Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 3192

Introduced by HON. ALETA C. SUAREZ

EXPLANATORY NOTE

The coconut industry plays a major role in the economic and agricultural development of
the country. Based on the 2018 Selected Statistics on Agriculture published by the Philippines
Statistics Authority, a total of 14,049,100 metric tons of coconuts were produced by the country in
2017. Coconut consistently ranks third among the crops with the highest volume production from
2013 to 2017. It places second among the crops with the iargest areas planted / harvested, next to
palay. In terms of export, coconut-based products have been among the top export products of the
country. Clearly, the contribution of the coconut industry is significant to our economic gains.
However, it is saddening that the support obtained by our coconut farmers from the government is
inversely proportional. There is a decreasing trend in the world copra prices and domestic farm-
gate prices. Moreover, coconut remains vulnerable to destruction during typhoon season. It can be
recalled that the country lost 33 million coconut trees from the destruction brought by typhoons
Pablo and Yolanda. e

The Supreme Court has previously declared that the coconut levy fund and coconut levy
assets are owned by the government and must be used only for the intended purpose of benefiting
all coconut farmers and development of the coconut industry. In this regard, this bill aims to create
a special fund that shall be called the Coconut Farmers and Industry Development Trust Fund.
This Trust Fund shall originate from the coconut levy fund and its assets and shall be allocated to
support our coconut farmers and for the research and development of the coconut industry in the
country, in compliance with the Supreme Court decision.

This bill is re-filed from the 17th Congress Committee Report No. 1321 submitted on May
22, 2019 in reference to House Bill No. 9197, authored by Hon. Gloria Macapagal-Arroyo, Hon. Jose
Panganiban, Jr, Hon. Sharon $. Garin, Hon. Jesus Nonato Sacdalan, Hon. Anthony Bravo, Hon.
Orestes Salon, Hon. Peter Unabia, Hon. Micaela Violago, Hon. Aniceto “John” Bertiz II, Hon.
Leopoldo Bataoil, Hon. Jose “Pingping” Tejada, and Hon. Danilo E. Suarez. With the passage of

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this bill, it is hoped that the coconut industry will be able to bring in more investments, increase in
exports, and better national economic performance.

In view of the foregoing, the approval of this bill is earnestly sought.

eb

ALETA C. SUAREZ
resentative |
3rd District, Quezon Province

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No.. 3192

Introduced by HON. ALETA C. SUAREZ

AN ACT DECLARING THE COCONUT LEVY ASSETS AS THE COCONUT FARMERS
AND INDUSTRY TRUST FUND, PROVIDING FOR ITS MANAGEMENT AND
UTILIZATION, AUTHORIZING THE PRIVATIZATION AND MANAGEMENT OFFICE
TO DISPOSE THE COCONUT LEVY ASSETS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Coconut Farmers and
Industry Trust Fund Act”.

SEC. 2. Declaration of Policy. - It is hereby declared policy of the State to pursue
and attain the balanced, equitable, integrated, and sustainable growth and development of
the coconut industry. Towards this end, the State shall adopt the necessary measures to
immediately address the serious problems besetting the coconut industry, protect the
socio-economic well-being of coconut farmers, and ensure that the benefits due them,
especially the poor and the marginalized, under various statutes shall be consolidated and
their delivery expedited. Any measure or program undertaken in accordance to this Act
shall be deemed complementary to and shall not be a replacement for existing and
potential coconut development programs already conducted by other agencies.

CHAPTER I
DEFINITION OF TERMS

SEC. 3. Definition of Terms. - As used in this Act:

(a) Coconut Industry Investment Fund (CIIF) refers to the Fund created pursuant to

Presidential Decree (PD) No. 1468, which authorized the United Coconut Planters Bank
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(UCPB) to utilize the surplus funds from the Coconut Consumers Stabilization Fund
(CSSF) and the Coconut Industry Development Fund (CIDF) for investments in the
form of shares of stock in corporations organized for the purpose of engaging in the
establishment and operation of industries, commercial activities, and other allied
business undertakings related to the coconut industry in all its aspects and the
establishment of a research program into commercial and industrial uses of coconut.

(b) CIIF Holding Companies refer to the fourteen (14) holding companies namely: (1) Anglo
Ventures Corporation; (2) ACS Investors, Incorporated; (3) Arc Investors, Incorporated;
(4) AP Holdings, Incorporated; (5) Fernandez Holdings, Incorporated; (6) First Meridian
Development, Incorporated; (7) Randy Allied Ventures, Incorporated; (8) Rock Steel
Resources, Incorporated; (9) Roxas Shares, Incorporated; (10) San Miguel Officers Corp.
Incorporated; (11) Soriano Shares, Incorporated; (12) Te Deum Resources, Incorporated;
(13) Toda Holdings, Incorporated; and (14) Valhalla Properties Limited, Incorporated,
created by the CIIF Oil Mills Group to acquire, hold, and manage the shares of stocks of
San Miguel Corporation (SMC).

(c) CIIF-Oil Mills Group refers to the six (6) CIIF Companies: (1) Southern Luzon Coconut
Oil Mills; (2) Cagayan de Oro Oil Co. Incorporated; (3) Iligan Coconut Industries,
Incorporated; (4) San Pablo Manufacturing Corp.; (5) Granexport Manufacturing Corp.;
and (6) Legaspi Oil Co. Incorporated, acquired by the UCPB using the CII.

(d) CIF SMC Block Shares refer to the thirty-three million one hundred thirty-three
thousand and two hundred sixty-six (33,133,266) shares of stock in SMC, sequestered by
the Presidential Commission on Good Government (PCGG) in April 1986 representing
thirty-one percent (31%) of the total outstanding capital stock of SMC.

(e) Converted SMC Series 1 Preferred Shares refer to that portion of the CIF SMC Block
Shares covering seven hundred fifty-three million, eight hundred forty-eight thousand
and three hundred twelve (753,848,312) preferred shares of stock in SMC representing
twenty-four percent (24%) of the outstanding capital stock of SMC;

(f)\Coconut farmer refers to:

(1) Farmer-owner of a coconut farm who:

(i) Tills the land (owner-cultivator); or

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created under Section 11 of this Act, hereinafter referred to as the Committee, and as may
be amended from time to time, which shall provide the parameters for investments of the
Trust Fund or any portion thereof, and shall include, among others, asset allocation,
criteria for selection of fund managers, required income from the fund, and other
investment management threshold requirements.

(j) Trust Income refers to the income, interest earnings, and other monetary benefits realized
by and accruing to the Trust Fund or any portion thereof.

(k) Trust Principal refers to:

1. The initial Trust Principal composed of dividends declared, paid, or issued on the
Converted SMC Series 1 Preferred Shares; the proceeds from the redemption of the
Converted SMC 1 Preferred Shares; all income or interest derived therefrom as of the
effectivity of this Act; or any other cash Coconut Levy Asset deposited in the Bureau of
‘Treasury (BTr) and the UCPB as administrator of the CIE;

2. Any and all proceeds of privatization of the Coco Levy Assets is remitted thereto
by the Privatization and Management Office (PMO) organized under Article III of
Executive Order (EO) No. 323 (s. 2001); and

3. Proceeds of privatization of any or all properties or assets conveyed by any

person, group, or entity to the Committee, from time to time, as provided in Section 8
hereof.

CHAPTER II
AUDIT AND RECONVEYANCE OF COCO LEVY ASSETS

SEC. 4. Audit and Inventory of Coconut Levy Assets. - Upon the effectivity of this
Act, the PCGG shall conduct a complete accounting and inventory of the Coconut Levy
Assets as well as the investments, disbursements, and expenditures relating to the coconut
levy fund and submit a certified report to the BTr, the Commission on Audit (COA), and
the Office of the President (OP).

The COA shall audit the Report on the Accounting and Inventory of the Coconut
Levy Assets prepared and submitted by the PCGG for the purpose of, among others,

determining the completeness of said inventory, the existence of the subject assets,

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establishing the reasonableness of the asset valuation, and tracing of the flow of the
coconut levy fund.

The COA shall submit to the PCGG its initial audit report, the reviewed Report on
the Accounting and Inventory of the Coconut Levy Assets, and the valuation as well as the
empirical basis and methodologies employed for the said valuation, together with its
observations for revision and compliance, within ninety (90) days from submission of the
Report on the Accounting and Inventory of the Coconut Levy Assets. However, if
necessary, further audit may be undertaken after the initial audit.

The PCGG shall then incorporate the COA’s observations for revision and
compliance in the Report on the Accounting and Inventory of the Coconut Levy Assets
and submit the revised version to the COA within thirty (30) days, subject to reasonable
time extension, from the submission of the COA’s beckvations for revision and
compliance.

After determining that the observations for revision and compliance were
incorporated in the revised Report on the Accounting and Inventory of the Coconut Levy
Assets by the PCGG, the COA shall submit the final version of the Report on the
Accounting and Inventory of the Coconut Levy Assets to the Committee, as well as the
empirical basis and methodologies employed for the valuation.

‘The Committee shall publish the same, within fifteen (15) days from its receipt of
the final version of the Report on the Accounting and Inventory of the Coconut Levy
Assets, in at least two (2) newspapers of general circulation.

SEC. 5. Reconveyance of Coconut Levy Assets. - Immediately upon the effectivity of
this Act, the PCGG, the government representatives to the boards of sequestered/
surrendered corporations, and any government agency or person in possession, custody,
control, or administering any Coconut Levy Asset shall perform or cause the performance
of the following:

(1) Reconveyance of the title to the Republic of the Philippines over the Coconut
Levy Assets;

(2) Delivery of all stock certificates and other evidence of ownership to the BTr
for safekeeping; and

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(3) Deposit all cash Coconut Levy Assets in the Trust Fund.

Any provision of the law to the contrary notwithstanding, the BTr and the UCPB
shall directly remit the initial Trust Principal to the Trust Fund; Provided, That the BTr shall
transfer the remaining cash assets from the special account in the General Fund within a
period of five (5) years in equal amounts each year.

The COA shall conduct an audit to determine compliance with pertinent laws,
tules, and regulations on reconveyance of the Coconut Levy Assets to the government.

The COA shall also conduct the regular financial and compliance audit of the
Coconut Levy Assets, and submit the annual audit report thereon as mandated by the

government auditing rules and regulations, until said assets are privatized.

CHAPTER III
COCONUT FARMERS AND INDUSTRY TRUST FUND

SEC. 6. The Coconut Farmers and Industry Trust Fund. - There is hereby created a
trust fund to be maintained for a period not to exceed thirty (30) years or until the fund is
fully utilized to be known as the Coconut Farmers and Industry Development Trust Fund,
hereinafter referred to as the Trust Fund, which shall consist of the Trust Principal and the
Trust Income.

No portion of the Trust Fund shall be derived from the general fund of the National
Government; Provided That, any unutilized balance in the Trust Fund after thirty (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 this Act.

Nothing in this Act shall be understood to prevent or prohibit any person, group, or
entity from conveying to the Committee other properties and/or additional assets either
for the use of the coconut industry or for purposes of privatization, in which case, the
proceeds of such privatization shall form part of the Trust Fund.

SEC. 7. Purpose of the Trust Fund. - The Trust Fund shall be used exclusively for the
ultimate benefit of coconut farmers and for the development of the coconut industry, as
embodied in the Coconut Farmers and Industry Development Plan to be prepared

pursuant to Section 21 hereof.

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SEC. 8. Capitalization of the Trust Fund. - All assets and/or properties derived
from all coconut levy recovered assets; and all dividends, interest earnings, and incomes
that are available upon the effectivity of this Act shall form part of the initial capital of the
‘Trust Fund.

The Trust Fund shall thereafter be augmented with all the proceeds of
Privatization disposition of the Coconut Levy Assets remitted directly thereto by the
PMO in accordance with this Act, including any and all forms of income, interests,
earnings, yields, or any monetary benefit derived therefrom prior to the privatization/
disposition of these Coconut Levy Assets.

In order to ensure the enduring character of the Trust Fund, the Principal thereof
shall be augmented by grants, donations, and other lawful transfers by public or private
entities. At the end of the year, all unspent portion of the trust income for the year shall
accrue to the Trust Principal.

SEC. 9. Management and Utilization of the Trust Fund and Trust Income. - The
‘Trust Fund shall be available and may be utilized only for the purpose for which it was
created and upon authorization of the Committee, subject to the following conditions:

a. Ten Billion Pesos (Php 10,000,000,000.00) of the initial trust principal, which shall be
known as the Jumpstart Fund, may be used within two (2) years commencing from the
approval of the plan by the President to jumpstart the development of the industry;

b. All disbursements shall only be made on the basis of the funding requirement of the
Program, activity, or project by the Committee as provided in the Coconut Farmers and
Industry Development Plan; Provided, That an annual allocation of at least Five Billion
Pesos shall be released for the programs and projects provided under this Act; and

2

- The ceiling for expenses of the Committee for the administration, monitoring,
evaluation, information services, and other necessary activities for the effective
Performance of its functions under this Act shall be provided in the Implementing
Rules and Regulations under Section 26 of this Act. .

All releases from the Trust Fund approved by the Committee shall be released
directly to the implementing agencies; Provided, That, coconut productivity and

developmental programs and projects shall be implemented by the Philippine Coconut

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Authority (PCA) created under PD No. 232 (s. 1973), as amended by PD No. 1468 (s. 1978).
Other coconut productivity and developmental programs and projects implemented by
other agencies shall be closely coordinated with the PCA.

Disbursements or expenditures by the concerned implementing agencies in
violation of the purpose of the Trust Fund shall be void and shall subject the erring
officials and employees to disciplinary actions in accordance with existing laws, and to
appropriate criminal action under existing penalty laws. Disbursements of the funds
should be done in accordance with the Government Accounting Manual and all other
related laws, rules, and regulations.

SEC. 10. Designation of the Bureau of Treasury as Depository of the Trust Fund. -
Any law to the contrary notwithstanding, the BTr is hereby designated as the depository
of the Trust Fund, which shall: 7

a. Hold and account the Trust Fund in the manner set forth by the Committee;

b. Release funds directly to the implementing agencies upon the instruction of
the Committee;

¢. When so appointed by the Committee, act as a fund manager of the
investments of the Trust Fund with the authority and accountability as that of
a private fund manager; and

d. Perform other tasks as may be authorized by the Committee.

The Committee may designate alternative depository banks which shall perform

the same functions as that of the BTr.

CHAPTER IV
COCONUT FARMERS AND INDUSTRY DEVELOPMENT AND INDUSTRY FUND
COMMITTEE
SEC. 11. Creation of the Coconut Farmers and Industry Development Trust Fund
Committee. - The Coconut Farmers and Industry Development Trust Fund Committee is
hereby created under the OP.
The Committee shall have the following powers and functions:

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a. Coordinate and monitor the implementation of the Coconut Farmers and

Industry Development Plan;

s

Approve any allowable disbursement out of the Trust Fund pursuant to

Section 14 of this Act;

2

. Formulate the Investment Guidelines pursuant to the allowable investment
stated in Section 28 of this Act;

a

Appoint a fund manager, if necessary, to handle the investment of the Trust
Principal;

e. Identify the Coconut Levy Assets that will be privatized, retained, or
abolished and submit its reommendation to the President for approval;

. Approve the marketing and disposition program for the Coconut Levy Assets
approved for privatization;

a

After obtaining the approval of the President, authorize the sale and other
mode of privatization of the Coconut Levy Assets approved for privatization;
h. Authorize the rehabilitation of Coconut Levy Assets approved for
privatization pending actual disposition;

. Submit reports and recommendations to the President in connection with its
functions under this Act; and
j. Exercises such other incidental powers and functions as may be necessary to
attain the objectives of this Act. s
The PCA shall provide Secretariat support to the Committee.
SEC. 12. Composition. - The Committee shall be composed of the following:
a. Six (6) representatives from the government who shall be serving in ex officio
capacities:
1. Secretary of the Department of Agriculture (DA), as Chairperson;
2. Secretary of the Department of Finance (DOF), as Vice Chairperson;
3. Secretary of the Department of Trade and Industry (DT);
4. Secretary of the National Economic and Development Authority (NEDA);
5. Administrator of the PCA; and
6. A representative from the Office of the Executive Secretary.

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b. Three (3) representatives from the coconut farmers’ organizations, one (1) from Luzon,
one (1) from Visayas, and one (1) from Mindanao, who have considerable experience,
substantial membership, and reputable track records.

¢. Two (2) representatives from the coconut industry sector who have considerable
experience and reputable track records.

The nominees of the coconut farmers’ organizations shall be validated and
shortlisted by the PCA. The list of nominees, which shall number at least three (3) per
island group, shall be submitted to the President not later than thirty (30) days following
the effectivity of this Act. The representatives of the coconut industry sector shall be
appointed by the President from a list of nominees, which shall number at least six (6),
submitted by the PCA.

The government representatives in the Committee shall serve only during their
Tespective terms in office. The representatives from the coconut farmers’ organizations and
the coconut industry sector shall each hold a term of three (3) years, unless sooner
removed for cause, and may be reappointed once. Any of the representatives shall
continue to hold office until their successor is appointed; Provided, That any appointment
to fill a vacancy in the Committee shall be only for the unexpired term.

SEC. 13. Ex Officio Alternates. - The ex officio members of the Committee may
designate their respective permanent alternates who shall be the officials next-in-rank to
them and their acts shall be considered acts of their principals,

SEC. 14. Meetings of the Committee. - The Committee shall meet once a month, or
as often as deemed necessary and expedient to discharge its responsibilities. The presence
of at least a majority of the members present at a meting at which a quorum exists shall be
adequate for any decision by the Committee; Provided, That the approval of at least a
majority of the members of the Committee shall be required Es matters involving the
following:

a. Any single disbursement of funds involving more than Fifty Million Pesos (Php
50,000,000.00);

b. Any proposed investment involving more than One Hundred Million Pesos (Php
100,000,000.00); and

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c. All dispositions or privatization proposals.

Provided further, That the disbursements requiring the approval of at least a majority of the
members of the Committee may be subject to the President's disallowance.

The Chairperson, if unavailable, may designate the Vice Chairperson to convene the
Committee and preside over the Committee’s meeting on behalf of the Chairperson.

SEC. 15. Compensation of the Members of the Committee. - The members of the
Committee may be entitled to per diems and reimbursable expenses, in accordance with
the COA rules and regulations.

SEC. 16. Obligations of the Members of the Committee. - The members of the
Committee shall act with due care, diligence, skill, and good faith in all its dealings with
the Trust Fund and the Coconut Levy Assets. They shall avoid conflicts of interest and
declare before the Committee any interest they may have in any particular matter.

Where a member of the Committee receives any profit or benefit by virtue of his
Office, including acquiring shares in corporations that form apart of the Coconut Levy
Assets, using the Coconut Levy Assets for one’s benefit, receiving commission on contracts
from the Coconut Levy Assets, or taking advantage of corporate opportunities involving
the Coconut Levy Assets, all such profits or benefits shall be returned to the Trust Fund
without prejudice to any administrative, civil, or criminal action against such member.
This provision shall be applicable notwithstanding the fact that such member of the
Committee used one’s own funds in the venture.

The Committee shall recommend to the President the removal and replacement of
the member who performs such acts.

SEC. 17. Executive Director of the Committee. - The administrator of the PCA shall
be appointed as Executive Director of the Committee.

The Executive Director shall have the following powers and functions:

a. Execute policies and administer the programs approved or promulgated by the

Committee;

b. Monitor the progress of the implementation of the Plan and submit periodic
reports to the Committee;

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¢. Prepare an annual report on the activities of the Committee at the close of each
fiscal year and to submit a copy thereof to the President and Congress;

d. Keep and maintain official records and reports of the proceedings of the
Committee;

e. Administer oaths in all matters falling within the jurisdiction of the Committee;
and

f, Exercise such other duties as may be vested by the Committee that are consistent
with the provisions of this Act.

SEC. 18. Cooperation with the Committee. - The Committee may also call upon any
department, bureau, office, agency, and instrumentality of the Government, including
Government-Owned or -Controlled Corporations (GOCCs), for any assistance it may need
in the discharge of its functions and responsibilities as well as in the implementation of its
programs and projects.

SEC. 19. Accounting and Auditing. - The Committee shall maintain records and
accounts of all investments, income, receipts, disbursements, and other transactions
relating to the management, administration, and disposition of the Trust Fund. These
records and accounts shall be maintained in accordance with existing accounting and
auditing laws, rules, and regulations. The Trust Fund shall be audited by the COA.

SEC. 20. Legal Counsel. - The Solicitor-General shall be the ex officio counsel of the
Committee on legal matters.

CHAPTER V
COCONUT FARMERS AND INDUSTRY DEVELOPMENT PLAN

SEC. 21. Preparation of the Coconut Farmers and Industry Development Plan. - An
Ad Hoc Committee is hereby created to be composed of technical officials from the
Department of Agriculture, the Department of Agrarian Reform, the Department of
Interior and Local Government, the Department of Finance, the Department of Public
Works and Highways, the Department of Science and Technology, the Department of
Social Welfare and Development, the Department of Health, the Department of Trade and
Industry, the Department of Budget and Management, the National Economic and
Development Authority, the National Anti-Poverty Commission, the Technical Education

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and Skills Development Authority, the Land Bank of the Philippines, and the
Development Bank of the Philippines. :

In addition, twelve (12) representatives from the coconut farmers’ organizations
composed of four (4) from Luzon, four (4) from Visayas, and four (4) from Mindanao; and
four (4) representatives from the different coconut industry sectors who all have
considerable experience, substantial membership, and reputable track records, shall also
be members of the Ad Hoc Committee.

The nomination process of the representatives from the coconut farmers’
organizations and the different coconut industry sectors shall be the same as that in
Chapter IV, Section 12 of this Act; Provided, That, the list of nominees from the coconut
farmers’ organizations shall number at least twelve (12) per island group; Provided, also,
that eight (8) of the twelve (12) representatives from the coconut farmers’ organizations
must not have more than five (5) hectares of coconut farm landholding; Provided, Further,
That, the list of nominees from the coconut industry sector shall number at least twelve
(12).

The Administrator of the PCA shall act as the Ad Hoc Committee's Chairperson.

The members of the Ad Hoc Committee shall be compensated in the same manner
as that of the Committee under Chapter IV, Section 15 of this Act.

The Ad Hoc Committee, in consultation with coconut farmers’ organizations,
industry associations, civil society organizations, academe, concerned government
agencies, and other stakeholders in the coconut industry shall indicate in an integrated
coconut industry strategy the policies for the development and rehabilitation of the
coconut industry. It shall prepare every five (5) years, or as determined by the Committee,
a medium term plan of programs, activities, and projects which shall be funded out of the
‘Trust Fund and which shall be known as the Coconut Farmers and Industry Development
Plan hereinafter referred to as the Plan. The Plan shall be consistent with the Philippine
Development Plan and shall be subject to mandatory review every year.

The Administrator of the PCA shall submit an annual report to the Committee on

the status of the implementation of the Plan and its corresponding programs/ projects.

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The PCA shall commission an independent study on the third year, or any other
date as may be determined by the Committee, to assess the impact of the programs and
Projects in the Plan. The results of the independent study shall be one of the bases to
update the Plan. The conduct of the study shall be chargeable to the regular funds of the
PCA.

In the formulation of the Plan, the Ad Hoc Committee shall be guided by the
following objectives:

a. Increase in the income of coconut farmers and increase coconut productivity
including intercropping and livestock-raising;

b. Establishment of coconut-based enterprises including integrated processing of
coconut products and downstream products;

¢. Rehabilitation and modernization of the coconut industry towards global
competitiveness;

d. Provision of timely and critical support to coconut farmers organization; and

e. Establishment of social protection programs that directly benefit the coconut
farmers and farm workers, in case these social protection programs are not funded by an
appropriation law or any other special laws, or where funding is insufficient. The social
protection programs shall include: (1) social services such as life, medical, and accident
insurance coverage of the coconut farmers and farm workers; (2) scholarships for the
benefit of the deserving descendants of the coconut farmers and farm workers; and (3)
livelihood programs. 2

The Plan shall provide an indicative funding requirement or allocation for the
implementation of any and all of the programs and projects, which funding or allocation
shall be itemized or broken down on a project-to-project basis; Provided, That, (a) for
projects which are recurring, or to be implemented on a regular basis, the allocation shall
indicate the annual fund that may be required to implement the project; and (b) for
projects that are to be implemented or concluded within a period of time, the allocation
shall indicate the total fund that may be required for the implementation of the whole
project, itemized according to the phases or stages of the project. The Plan shall also
include the contribution of the regular budget of the PCA.

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Within ninety (90) days from the appointment of all farmer-representatives and the
industry representatives, the Plan shall be submitted by the Ad Hoc Committee to the
Committee which shall, in turn, submit the Plan to the President, as endorsed by the
Economic Development Cluster, for approval. Immediately upon its approval, the Plan
shall be returned to the Committee for the disbursement of funds in accordance with the
provisions of this Act. Any amendment to the Plan shall require the approval of the
President, as endorsed by the Economic Development Cluster.

If the President has any objection or any amendment thereto, the President shall
notify the Committee within thirty (30) days from receipt thereof: otherwise, the Plan shall
be deemed approved.

CHAPTER VI
PRIVATIZATION OF THE COCONUT LEVY ASSETS

SEC. 22. Privatization of Coconut Levy Assets. - Pursuant to the national policy on
the efficient and transparent privatization of government assets (including GOCCs) which
are unnecessary or inappropriate for the government sector to maintain:

a. The Governance Commission for Government-Owned or -Controlled
Corporations shall determine whether it is to the best interest of the Government to
privatize any non-cash Coco Levy Asset and recommend to the President the privatization
and the mode of the divestment, taking into account the need to generate maximum cash
recovery and the implications of such divestment on the coconut industry.

b. The PMO shall be the disposition entity for non-cash Coconut Levy Assets which
shall have been approved for divestment by the President and shall expeditiously sell,
alienate, or dispose of the same upon securing the favorable recommendation of the
Privatization Council pursuant to EO No. 323 (s. 2000) and other relevant laws, orders,
tules, and regulations, and the prior approval of the Committee. In the discharge of this
additional mandate, the PMO is hereby empowered to implement the actual marketing/
disposition program for the non-cash Coconut Levy Assets, to execute and deliver, on
behalf of the Government, the deeds of sale, contracts and other instruments as may be

necessary or appropriate to convey title to such assets to take possession of and conserve

Page 17 of 20


the non-cash Coco Levy Assets transferred to it, and engage external expertise as may be
necessary in the fulfillment of its tasks under this Act. Any sale and other mode of
privatization shall not be considered final unless favorably. recommended by the
Privatization Council and approved by the Committee.

c. The PMO shall, within three (3) months from the closure of its books at the end of
each fiscal year, submit a comprehensive annual report to the President, through the
Privatization Council, on the status of its privatization efforts and its disposition program
for the non-cash Coco Levy Assets, which report shall include a description of the assets
Privatized and disposed of, the purchasers, the consideration received, and the agreed
terms of payment.

SEC. 23. Proceeds from Privatization. - All proceeds and receipts or revenues
arising out of or in connection with the privatization of the Coconut Levy Assets shall be
deposited to the Trust Fund, after deducting reasonable expenses actually, directly, and
exclusively incurred by the PMO in connection with such privatization as stated under
Section 22 hereof.

SEC. 24. Allowable Investment. - The Committee shall manage the Trust Principal
with the skill, care, prudence, and diligence necessary under the circumstances that a
prudent person acting in like capacity and familiar with such matters would exercise in
the conduct of an enterprise of a like character with similar aims. Pursuant thereto and in
line with the basic principles of safety, growth, and liquidity, the Trust Principal shall only
be invested in any or all of the following:

a. Bonds, securities, promissory notes, or other evidence of indebtedness of the
Government of the Philippines, or in bonds, securities, promissory notes, and other
evidence of indebtedness to which full faith, credit, and unconditional guarantee of the
Republic of the Philippines is pledged;

b. Bonds, securities, promissory notes or other evidence of indebtedness of
government financial institutions or government corporations with acceptable credit or
guarantee; Provided, That, such investments shall be subject to a ceiling to be fixed by the

Committee in the implementing rules and regulations; and

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c. Deposits and loans and/or investments in any domestic bank doing business in
the Philippines and in good standing with the Bangko Sentral ng Pilipinas; Provided, That,
in case of such deposits, these shall not exceed at any time the unimpaired capital and
surplus or total private deposits of the depository bank, whichever is smaller; Provided,
Further, That the bank shall have been first designated as a depository for this purpose by
the Monetary Board of the Bangko Sentral ng Pilipinas; Provided Finally, That, such
investments shall be subject to a ceiling to be fixed by the Committee in the implementing

rules and regulations.

CHAPTER VII
FINAL PROVISIONS

SEC. 25. Suppletory Application of Republic Act No. 10149 and Executive Order
No. 323. -In the interpretation of the provisions of this Act, the provisions of RA No. 10149,
otherwise known as the “GOCC Governance Act of 2011,” shall apply suppletorily. EO No
323, entitled, “Constituting an Inter-Agency Privatization Council and Creating a
Privatization and Management Office under the Department of Finance for the Continuing
Privatization of Government Assets and Corporations,” shall also supply suppletorily.

SEC. 26. Implementing Rules and Regulations. - Within thirty (30) days from the
date of the constitution of the Committee, it shall formulate and promulgate the rules and
regulations for the proper implementation of this At, in consultation with the PMO.

SEC. 27. Congressional Oversight. - The Congressional Oversight Committee on
Agricultural and Fisheries Modernization shall exercise oversight functions over the
implementation of this Act. The financial review of the program in relation to its
performance indicators shall be subject to the oversight functions of the Joint
Congressional Oversight Committee on Public Enterprises.

SEC. 28. Separability Clause. - If any provision of this Act shall be declared
unconstitutional or invalid, the other provisions not affected shall remain in full force and
effect.

SEC. 29. Repealing Clause. - All laws, executive and administrative orders, rules
and regulations inconsistent with this Act are hereby repealed or amended accordingly.

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SEC. 30. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in at least two (2) newspapers of general circulation.
Approved.

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