Republic of the Philippines NI
HOUSE OF REPRESENTATIVES | cual Bun
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _2549

Introduced by HONORABLE LUIS RAYMUND F. VILLAFUERTE, JR.

EXPLANATORY NOTE

Next to rice, coconut is the country’s most important agricultural crop as evidenced by its
significant contribution to gross domestic product (GDP). The Philippine Coconut
Authority (PCA) states that there are 68 coconut producing provinces as identified by out
of 81 provinces nationwide and coconut lands are estimated to have covered some 3.3
million hectares of land, or nearly 30% of the total agricultural area in the country,

The introduction of the Article, The Long Climb towards Achieving the Promises of the
Tree of Life: A Review of the Philippine Coconut Levy Fund Policies, reports as follows:

It has played pertinent role in global competitiveness as the country's primary
agricultural export (Jadina, 2014). At 4% share to gross value added in agriculture
(GVA), coconut ranked fourth next to major staple foods and banana. Despite its
significant role in spurring growth in the economy, itis still regarded as an “orphan
child” of Philippine agriculture (Quieta 2012) due to the dismal investment to the
sector as compared to other crops.

Yet, for all the potential, viability and profitability of the coconut industry, estimates by the
PCA shows that there are 3.5 million coconut farmers who are among the nation’s
poorest. This is why it is high time to resolve the issues on the Coco Levy Fund that was
supposed to be utilized for the development of the coconut industry. This version of the
bill addresses the concerns of the President on safeguards and other matters that caused
the veto of the 17" Congress version.

In view of the foregoing, passage of this bill is earnestly requested.

LUI; Ml “LRAY” F. VILLAFUERTE, JR


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House BILL No. #549

Introduced by HONORABLE LUIS RAYMUND F. VILLAFUERTE, JR.

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

Section 1. Short Title. This Act shall be known as the "Coconut Farmers and Industry
Development Trust Fund Act."

Section 2. Declaration of Policy. \t is hereby declared the 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 |
Definition of Terms

Section 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 (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 related to the coconut industry in all its aspects and the
establishment of a research program into the commercial and industrial uses
of coconut.


CIIF Holding Companies refer to the fourteen (14) holding companies,
namely: (1) Anglo Ventures Corporation; (2) ASC Investors, Inc. ; (3) Arc
Investors, Incorporated; (4) AP Holdings, Incorporated; (5) Fernandez
Holdings, Incorporated; (6) First Meridian Development, Inc.; (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 CIIF Oil Mills Group to
acquire, hold and manage the shares of stocks of San Miguel
Corporation (SMC).

CIIF Oil Mills Group refers to the six (6) CIIF companies, namely: (1)
Southern Luzon Coconut Oil Mills; (2) Cagayan de Oro Oil Company,
corporate; (3) lligan Coconut Industries, Incorporated; (4) San Pablo
Manufacturing Corporation; (5) Granexport Manufacturing Corporation; and
(6) Legaspi Oil Company, Incorporated, acquired by the UCPB using the
CIF.

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 | 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.

Coconut Farmer refers to:
1. Farmer-owner of a coconut farm who:

) Tills the land (owner-cultivator); or
b) Does not till the land but has control and supervision over the
cultivation of a farm; and

2. A non-owner of the coconut farm who is either a:

a) Leaseholder or tenant who tills or supervises the cultivation of the
farm; or

b) Farm worker or laborer, whether seasonal or itinerant, engaged in
the harvesting of the nuts and processing of copra as major means
of livelihood.


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 but not limited to the following:

1. The shares of stock in the UCPB determined to be owned by the
Government;

2. The CIIF Oil Mills Group;

3. The CIIF Holding Companies;

4. The Converted SMC Series 1 Preferred Shares; and

5. Remaining ClIF SMC Block Shares or the proceeds of their sale.

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, dessicators, and other end users of copra
rececada or its equivalent in other coconut products. These shall refer to any
and all of the following:

The Coconut Investment Fund created under Republic Act (RA) No. 6260;
The Coconut Consumer Stabilization Fund, later renamed as the Coconut
Stabilization Fund, created under PD No. 276;

The Coconut Industry Development Fund created under PD No. 582;

The Coconut Industry Investment Fund created pursuant to PD No. 1468;
and

The Coconut Reserve Fund under PD No. 1468 and PD No. 1842.

a ao No

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,
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.

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

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 the Treasury (BTr)
and the UCPB as administrator of the CIIF;

2. Any and all proceeds of privatization of the Coco Levy Assets remitted
thereto by the Privatization and Management Office (PMO) organized
under Article Ill 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 Il
Audit and Reconveyance of Coconut Levy Assets

Section 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, disbursement, 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 completeness of said inventory, the existence of the subject assets,
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 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 observations 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 national circulation.

Section 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
c. Deposit all cash 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, rules,
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 Ill
Coconut Farmers and Industry Development Trust Fund

Section 6. The Coconut Farmers and Industry Development 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
the purposes of privatization, in which case the proceeds of such privatization shall
form part of the Trust Fund.


Section 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.

Section 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.

Section 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. 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

C. 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 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 penal laws. Disbursements of the funds should
be done in accordance with the Government Accounting Manual and all other related
laws, rules, and regulations.

Section 10. Designation of the Bureau of the 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:

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;

c. 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 Trust Fund
Committee

Section 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:

a. Coordinate and monitor the implementation of the Coconut Farmers and
Industry Development Plan;

b. Approve any allowable disbursement out of the Trust Fund pursuant to
Section 14 of this Act;

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

d. 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 ts recommendation to the President for approval;

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

g. After obtaining the approval of the President, 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. Submit reports and recommendations to the President in connection with
its functions under this Act; and

j. Exercise such other incidental powers and functions as may be
necessary to attain the objectives of this Act.

The PCA shall provide Secretariat support to the Committee.

secon 12. Composition. The Committee shall be composed of the following:
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 (DTI);
4. Secretary of the National Economic and Development Authority
(NEDA);
5. Administrator of the PCA; and
6. Arepresentative from the Office of the Executive Secretary.

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.

c. 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
respective 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.

Section 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.

Section 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 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 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

c. Alldispositions 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.

Section 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.

Section 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 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.

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

Section 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;


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;

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.

Section 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.

Section 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.

Section 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

Section 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 the 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, 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 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.

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;

c. Rehabilitation and modernization of the coconut industry towards global

competitiveness;

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

a


programs are not funded by an appropriations 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.

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.

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

Section 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, rules, 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 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.

Section 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.

Section 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, 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

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 Pro

Section 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
apply suppletorily.

Section 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 Act, in consultation with the PMO.

Section 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.

Section 28. 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.

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

Section 30. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.