House OKs refiled bill creating coco levy trust fund

The House of Representatives on Monday approved on third and final reading the refiled bill seeking to establish the Coconut Farmers and Industry Development Trust Fund, which is seen to benefit farmers and develop the coconut industry.

With a vote of 159 in the affirmative and five in the negative, the chamber approved House Bill 9197, otherwise known as the proposed "Coconut Farmers and Industry Development Trust Fund Act."

The approval of the refiled bill came more than three months after President Rodrigo Duterte vetoed its original version due to supposed lack of safeguards and concerns that it may violate the Constitution.

Under the refiled measure, a P10-billion "jumpstart fund" will be created and will be used within two years from the President's approval to revitalize the development of the coconut industry.

Contrary to the provisions in its original version, the refiled measure mandates the trust fund be only maintained for a period of 30 years or until the fund is fully utilized.

"No portion of the trust fund shall be derived from the General Fund of the National Government," the refiled bill said.

The trust fund will come from the assets of the coconut levy funds — taxes, charges and other fees which have been collected from coconut farmers, planters, millers and other end users, the bill said.

It added that "any unutilized balance in the trust fund after 30 years shall revert to the General Fund of the National Government, and shall be capitalized, managed, utilized, and accounted for in the manner provided in the Act."

In vetoing the original version of the measure, Duterte feared that the establishment of an “effectively perpetual” trust fund would violate Article VI, Section 29(3) of the 1987 Constitution which provides that money collected on any tax levied for a special purpose “shall be treated as a special fund and paid out for such purpose only.”

The refiled measure also mandates an annual allocation of P5 billion will also be released to fund programs and projects provided under the measure, and that the trust fund may be used only for the purpose for which it was created.

The trust fund will be deposited to the Bureau of Treasury, which may then designate alternative depository banks.

The controversial coco levy fund came from taxes imposed on coconut farmers during the martial law years by alleged cronies of Marcos, including Eduardo "Danding" Cojuangco, with the promise of sharing investments and development of the industry.

In January 2012, the Supreme Court ruled in favor of government that a 31-percent bloc of San Miguel Corp. shares was bought using the coconut levy funds – which constitute public money – with a caveat that the money should be used solely for the benefit of farmers and the industry.

The ruling became final on September 4 that same year. —LDF, GMA News