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Republic of the Philippithes
HOUSE OF REPRESENA’
Quezon City

SEVENTEENTH CONG!
First Regular Session

2839 Bus ©

House Bill No.

Introduced by AKBAYAN Representative Tomasito S. Villarin

EXPLANATORY NOTE

Around 70% of poor Filipinos populate the rural areas. Of this figure, 60%
are situated in coconut-producing areas that receive meager government
assistance, compared to other agricultural crop sectors.

‘There are around 3.5 million coconut farmers in the country. 1.9 million of
them are farm workers, subsisting on roughly Php 41.00 per day.

Last January 2012, the Supreme Court issued a decision on Civil Case No.0033 (G.R. Nos.
177857-58 and 178193) holding that “the Coconut Industry Investment Fund (CIIF) Block
of San Miguel Corporation (SMC) shares of stock totaling 33,133,266 shares as of 1983
together with all dividends declared, paid and issued thereon as well as any increments
thereto arising from, but not limited to, exercise of pre-emptive rights 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, and ordered reconveyed to the government”.

The decision is a stepping stone in the government's social justice quest for coconut
farmers after decades long of historical inequities where millions of coconut farmers
suffered. Clearly, the coconut levy funds are the rightful owner of the fund. However,
there is a need to define how the funds can be effectively be used by small coconut
farmers.

Among the key features of this bill are:

1) It initially allots 10% of the Trust Principal 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.

Coco levy assets shall only be privatized should there be no use for them for the

coconut farmers in building their coco enterprises.

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It is time to correct the historical injustices against our coconut farmers.

Early passage of this bill is therefore earnestly requested.

TOMASITO S. VILLARIN


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No._2883

Introduced by AKBAYAN Representative Tomasito S. Villarin

AN ACT
ESTABLISHING THE COCONUT FARMERS 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 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.

1. 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

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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;
(b) CHF 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) CMF - Oil Mills Group refers to the six (6) CIIF companies,
namely, Southern Luzon Coconut Oil Mills; Cagayan de Oro Oil
Company, Incorporated; Iligan Coconut Industries, Incorporated; San
Pablo Manufacturing Corporation; Granexport Manufacturing
Corporation; and Legaspi Oil Company, Incorporated, acquired by the
UCPB using the CIIF;
(d) 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;
(e) 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;
(9 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 CIF Oil Mills Group;

(3) the CIIF Holding Companies; and

(4) the Converted SMC Series 1 Preferred Shares.
(i) 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 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.

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

(kK) 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
CIF;

Q) 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
(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.

Il. 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 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 (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.

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.

Ii. Coconut Farmers Trust Fund

SEC. 6. The Coconut Farmers Trust Fund. There is hereby created a
trust fund to be known as the Coconut Farmers 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 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.

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 percent (10%) 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.

(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. For the avoidance of doubt,

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regular programs by the Philippine Coconut Authority, research and
development, market promotion, farm-to-market roads, and direct lending,
shall be funded through regular appropriations.

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 (BT). 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 Trust Fund Committee

SEC. 11. Creation of the Coconut Farmers Trust Fund Committee.
The Coconut Farmers 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 as prepared pursuant to Section 20
hereof.;

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

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

(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 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;

(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 Farmer and
Industry Development Plan. For purposes of this Act, those already



accredited farmers organizations need not go through another
accreditation process;

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

(k) 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.

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

(a) Six (6) representatives from the government who shall be serving in

ex-officio capacity:

(1) Office of the President as Chair;

(2) Secretary of the Department of Agriculture (DA) as Vice-Chair;

(3) Secretary of the Department of Finance (DOF);

(4) Secretary of the National Anti-Poverty Commission (NAPC);

(5) Director-General of the National Economic Development Authority
(NEDA); and

(6) 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

(c) One (1) representative from a civil society organization with

considerable experience and reputable track record.

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

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farmers organization and one (1) representative from the civil society
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.

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 shall constitute a quorum, and the concurrence of
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 disbursement of funds involving more than Fifty million pesos
(PhPSO,000,000.00);

(b) any proposed investment involving more than One hundred million pesos
(PhP100,000,000.00); and

(c) 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.

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

9


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) execute, administer and implement the plans and 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;

(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.

‘The PCA shall 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.

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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 Department of Agriculture (DA), the Department of
Agrarian Reform (DAR), the Department of Trade and Industry (DTI), the
Department of Science and Technology (DOST), the Department of Energy
(DOE), the Department of Public Works and Highways (DPWH), the Department
of Interior and Local Government (DILG), the National Anti-Poverty Commission
(NAPC), the National Economic Development Authority (NEDA), and at least
three (3) representatives from the farmers’ groups, one each from Luzon,
Visayas and Mindanao, and one civil society organization working with
expertise on the industry. 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. The coconut industry strategy map shall be made basis of a
five (5) year plan of programs, activities and projects for direct benefits of
coconut farmers 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
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

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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 ‘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;

(e) 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

12


Assets approved for privatization to the PMO, unless the President, upon the
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;

(@)__ 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. 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;

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(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.

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.

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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:

(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

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ceiling to be fixed by the Committee in the implementing rules and
regulations.

VU. 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.

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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