Press Release
February 26, 2016

EDSA's unfinished business is giving back
coco levy funds to farmers

One unfinished business of the 1986 EDSA revolution is how to plowback the billions in coco levy funds to the millions of farmers who paid them, Senate President Pro-Tempore Ralph Recto said.

"Thirty years have passed and the farmers are still waiting for the money, the fund is still frozen, and the implementation of the executive orders mandating its use has been stopped by the courts," Recto said.

"Patay na ang mga nagbayad ng levy, patay na rin ang mga puno ng niyog na pinagkuhanan ng copra, pati yung proseso ng kung papaano ibalik ang levy sa sector ng niyog sa kasalukuyan ay mukhang patay na rin," Recto lamented.

He likened the funds "to a frozen buko salad which farmers can see but can't eat."

"We must push the reboot button," Recto said, "to restart the process while putting more regular funds to rejuvenate the coconut industry, especially in the 41,662 hectares in Yolanda-hit areas where 34 million trees were destroyed."

Recto said a government agency estimated that 90 percent of the 3.4 million coconut industry workers are poor and 44 million coconut trees, or one in seven, are old and must be replaced.

Aggravating this poverty picture and the court-ordered freeze in the coco levy disposition is the cut in the government's coconut replanting budget, he said.

Recto said the Philippine Coconut Authority's (PCA) budget subsidy from the national government even went down to P1.27 billion this year from P4.1 billion last year and P2.4 billion in 2014. "Na-Yolanda na, nagka-El Nino pa sa pondo."

Birthed by Republic Act 6260, and expanded by four Marcos decrees, the coco levy was imposed on copra sales purportedly to raise capital investment for the coconut industry.

By 1986, the total amount collected from the various coconut levies from 1971 to 1982 amounted to P9.7 billion. In the aftermath of EDSA I, the amount was sequestered by the Presidential Commission on Good Government (PCGG), which also triggered a long legal struggle for its ownership.

On May 7, 2004, the Sandiganbayan rendered a partial summary judgment declaring that the six Coconut Industry Investment Fund - Oil Mills Group (CIIF-OMG) companies, their 14 holding firms, and the CIIF-OMG block of San Miguel Corporation (SMC) shares as "owned by the Government in trust for all the coconut farmers."

The Supreme Court (SC), in its decision dated Jan. 24 2012, upheld the Sandiganbayan ruling.

On the same year, the SMC shares amounting to P57.6 billion were paid for by San Miguel.

The total amount of coco levy fund released for public dispensation was estimated to be worth P77 billion including interest when the SC issued the ruling.

There are, however, estimates that the present value of all coco levy assets to be in the neighborhood of P100 billion.

"Because we are clueless about the real amount, an audit is in order," Recto said.

Following the SC order, bills were filed in the House and the Senate on how to judiciously and transparently dispose the levy for the benefit of coconut farmers.

The Senate bill, authored by Recto and Sen. Cynthia Villar, was about to be approved on second reading when Malacañang suddenly issued twin orders governing its use in March last year.

Executive Order 179 provides for the inventory, privatization and transfer of coco levy assets in favor of government while Executive Order 180 mandates the transfer of the funds to government for an "Integrated Coconut Industry Roadmap Program."

In May last year, the SC, acting on a farmers' group plea, issued a Temporary Restraining Order (TRO) stopping their implementation. In the meantime, Recto called for increased funding for the coconut replanting and intercropping program. "There's no TRO on this."

Meanwhile, P60.1 billion in coco levy funds are parked in the Treasury after it was remitted there in May last year, Recto said.

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