} HOUSE OF REPRESENTATIVES
RECEIVED

Republie of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 164

LICIANO R. BELMONTE, JR.

EXPLANATORY NOTE

The Coconut Levy Funds generated from levies, taxes, charges, and other fees
imposed from coconut farmers, planters, millers, refiners, processors, exporters,
desiccators and other end users of copra rececada or its equivalent have been
deposited with the Bureau of ‘Treasury and available for use for the benefit of all
coconut farmers and for the development of the coconut industry.

Through the years, coconut farmers have been longing, to use the coconut levy
funds to improve their products, trees and plantations. Sadly, the funds have been
embargoed by cases filed by individuals and corporations who see it fit to withhold
these from the farmers. Thankfully, the Supreme Court in 27 November 2014, ruled
that the said funds are declared conclusively owned by the Republic of the
Philippines to be used only for the benefit of all coconut farmers and for the
development of the coconut industry, and ordered reconveyed to the Government.

In 2015, former President Benigno S. Aquino IIL, issued Executive Order No
179 and 180, requiring the inventory and privatization of coco levy assets, and
ordering the reconveyance and the utilization of coco levy assets for the benefit of
the coconut farmers and the development of the coconut industry, respectively,
However, the Supreme Court issued a Temporary Restraining Order on both
Executive Orders.

The coconut famers have been waiting for thirty years, but funds remain
unused. It is time that we assist our coconut farmers through the efficient use of the
interest ineome of the fund and ensure the sustainability of the same.

In view of the foregoing, the immediate approval of this bill is requested.

Gib fo EX,

FELICIANO R. BELMON fH; JR.”


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO, 164

Introduced by REP. FELICIANO R. BELMONTE, JR.

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

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

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

Coconut Farmers

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 the marginalized, under various statutes shall. be
consolidated and their delivery expedited

CHAPTER 1
DEFINITION OF TERMS

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

(a) Coconut Industry Investment Fund (CUE) 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 (CIDR) 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;



ies refer to the fourteen (14) holding companies,
Corporation; (2) ACS Investors, Incorporated; (3) Arc
Holdings, Incorporated; (5) Fernandez. Holdings,
Incorporated; (6) er Development, Incorporated; (7) Randy Allied
Ventures, Incorporated; (8) Rock Steel Resources, Incorporated; (9) Roxas Shares,
Incorporated; (10) San Miguel Officers Corporation, Incorporated; (11) Soriano
Shares, Incorporated; (12) Te Deum Resources, Incorporated; (13) Toda Holdings,
Incorporated; and (14) Valhalla Properties Limited, Incorporated, created by the CIF
Oil Mills Group to acquire, hold and manage the shares of stocks of San Miguel
Corporation (SMC);

@) CL
namely: (1) Anglo V
Investors, Incorp

() CIIF Oil Mills Group refers to the six (6) CIIF companies, namely: (1)
Southern Luzon Coconut Oil Mills; (2) Cagayan de Oro Oil Company, Incorporated;
(3) ligan Coconut Industries, Incorporated; (4) San Pablo Manufacturing
Corporation; (8) Granexport Manufacturing Corporation; and (6) Legaspi Oil
Company, Incorporated, acquired by the UCPB using the CIIF;

(d) CIIF 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;

(¢) Converted SMC Series 1 Preferred Shares refer to that portion of the CIIF 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;

(P 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) Anon-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

2


Government, as well as the fruits or income derived
‘ired in exchange or substitution thereof, including

favor
those a:

may be recovere:
therefrom, inclu
the following:

(1) The shares

Government;

2) The CIIF Oil Mills Group;

(3) The CIF Holding Companies; and

(4) The Converted SMC Series 1 Preferred Shares.

:k in the UCPB determined to be owned by the

(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

(8) The Coconut Reserve Fund under Presidential Decree No. 1468 and
Presidential Decree No. 1842.

@) Investment guidelines refer to the investment management guidelines, rules,
procedures, and policies to be formulated by the Coconut Farmers and Industry
‘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, required income from the fund, and other
investment management threshold requirements.

(i) 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;
any other cash Coconut Levy Asset deposited in the Bureau of the
Treasury (BTz) and the UCPB as administrator of the CIF; and any
other cash Coconut Levy Asset including amounts deposited in the
UCPB as Administrator of the CHE;


all proceeds of privatization of the Coconut
eto by the Privatization and Managem:

of privatization of any or all properties or assets convey
person, group or entity to the Committee, from time to time,
as provided in Section 8 hereof.

CHAPTER IL
AUDIT AND RECONVEYANCE OF COCONUT LEVY ASSETS

SEC. 4. Audit and Inventory of Coconut Levy Assets. ~ Upon the effectivity of this
Act, the PCGG, created under Executive Order No. 1 (Series of 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 Industry 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 III of Executive Order No. 323 (Series of 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.


an audit to determine compliance with pertinent laws,

COA shall cond!
veyance of the Coconut Levy Assets to the Republic of

rules and regulations on re:
the Philippines.

CHAPTER I
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,
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 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. 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. - 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.

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

requirement of the program, activity or project;


ad may also be disbursed to pay for the

for the administration, monitoring, vita

her necessary activities for the effective perfo:
functions un this Act; and

(d) No part of the Trust Fund shalll be utilized for the payment of
other personnel benefits.

(©) The Tru:
Committe
services, a

Alll releases from the Trust Fund approved by the Committee shall be released
directly to the implementing agencies: Provided, That coconut productivi
developmental programs and projects shall be implemented by the Philippi
Coconut Authority (PCA) created under Presidential Decree No. 232 (Series of 1973),
as amended by Presidential Decree No. 1468 (Series of 1978).

SEC. 10. Designation of the Bureau of the Treasury as Depository of the Trust Fund.
~ The Trust Fund shall be deposited in the 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.

CHAPTER 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;

(c) Formulate the Investment Guidelines including the Prohibited
Investments;

(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 recommendation to the President;

( 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;

(h) 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 Farmers and Industry
Development Plan. For purposes of this Act, those already accredited
farmers organizations need not go through another accreditation process;


connection with

President reports and recommendations in
under this Act; and
-y other incidental powers and functions as may be necessary

objectives of this Act.

(k) Exerc’

to attain
SHC. 12. Composizion.- The Committee shall be composed of the following:
(a) Seven ‘esentatives from the government who shall be serving in ex

officio capacity:
(1) The Secretary of the Department of Agriculture (DA) as

Chairperson;
(2) The Secretary of the Department of Finance (DOF) as Vice
Chairperson;
(3) The Secretary of the Department of the Interior and Local
Government (DILG);

(4) The Secretary of the Department of Trade and Industry (DTI);
(8) The Secretary of the National Anti-Poverty Commission (NAPC);
(6) The Director-General of the National Economic and Development
Authority (NEDA); and
(7) The Administrator of the PCA.
(b) Six (6) representatives from the coconut farmers’ organizations who have
considerable experience and reputable track records, allocated as follows:
(1) 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’ organizations shall each hold a term of one (1) year, unless sooner removed
for cause. 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 alternates who shall be the officials next-in-rank to them
and their acts shall be considered the acts of their principals.

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 its
responsibilities. The presence of at least a majority of the members of the Committee

7


2 concurrence of a majority of the me present
at a meeting at which a quozum exists shall be adequate for any decision by the
Committee: Provided, That the ap>roval 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
(P50,000,000,00);
(b) Any proposed investment involving more than one hundred million
pesos (P100,000,000.00); and
(0) Any disposition or privatization proposal involving more than five
hundred million pesos (P500,000,000.00)..

shall constitute a quorun

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. 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;

(c) 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;

(@) Keep and maintain official records and reports of the proceedings of the
Committee;

(c) 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.


ie Secretariat support to the Com:

with the Committee. - The Committee may also call upor
“ice, agency, and instrumentality of the gov ‘
d and -controlled corporations for any assistance
nctions and responsibilities.

SEC. 17.
any departmer
including government
need in the discharge

SEC. 18. Accounting and Auditing. - The Commitiee 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
of the Committee on legal matters.

CHAPTER V
COCONUT FARMERS AND INDUSTRY DEVELOPMENT PLAN

SEC. 20. Preparation of the Coconut Farmers and Industry Development Plan. - An
Ad Hoc Committee is hereby created to be composed 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 NEDA, and 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, every five (5) years, 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. The
Plan shalll be consistent with the Philippine Development Plan and shalll be subject to
mandatory review every year.

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

(a) The increase in the income of coconut farmers and increase coconut
productivity including intercropping and livestock-raising;

(b) The promotion of coconut-based enterprises including integrated
processing of coconut products and downstream products;

(Q) The provision of timely and critical support to coconut farmers
organization and development; and


"it of social protection programs that directly benefit
and farm workers, in case these social protection
10% funded by an appropriations law or any other special
ding is insufficient.

The Plan shal! 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 which 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.

CHAPTER 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 the functions, programs, activities or projects already provided by
another agency;

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

(a) The entity is dormant or nonoperational;

(c) The entity is involved in an activity which is best carried out by the

private sector; and
(6), The function, purpose, or nature of operations of any group of entities

requires consolidation under a holding company.

10


nit its recommendation to the President
so arrange for the transfer of the Coconut |
‘on to the PMO, unless the President, upon

The Commitiee s
approval. The Committee
Assets approved for pr
recommendation of the Comm:
Coconut Levy Assets pending p:

tization.

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 Coconut 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;

(c) 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;

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

(e) Adopt internal 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 (PMO). - 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 timetables, such reports and information as the PMO may
require in the exercise of its functions under this Act; and

1


In all such cases, no corporate measure shall be implemented without the

approval of the Committee.

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 Nationa! 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.

12


on Government-Owned or Controlled
public Act No. 10149, shall implement the
ots that have been approved for abolition.

dissolution of those Coconut

iments. - The Committee shall manage the Trust
Principal with the skill, care, prudence, and diligence necessary under the
circumstances that a prudent pezson 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:

(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 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 VIT
FINAL PROVISIONS

SEC. 28. Allowable im

SEC. 29. Suppletory on Applicability of Republic Act No. 10149 and Executive
Order No. 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 No. 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 Executive Order No. 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.

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SEC. 31. Cong:
on Agricultural an

n of this Act. The financial review of the program
ators shall be subject to the oversight func'
Committee on Public Expenditures.

ise. ~ If any provision of this Act is declared invalid or
isions not affected by such declaration shall remain

SEC. 32. Separair
unconstitutional, the oth:
in full force and effect.

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, Effictivity. - 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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