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Senate OKs coco levy bill on final reading

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The Senate on Monday approved on third and final reading a bill seeking to establish a trust fund from coco levy assets which should be disbursed in the next five decades for the benefit of around 3.5 million farmers.

Senate Bill No. 1396 got 22 affirmative votes, zero negative votes, and zero abstention in the upper chamber, more than two months after President Rodrigo Duterte urged Congress to pass the measure during his fifth State of the Nation Address.

Under the proposed law, the Coconut Farmers and Industry Trust Fund shall be established using proceeds from coco levy fund and assets sequestered by the government which is estimated to be around P100 billion.

Unlike the vetoed coco levy bill last year, this one specifically states that the period set for the utilization of the trust fund would only be 50 years, considering 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.

A development plan for the coconut industry, which shall be prepared by the Philippine Coconut Authority (PCA) and approved by the President, shall guide how the trust fund shall be disbursed.

Immediately upon the enactment of the measure, the Bureau of Treasury (BTr) shall transfer P10 billion to the trust fund.

From the second up to the fifth year of its enactment, the BTr shall transfer P10 billion, P15 billion, P15 billion, and P25 billion, respectively, to the trust fund.

All coco levy assets in the name of the Philippine government shall also be sold within a period of five years after the bill is signed into law.

Other coco levy assets that may be recovered in the future shall likewise be sold within five years from the time they have been declared as belonging to the government. The proceeds of which shall also be turned over to the trust fund.

The amount in the trust fund account available for disposition shall not be lower than P5 billion every year, the bill stated.

The following shall be the breakdown of the annual allocation from the trust fund:

  • 15% for planting and replanting of hybrid coconut seedlings and  production of hybrid coconut seedlings by the Philippine Coconut Authority
  • 5% for research and production of hybrid coconut seedlings by the Department of Science and Technology - Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development;
  • 8% for the training of coconut farmers and their families as listed in the coconut farmers registry in farm schools through Technical Education and Skills Development Authority and Agricultural Training Institute to be shared equally;
  • 5% for research, marketing and promotion by the Bureau of Micro Small and Medium Enterprise Development under the Department of Trade and Industry;
  • 10% to be shared equally for farm improvements through diversification and intercropping with livestock, dairy, poultry, coffee and cacao production by the National Dairy Authority and the Department of Agriculture;
  • 10% for shared facilities for processing by the Philippine Center for Postharvest Development and Mechanization (PHilMech); to be given to cooperatives. If there’s no cooperative in the town, it will go to LGUs;
  • 5% for organizing and empowering coconut farmer organizations and their cooperatives under the Cooperative Development Authority;
  • 10% to be shared equally for the credit programs of the Development Bank of the Philippines and the Land Bank of the Philippines;
  • 10% for infrastructure development  to be implemented by the Department of Public Works and Highways in coconut producing local government units;
  • 8% for scholarship programs for farmers and their families to be implemented by the Commission on Higher Education;
  • 10% for health and medical programs for farmers and their families;
  • 4% for crop insurance to be implemented by the Philippine Crop Insurance Corporation

Addressing Duterte's previous concern on "lack of mechanisms for checks and balances," which was one of the reasons cited for the veto of the bill last year, this version creates the Trust Fund Management Committee.

Mandated to ensure the judicious use of the coco levy trust fund and to set the investment strategy, the committee shall be composed of the Department of Finance, Department of Budget and Management, and Department of Justice.

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.

The House of Representatives' coco levy bill is still being fine-tuned by the technical working group at the committee level.

The coco levy fund 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

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