee but Senator Cynthia Villar rejected the proposal, saying the body is financial in nature.

The Senate voted in favor of Villar's original provision.

Last year, the Palace said Duterte vetoed the coco levy bill for lack of mechanisms for checks and balances, making it prone to corruption.

Villar previously expressed confidence that the refiled coconut levy bill will gain the signature of President this time. During Duterte's fifth State of the Nation Address last July, he urged Congress to pass the measure.

The coco levy fund in cash and assets, estimated to amount to around P100 billion, was generated from the additional tax collections imposed to coconut farmers in the country under the administration of former President Ferdinand Marcos.

It has been allegedly invested in enterprises for the personal interests of the late dictator and his cronies.

After Marcos was dislodged from power in 1986, local coconut farmers sought the assistance of the Presidential Commission on Good Government in filing court cases to refund their investment.

In 2014, the Supreme Court ruled that at least P71-billion worth of coconut levy funds used to purchase shares in San Miguel Corporation during the Marcos years belongs to the government and as such, should be used solely for the benefit of coconut farmers and for the development of the coconut industry. — RSJ, GMA News