Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No._30 1

REGISTRATION UNIT
i

Introduced by Representative RAMON VICENTE ANTONIO M. ROCAMORA

EXPLANATORY NOTE

“Owned by government in trust for all the coconut farmers...” is a favorite quote of most coconut farmers
and their advocates that have been embroiled in almost four decades of struggle for the recovery and
utilization of the coco levy funds.

According to a December 14, 2001 Supreme Court ruling, coconut levy funds, collected as they were by
the State using its police and taxing powers, is public in nature. Further, The Supreme Court in a
decision in 2012 indeed stated explicitly that the 24% shares in San Miguel Corporation bought with
the coco levy funds are "declared owned by the government to be used only for the benefit of all
coconut farmers and for the development of the coconut industry". However, it was also very clear in
the decision that the coco levy nionies are in the nature of taxes and cannot be transferred to private
hands. After the coconut farmers’ long march from Davao to Malacanang led by Kilus Magniniyog from
September 11 to November 26 in 2014, the Supreme Court issued its final entry of judgment with
regard to the 24% SMC-CIIF shares now valued at about P74 billion.

An enabling law that will clearly spell out the mechanisms so that this P74 billion can now be utilized
is long overdue. This bill seeks to do just that. Among its key features are:

1) It initially allots some P10 billion to jump-start projects and programs most needed to
provide social protection for coconut farmers and provide support in terms of capital and
equipment for the establishment of coco hubs in coconut producing municipalities.

2) Subsequent annual releases will just be from the interest earnings of the fund

~-3) A trust fund committee which shall manage the fund and establish policies on its utilization,
guided by a Coco Roadmap crafted by the inter-agency efforts with the strong participation of
coconut farmers shall be set up. The strong presence of coconut farmers in this committee is
also put in place.

4) Coco levy assets shall only be privatized shouid there be no use for them for the coconut
farmers in building their coco enterprises.

rece’

than that, it is a social justice issue.

Early passage of this bill is therefore earnestly requested.

HON. RAMON VICENTE ANTONIO M. ROCAMORA
Lobe District of Siquijor


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

301

House Bill No.

Introduced by Representative RAMON VICENTE ANTONIO M. ROCAMORA

AN ACT
ESTABLISHING THE COCONUT FARMERS AND INDUSTRY TRUST FUND AND
PROVIDING FOR ITS MANAGEMENT AND UTILIZATION

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

SECTION 1. Short Title. This Act shall be known as the "Coconut Farmers
and Industry Development Act.”

SEC. 2. Declaration of Policy. It is hereby declared the policy of the State to
attain the balanced, equitable, integrated and sustainable growth and development of
the coconut industry. Towards this end, the benefits due to coconut farmers,
especially the poor and marginalized, under various statutes shall be consolidated
and their delivery expedited.

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 No. 1468, which authorized the United
Coconut Planters Bank (UCPB) to utilize the surplus funds from the Coconut
Consumers Stabilization Fund (CCSF) 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
relating to the coconut and other palm oils industry in all its aspects and the
establishment of a research into the commercial and industrial uses of
coconut and other palm oil industry;



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(b) CIF Holding Companies refer to the fourteen (14) holding
companies, namely: Anglo Ventures Corporation; ACS Investors, Incorporated;
Arc Investors, Incorporated; AP Holdings, Incorporated; Fernandez Holdings,
Incorporated; First Meridian Development, Incorporated; Randy Allied
Ventures, Incorporated; Rock Steel Resources, Incorporated; Roxas Shares,
Incorporated; San Miguel Officers Corporation, Incorporated; Soriano Shares,
Incorporated; Te Deum Resources, Incorporated; Toda Holdings,
Incorporated; and 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) CIF - Oil Mills Group refers to the six (6) CIIF companies, namely,
Southern Luzon Coconut Oil Mills; Cagayan de Oro Oil Company, Incorporates
lligan Coconut Industries, Incorporated; San Pablo Manufacturing
Corporation; Granexport Manufacturing Corporation; and Legaspi Oil
Company, Incorporated, acquired by the UCPB using the CIF;
(@ CIF SMC Block Shares refer to the 33,133,266 shares of stock in SMC,
sequestered by the PCGG in April 1986 representing 31% of the total
outstanding capital stock of SMC;
(© Converted SMC Series 1 Preferred Shares refer to that portion of the
CIIF SMC Block Shares covering 753,848,312 preferred shares of stock in SMC
representing 24% of the outstanding capital stock of SMC;
(0) Coconut farmer refers to:
(1) Farmer-owner of a coconut farm, which is not more than five (5)
hectares, who:
(i) tills the land (owner-cultivator), or
(ii) does not till the land, but has control and supervision over
the cultivation of a farm which is not more than five (5)
hectares; and
(2) A non-owner of the coconut farm who is either a:
(i) leaseholder or tenant who tills or supervises the cultivation
of the farm; or
(ii) farm worker or laborer, whether seasonal or itinerant,
engaged in the harvesting of the nuts and processing of
copra as major means of livelihood.
(g) Coconut Levy Assets refer to any and all kinds of property, whether
real or personal, tangible or intangible, wherever situated, which have been
acquired through or otherwise funded by the Coconut Levy Funds, including
those assets that may be recovered in favor of the government, as well as the
fruits or income derived therefrom, including those acquired in exchange or
substitution thereof, including the following:
(1) the shares of stock in UCPB determined to be owned by the
Government;
(2) the CIIF Oil Mills Group;
(3) the CIIF Holding Companies; and



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(4) the Converted SMC Series 1 Preferred Shares.
(h) Coconut Levy Funds refer to various funds generated from levies,
taxes, charges, and other fees exacted or imposed pursuant to or in connection
with the sale of copra rececada or its equivalent in other coconut products,
and collected for the most part from coconut farmers, planters, millers,
refiners, processors, exporters, desiccators and other end-users of copra
rececada or its equivalent in other coconut products. These shall refer to any
and all of the following:

(1) the Coconut Investment Fund created under Republic Act No. 6260;

(2) the Coconut Consumers Stabilization Fund, later renamed as the
Coconut Industry Stabilization Fund, created under Presidential Decree
No. 276;

(3) the Coconut Industry Development Fund created under Presidential
Decree No. 582;

(4)the Coconut Industry Investment Fund created pursuant to
Presidential Decree No. 1468; and

(5) the Coconut Reserve Fund under Presidential Decree No. 1468 and
Presidential Decree No. 1842.

(i) Investment Guidelines refer to the investment management
guidelines, rules, procedures, and policies to be formulated by the Coconut
Farmers and Trust Fund Committee created under Section 11 of this Act, and
as may be amended from time to time, which shall provide the parameters for
investments of the Trust Income or any portion thereof, and shall include,
among others, asset allocation, criteria for selection of fund managers, and
required income from the fund, and other investment management threshold
requirements.

G) 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, and all income or interest derived therefrom as of the
effectivity of this Act and any other cash Coconut Levy Asset
deposited in the Bureau of the Treasury (BTr) and the UCPB as
administrator of the CIIF; any other cash Coconut Levy Asset
including amounts deposited in UCPB as Administrator of the CIIF;



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(2) any and all proceeds of privatization of the Coconut Levy Assets
remitted thereto by the Privatization and Management Office
(PMO), organized under Article III of Executive Order No. 323
(8.2001); 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.

ul

Audit and Reconveyance of Coconut Levy Assets

SEC. 4. Audit and Inventory of Coconut Levy Assets. Upon the effectivity of
this Act, the Presidential Commission on Good Government (PCGG), created under
Executive Order No. 1 (S.1986), 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 inventory of Coconut Levy Assets prepared and
submitted by the PCGG for the purpose of, among others, determining completeness
of the inventory, establishing the reasonableness of the asset valuation and tracing of
the flow of the coconut levy fund. The COA shall submit to the Coconut Farmers and
‘Trust Fund Committee created under Section 11 hereof its initial audit report within
one hundred twenty (120) days upon completion of the audit. However, further audit
may be undertaken after the initial audit, as necessary.

The Committee shall, within fifteen (15) days from its receipt of the audit
report, publish the same in at least two (2) newspapers of national circulation.

Nothing herein shall be construed as preventing the PMO, created under
Article Ill of Executive Order No. 323 (S.2001), from procuring a third-party
appraisal of any of the Coconut Levy Assets prior to or in the course of preparing the
privatization or disposition plans for the said assets.

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:

(a) reconveyance of the title of such asset to the Republic of the Philippines;

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

(©) deposit all cash assets in the Trust Fund.

Any provision of law to the contrary notwithstanding, the BTr and the UCPB
shall directly remit the initial Trust Principal to the Trust Fund.



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

itt
Coconut Farmers and Industry Trust Fund

SEC. 6. The Coconut Farmers and Industry Trust Fund. There is hereby
created a trust fund to be known as the Coconut Farmers and Industry Trust Fund,
herein referred to as the "Trust Fund," which shall consist of the Trust Principal and
the Trust Income. No portion of the Trust Fund shalll accrue to the general fund of the
National Government. It 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 farm workers as embodied in the
Coconut Farmers and Industry Development Plan prepared pursuant to Section 20
hereof.

SEC. 8. Capitalization of the Trust Fund. All assets and/or properties derived
from all coco 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 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.

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) The Trust Principal shall be preserved and maintained at all times and
only the Trust Income may be used: Provided, that an aggregate amount
not exceeding Ten Billion pesos (Php) of the initial Trust Principal may be
used during the first two years following the effectivity of this Act.

(b) The Trust Fund shall be disbursed only on the basis of the funding

requirement of the program, activity or project.
5



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(c) The Trust Fund may also be disbursed to pay for the 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; and

(d) No part of the Trust Fund shall be utilized to pay for the salary of PMO
personnel.

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 Authority (PCA), created under Presidential Decree 232 (5.1973), as
amended by Presidential Decree No. 1468 (S.1978).

SEC. 10. Designation of the Bureau of the Treasury as Depository of the
Trust Fund. The Trust Fund shall be deposited in the Bureau of the Treasury (BTr)
The BTr shall account for the Trust Fund in the manner provided by the Committee
and shall perform such duties as may be determined by the Committee.

Iv
Coconut Farmers and Industry Trust Fund Committee

SEC. 11. Creation of the Coconut Farmers and Industry Trust Fund
Committee. The Coconut Farmers and Industry Trust Fund Committee, hereinafter
referred to as the Committee, is hereby created under the Office of the President.

The Committee shall have the following powers and functions:

(a) coordinate and monitor the implementation of the Coconut Farmers and
Industry Development Plan;

(b) approve any allowable disbursement out of the Trust Fund;

(©) formulate the Investment Guidelines including the Prohibited
Investments;

(@) appoint a fund manager, if necessary, to handle the investment of the
Trust Principal;

(©) identify the Coconut Levy Assets that will be privatized, retained, or
abolished and submit its recommendation to the President; Provided that
said assets may no longer be useful to the coconut farmers and their
needs to develop their coco enterprise;

(f) approve the marketing and disposition program for the Coconut Levy
Assets approved for privatization;

(g) authorize the sale and other mode of privatization of Coconut Levy Assets
approved for privatization;

(bh) authorize the rehabilitation of Coconut Levy Assets approved for
privatization pending actual disposition;

(i) facilitate access by coconut farmers and their organizations from the most
poverty afflicted areas of the country to the services, programs and
benefits implemented pursuant to the Coconut Farmer and industry

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Development Plan. For purposes of this Act, those already accredited
farmers organizations need not go through another accreditation proc

()_ submit to the President reports and recommendations in connection with
its functions under this Act;

(&) appoint, transfer, suspend, or remove for cause, personnel of the
Committee, and fix their remuneration in accordance with the Salary
Standardization Law; and

() exercise such other incidental powers and functions as may be necessary
to attain the objectives of this Act.

(m)

SEC. 12. Composition. The Committee shall be composed of the following:

(a) Seven (7) representatives from the government who shall be serving in ex-

officio capacity:
(J) 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 Interior and Local Government (DILG);
(4) Secretary of the Department of Trade and Industry (DTI);
(5) Secretary of the National Anti-Poverty Commission (NAPC);
(6) Director-General of the National Economic Development Authority
(NEDA); and
(7) Administrator of the PCA.
(b) Six (6) representatives from the coconut farmers’ organizations who have
considerable experience and reputable track records, allocated as follows:
(4) two (2) representatives from Luzon;
(2) two (2) representatives from Visayas; and
(3) two (2) representatives from Mindanao

Within thirty (30) days following the effectivity of this Act, the PCA shall
promulgate a selection process of nominees as representatives of the coconut
farmers’ organizations in the Committee. The nominees of the coconut farmers’
organizations shall be validated and shortlisted by the PCA, in consultation with the
NAPC. The list of nominees shall be submitted to the President not later than sixty
(60) days from the start of the selection process.

The government representatives in the Committee shall serve only during
their respective terms in office, while the six (6) representatives from coconut
farmers organization shall each hold a term of one (1) year, unless sooner removed
for cause. Any of the representatives shall continue to hold office until the 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 alternates who shall be the officials next-in-rank to them
and their acts shall be considered the acts of their principals.



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SEC. 14. Meetings of the Committee. The Committee shall meet at least once
a month, or as often as deemed necessary and expedient to discharge i
responsibilities. The presence of at least a majority of the members of the Committee
shall constitute a quorum, and the concurrence of a majority of the members ps
at a meeting 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 on matters involving the following:
(a) any disbursement of funds involving more than Fifty million pesos
(PhP50,000,000.00);
(b) any proposed investment involving more than One hundred million pesos
(PhP100,000,000.00); and
(0) any disposition or privatization proposal involving more than Five hundred
million pesos (PhP500,000,000.00).
The Chairperson, if unavailable, may designate the Chairperson to convene
the Committee and preside over the Committee's meeting on behalf of the
Chairperson.

sent

SEC. 15. 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
the office, including acquiring shares in corporations that form part 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.

SEC. 16. Executive Director of the Committee. The President, upon
recommendation of the Committee, shall appoint an Executive Director who shall
exercise the following powers and functions:

(a) administer the programs approved or promulgated by the Committee;
(b) direct and supervise officials, employees, representatives and agents
for the Committee;

(©) 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;

(¢) administer oaths in all matters falling within the jurisdiction of the

Committee; and
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(exercise such other duties as may be vested by the Committee that are
consistent with the provisions of this Act.
The PCA shalll provide Secretariat support to the Committee.

SEC. 17. Cooperation with the Committee. The Committee may also call upon
any department, bureau, office, agency, and instrumentality of the government,
including government-owned and controlled corporations for any assistance it may
need in the discharge of its functions and responsibilities.

SEC. 18. 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. 19. Legal Counsel. The Secretary of Justice shall be the ex-officio counsel
to the Committee on legal matters.
v

Coconut Farmers and Industry Development Plan

SEC. 20. Preparation of the Coconut Farmers and Industry Development
Plan. An Ad Hoc Committee is hereby créated to be compased of the Secretaries of
the DA, the Department of Agrarian Reform (DAR), the DTI, the Department of
Science and Technology (DOST), the Department of Energy (DOE), the Department of
Public Works and Highways (DPWH), the DILG, the NAPC, the National Economic
Development Authority (NEDA), a representative from the farmers’ groups. The
Administrator of the PCA shall act as the Ad Hoc Committee's Chairperson.

The Ad-Hoc Committee, in consultation with the coconut farmers and
representatives of the coconut industry, shall indicate in an integrated coconut
industry strategy map the policies for the development and rehabilitation of the
coconut industry and shall prepare a five (5) year 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.

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

1) the increase in the income of coconut farmers and increase coconut

productivity including intercropping and livestock-raising;

2) the promotion of coconut-based enterprises including integrated

processing of coconut products and downstream products;

3) the provision of timely and critical support to coconut farmers

organization and development; and

4) the establishment of social protection programs that directly benefit

coconut farmers and farm workers, in case these social protection
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programs are not funded by an appropriations law or any other special
law, or where funding is insufficient.

The Plan shall provide an indicative funding requirement or allocation for the
implementation of any and all of the programs and projects to be funded by the Trust
Income, 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.

Within sixty (60) days from the effectivity of this Act, the Plan shall be
submitted by the Ad Hoc Committee to the Coconut Farmers and Industry Trust Fund
Committee who shall, in turn, submit the Plan to the President 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.

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.

VI
Privatization of the Coconut Levy Assets

SEC. 21. Privatization of the Coconut Levy Assets. The Committee shall
determine the Coconut Levy Assets that shall be privatized. For this purpose, the
Committee shall be guided by the following factors:

(a) the functions or purposes for which the entity was created are no longer
relevant to the State or no longer consistent with the national development
policy of the State;

(b) the functions or purposes of the entity duplicate or unnecessarily overlap with
functions, programs, activities or projects already provided by another
agency;

(©) the entity is not producing the desired outcomes, or is no longer achieving the
objectives for which it was originally designed and implemented;

(d) the entity is dormant or non-operational;

(©) the entity is involved in an activity which is best carried out by the private
sector; and

() the function, purpose, or nature of operations of any group of entities requires
consolidation under a holding company.

The Committee shall submit its recommendation to the President for
approval. The Committee shall also arrange for the transfer of the Coconut Levy
Assets approved for privatization to the PMO, unless the President, upon the

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recommendation of the Committee, designates another agency to preserve such
Coconut Levy Assets pending privatization.

SEC. 22. Additional Mandate of the Privatization and Management Office
(PMO). In addition to its powers and functions under Executive Order No. 323 dated
December 6, 2000, the PMO is authorized to dispose the Coco Levy Assets that have
been approved for privatization.

In the discharge of its mandate, the PMO shall:

(a) formulate and implement the marketing and disposition program after
securing prior approval of the Committee;

(b) take possession of and preserve such assets on behalf of the National
Government;

(©) _ execute and deliver, on behalf of the National Government, deeds of sale,
contracts, trust instruments, and other legally operative documents as may
be necessary or appropriate to convey title to, take possession of, and
conserve such assets;

(a) engage external expertise as may be necessary in the fulfillment of its tasks
under this Act; and

(©) adoptinternal rules and regulations.
Any and all sales and other modes of privatization or disposition shall not be

considered final unless and until approved by the Committee.

SEC. 23. Powers of the Privatization and Management Office. The PMO is
also empowered to enter into sales through public bidding, negotiated sale, lease, or
any form of divestment or transmission of rights over the Coconut Levy Assets,
Provided; That no Coconut Levy Asset shall revert to the previous owners or their
nominees or be sold to individuals who, as determined by final judgment of a court of
law, have mismanaged or diverted such assets.

Prior to the implementation of any privatization plan, the PMO shall exercise
the following powers:

(a) require anyone or the subject corporations to adopt and implement cost-
reduction measures to enhance the viability, and therefore the disposability of
the corporations to potential buyers, including measures requiring personnel
retrenchment plans or other forms of corporate downsizing;

(b) direct anyone or all of the subject corporations to submit to the PMO, within
fixed time-tables, such reports and information as the PMO may require in the
exercise of its functions under this Act; and

(c) cause the subject corporations to undergo merger, consolidation, spin-off, or
other corporate acts of reformatory nature as it may deem necessary or
desirable to expedite the disposition and privatization under this Act.

In all such cases, no corporate measure shall be implemented without the
approval of the Committee.

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Nothing herein shall be construed as authorizing the Committee or the PMO to
rehabilitate or allow investments of any and all Coconut Levy Assets transferred to
the National Government.

SEC. 24. Committee to Determine Transfer Value. The Committee is hereby
vested with full and complete powers and prerogatives to determine transfer values
and related valuations at which the Coconut Levy Assets shall be transferred and
conveyed to the PMO pursuant to the mandate of this Act and upon reasonable
consultation with a third-party appraiser: Provided, That any valuation approved by
the Committee for purposes of the transfer to the PMO shall not be deemed a
condonation, waiver, or extinguishment of any obligation by any party whose vested
rights may be impaired by such transfer.

SEC. 25. Remittance of Proceeds of Privatization. All proceeds or receipts
from the sale of Coconut Levy Assets shall be remitted to the Trust Fund.

SEC. 26. Reporting Requirements. The Committee shall, on a semi-annual
basis, submit to the President and to Congress a report on the status of disposition of
the Coconut Levy Assets, which shall include, among others, a description of the
individual assets disposed of, the purchasers thereof, the consideration received
therefor, and the agreed terms of payment.

The PMO shall, within three (3) months following the closure of books at the
end of each fiscal year, submit a comprehensive annual report duly approved or
endorsed by the Committee, to the President and Congress on the status of its
privatization efforts and its disposition program for the Coconut Levy Assets, which
shall include the items described in the immediately preceding paragraph.

SEC. 27. Retention and Dissolution of Coconut Levy Assets. The Committee
shall identify the Coconut Levy Assets that should be retained by the National
Government or reorganized or abolished, guided by the same standards mentioned
in Section 21 of this Act. The Committee shall submit its recommendation to the
President for approval.

Coconut Levy Assets that have been approved for retention shall be
transferred to such agency as may be designated by the President.

The Governance Commission on Government Owned or Controlled
Corporations (GCG), created under Republic Act No. 10149, shall implement the
dissolution of those Coconut Levy Assets that have been approved for abolition.

SEC. 28. Allowable Investments. 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 and 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:

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(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

(©) 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 first have
been 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.

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Final Provisions

SEC. 29. Suppletory on Applicability of Republic Act No. 10149 and
Executive Order. 323. In the interpretation of the provisions of this Act, the
provisions of Republic Act No. 10149, otherwise known as the "GOCC Governance Act
of 2011," and Executive Order 323, entitled “Constituting an Inter-Agency
Privatization Council (PC) and Creating A Privatization and Management Office
(PMO) Under The Department of Finance For The Continuing Privatization of
Government Assets and Corporations," except for Sections 2 and 3 of Article IV of E.
0. 323, shall apply suppletorily.

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

SEC. 31. Congressional Oversight. The Congressional Oversight Committee
on Agricultural and Fisheries Modernization (COCAFM) shall exercise oversight
functions over the implementation of this Act.

SEC. 32. Separability Clause. If any provision of this Act is declared invalid
or unconstitutional, the other provisions not affected by such declaration shall
remain in full force and effect.

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SEC. 33. Repealing Clause. All laws, executive and administrative orders,
rules and regulations inconsistent with this Act are hereby repealed or amended
accordingly,

SEC. 34. Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.
Approved,

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