29 W003”)
Republic of the Philippines P
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

1938

HOUSE BILL NO.

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

This bill is a re-filing of the bill filed on February 10, 2011 which the House, through
series of technical working group meetings with various government agencies concerned,
came into a Substitute Bill on January 30, 2012.

‘Although the government and stakeholders are united in their cause to save the
coconut industry, a divergence in action leads to cosmetic and fragmented solutions. A
salient way of bringing about fundamental and comprehensive change is restructuring the
policy and institutional framework, strengthening the very scaffolding on which the industry
‘operates. And the core of such an initiative is legislating a Coconut Industry Development
‘Act which will provide the overall strategic guidance to the industry and the Philippine
Coconut Authority (PCA).

The coconut industry is one of the biggest agricultural industries in the country. It
covers the 3.562 million hectares or 26% of total agricultural land in the country. An average
of 15.2 billion or coconuts is produced in a year. Carrying over 24 million direct and indirect
stakeholders in over 69 provinces in the country, there is a genuine need for a strong and
robust policy and institutional foundations to support and guide the multitude of activities,
operations, and interactions with the industry.

Governmental issues, regulatory challenges, national and international economic
realities, and scientific reliability are but a few of the pressing concerns that need to be
addressed by the institution at the helm of the industry. But corollary to the responsibilities
that the institution need to fulfil are capacitating powers to effect change. In this, the PCA’s
charter is undeniably deficient.

Presidential Decree 232 which created the Philippine Coconut Authority was enacted
back in 1973. Subsequent legislations also touched on the PCA charter, the last being
Presidential Decree 1468 in 1978. The existing law, thus, reflects the realities of around 35
years ago. As such, the meat of the provisions of PD 1468 was mere monitoring. But the


situation of the coconut industry and the conditions of the farmers then are vastly different
from today. What we need now are corporate powers, regulatory powers, and a strong
research and development strategy, among others.

As a result of the outdated charter, the Philippine Coconut Authority carries its
‘enormous tasks on feeble arms. It is mandated to serve as platform in addressing the gaps
that continue to erode the positioning of the Philippine coconut industry in the global arena
but its limited and obsolete powers restrict their policy actions in bringing into being the
necessary transformations both at the policy and operational levels.

This measure, thus, aims to revitalize the coconut industry primarily by equipping
the PCA with solid and multifaceted mandate, which focuses on developmental,
governmental, regulatory, research and development, and corporate powers and functions.
Furthermore, acknowledging the importance of the key stakeholders ~ the coconut farmers,
the measure provides extension services and marketing assistance to boost their yield and
expand their income. It also provides intermediation and arranging services for investment,
financing, and trade, among others. The bill also presents measures on rehabilitation and
fertilization of coconut trees.

A highlight of the bill is the removal of corporate restriction of PCA to make it a
profitable, sustainable, and development-oriented agency. Right now, PCA only has a
subsidy of around P939.750 million, equivalent to a mere 1.86% of the total allocation of the
Department of Agriculture for FY 2013. Despite its best effort to implement programs and
projects for the industry, PCA can only do so much with its meager budget.

The bill also includes for potent provisions on research and development to cultivate
a culture of scientific excellence and professionalism in its agricultural and industrial
research and establish credence to the initiatives, findings, and innovations of PCA. The
expanded powers also allow for the development and propagation of new discoveries and
‘technologies which we can capitalize on. This would also allow us to make the most out of
evolving opportunities especially with the underdeveloped niches of the industry.

Another key feature of the bill is the inclusion of palm-based products and by-
products, particularly palm oil, seeing the need to provide policy direction and support to
the industry. Although it is acknowledged that oil palm and other palm trees and its
products/by-products are under the PCA’s supervision, it is not explicitly stated and detailed
in the existing PCA charter, inadvertently putting it on the sidelines of policy making.

The reorganization of PCA also allows for more representation from the farmers,
processors, traders, researches, scientists and academe comprising seven board seats out of
the 11 board seats. Moreover, since coconut is a long-gestating crop, itis also prudent to fix
the term of the administrator of PCA to ensure the full implementation of the policies and
programs of the agency. Hence, this measure fixes the term of the administrator to six
years.

‘A competitive market and a plethora of socio-economic issues affecting the coconut
industry call for lasting, substantial, and comprehensive action. The band aid approaches



have done more damage than good the past decades, and as changes in the industry and
the environment in which it operates are becoming even more competitive and dynamic, it
is high time that we respond judiciously and assiduously.

In view of the foregoing, the passage of this measure is fervently sou

ATTY. si 5. GARIN
‘AAMBIS-Owa Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

1998

HOUSE BILLNO.

Introduced by Representative Sharon S. Garin

ANACT
REVITALIZING THE COCONUT INDUSTRY, APPROPRIATING FUNDS
‘THEREFOR AND FOR OTHER PURPOSES

ARTICLE 1
GENERAL PROVISIONS

SECTION 1. Short Title. This Act shall be known as “The Coconut Industry Development Act
of 2013.”

SECTION 2. Statement of Policy. It is the policy of the State to recognize the essential role of
coconut as a strategic, indigenous, replenishable and renewable source of livelihood for a
‘great number of people. Towards this end, the State shall promote the rapid, steady and
continuous integrated development and growth of the coconut industry in all its aspects
and ensure that the coconut farmers, farm workers, processors, lessees and tillers, and their
families, shall become direct participants in, and beneficiaries of, such development and
growth thereby increasing their income and uplifting their quality of life.

‘As used in this Act, “coconut” shall encompass coconut trees and other palm trees,
palm-based products and by-products, including but not limited to palm oil.

SECTION 3. Goals and Objectives. Pursuant to the above-mentioned policy, the effort of
‘government shall be directed towards the following goals and objectives:

a) Promote the steady, accelerated, and orderly development of the coconut
industry consistent with the agrarian reform policy of the government;

b) Develop and establish the coconut farming systems including but not limited to
the establishment of model coconut farms;


¢) Hasten and advance industrialization in the coconut industry and the
diversification and proper utilization of coconut products and by-products, and
oil palm products and by-products;

d) Promote the effective utilization and marketing of coconut products and by-
products and oil palm products and by-products in the domestic and foreign
markets and preserve the competitiveness and reliability of the country as a
major producer and supplier of said products, by establishing national standards
acceptable in the international market;

e) To increase production by expanding the planting and replanting program of
coconut trees in strategic areas identified as having the most potential and the
rehabilitation and fertilization of existing coconut trees;

f) Conduct scientific researches and investigations in all areas pertaining to
agricultural, industrial, marketing and socio-economic aspect of the coconut
industry and encourage the participation of small farm holders in research and
technology;

g) Encourage and promote the organization of coconut farmers cooperatives,
associations, and organizations and provide them credit and financing schemes;

h) Generate and disseminate information and communication to farmers,
producers and other sectors to ensure the appreciation and adoption of
appropriate technology and practices, inventions, as well as the proper
awareness and correct understanding of issues and development in the coconut
industry; and

i) Coordinate and integrate all efforts of various agencies of government and
provide general direction for the steady and orderly development of the
industry.

ARTICLE
POWERS AND FUNCTIONS OF THE PHILIPPINE COCONUT AUTHORITY

SECTION 4. Philippine Coconut Industry Development Authority. To implement the policy
and objectives of this Act, there is hereby created and established a corporate body known
as the Philippine Coconut Industry Development Authority (PHILCIDA), hereinafter referred
to as the Authority.

SECTION 5. Powers and Functions. The Authority shall exercise the following core powers
and functions:

2) Developmental Power and Function
1) Formulate and adopt a general program of development geared towards
increased farm productivity, through planting or replanting of suitable
seedling varieties, rehabilitation and fertilization of coconut, integrated


coconut-based farming systems and product processing, and whenever
necessary, the construction of related support and infrastructure facilities.
For this purpose, the Authority shall adopt a special program to maximize the
yield of small coconut farmers and their farm families particularly those
farms covered by the agrarian reform program of the governmer

b) Research and Development Powers and Functions

¢)

1) Undertake scientific researches and investigations on crop and varietal
improvement, pests and diseases, agronomy and mineral nutrition, coconut
‘wood utilization, virology and biochemistry and epidemiology of cadang-
cadang, and such other similar studies on varietal and crop improvement of
general or local suitability;

2) Undertake scientific researches and investigations on food, non-food
products and by-products including bio-diesel, directly or in collaboration
with other public agencies or the private sector;

3) Conduct intensive studies and data research, establish and maintain a
database of primary, accurate and reliable information on coconut culture,
production, pricing capacity, marketing, inventories as well as scientific thesis
‘and treaties in coordination with other government offices, the private
‘sector and international agencies and bodies;

4) Establish, maintain and operate such number of research centers and
experiment stations, including laboratories, seed gardens, nurseries, pilot
farms and industrial facilities as may be necessary to undertake extensive
research in coconut pests and diseases, improvement of copra, manufacture
of coconut products and by-products or oil palm products and by-products,
and the greater utilization of the coconut for traditional and non-traditional
uses;

5) Construct, invest, establish and operate integrated coconut centrals,
processing plants and integrated processing mills and other support facilities
in aid of its research and development function;

6) Secure or obtain registration of intellectual property rights on any
discoveries, new process, or utilization involving coconut products and by-
products or oil palm products and by-products resulting from its research
and studies;

7) Develop, package, utilize, promote, and transfer viable techniques and
technologies: Provided, however, That an appropriate royalty or
technological transfer fee shall be imposed, the amount of which shall be
determined by the PHILCIDA Board of Directors;

8) Purchase or fabricate such machineries, material, equipment and supplies as
may be necessary to execute successfully such researches, investigations and
experimental work as provided under this Act on its own or in partnership
with other agencies.

Regulatory Powers and Functions

1) Regulate the marketing and the exportation of coconut products and by-
products and oil palm products and by-products to conform with quality or
food standards recognized by both the domestic and international market;



2) Take samples and conduct examination of any copra, coconut products and
by-products and oil palm products and by-products that are subject to
domestic and international standards; to conduct laboratory analysis to
determine the chemical characteristics of moisture content, contaminants,
including the presence of toxin and other contaminants and issue the
necessary commodity clearance and export permit: Provided, That the
Authority may withhold the issuance of such clearance or permit, or suspend
‘or cancel any clearance or permit already issued in case of violation by the
holder of any provision of this Act or rules and regulations duly promulgated
by the Authority;

3) Develop and recommend for the adoption of the Bureau of Plant Industry
and other concerned government agencies measures and methodology
quarantine for coconut products and by-products and oil palm products and
by-products; to impose such restrictions in the transport movement or
handling of the same in accordance with such standards and quarantine
procedure determined by the Authority;

4) Order the closure of any mill, refinery, processing firm, copra warehouse or
any place or building where coconut products and by-products or oil palm
products and by-products are stored or to intercept and seize any vehicle or
ship or vessel carrying or transporting coconut products and by-products or
oil palm products and by-products where there is reasonable ground to
believe that the owner, possessor or person or persons in control of such
place, building, vehicles, ship or vessel, of such products have violated the
provisions of this Act or any rules and regulations promulgated thereto in a
manner that is prejudicial and detrimental to the coconut industry, or the
consuming public.

d) Corporate Powers and Functions

1) Create subsidiaries or enter into partnerships or joint ventures with any

public or private foreign or local entity, natural or juridical, and acquire, own

‘or hold shares of stock or interest therein for the purpose of fully utilizing the

commercial value of pioneer and new technology generated in the industry,

or of financing the manufacture, on commercial scale of coconut products

and by-products or oil palm products and by-products: Provided, That such

subsidiary, partnership, joint venture, which the Authority is authorized to

create, shall be governed by the provisions of general laws applicable to

corporations and such entities: Provided, further, That after such partnership,

subsidiary, or joint venture with private Filipino citizens or entities authorized

to be created shall have become fully viable for commercial operation, and

the Authority has recovered its investments or contributions, the Authority

shall immediately divest itself of its interest over the partnership, subsidiary,

or joint venture in favor or any private person or entity. For purposes of this

Paragraph, the Authority shall make studies and investigations of the

enterprises and projects for which the loans, contributions and subscriptions

to the capital of the enterprise or investments mentioned are needed, and
determine the advisability of financing the same;



e)

2) Lease real estate, lands and interest in lands owned and acquired by the
Authority including buildings or other structures with their appurtenances in
pursuance of any partnership or joint venture to implement its technology or
developmental projects and program:

3) Borrow, raise or obtain funds; to issue bonds and other instruments of
indebtedness; or to enter into any financial or credit arrangement from any
financial or lending institutions, local or foreign, in order to support or carry
‘out its objectives and purposes, subject to pertinent laws governing public
debts and expenditures, and when necessary, subject to the approval of the
president;

4) Receive grants, subsidies, donations or contributions from corporations,
trusts, foundations, associations and other sources from any private or
government office, agency or corporation, local or foreign;

5) Purchase, own, lease, hold, or otherwise acquire real estate, lands and
interest in lands and to own, hold, improve, develop, and manage any real
estate so acquired and to erect, rebuild, enlarge, alter or improve buildings
or other structures with their appurtenances on any lands so owned or
occupied;

6) Purchase, own, lease, hold, or otherwise acquire such machineries,
equipment, tools, materials, supplies, or other parts as may be necessary,
convenient or appropriate for any of the purposes for which the Authority is
formed;

7) Invest and deal with the funds of the Authority in stocks, bonds and other
secured collaterals with skill, care, prudence and diligence, in order not to
make such funds idle and unproductive pending their full utilization for the
principal objects and purposes for which the Authority has been organized:
Provided, however, That such investment or investments shall be subject to
the approval of the President.

Extension Services and Market Development Powers and Functions

1) Render training, extension service programs and disseminate information to
coconut farmers, farm workers and processors relative to production
technology, marketing systems, entrepreneurial and other technical skills
and values, attitude formation and socio-economic development strategies;

2) Promote, encourage and assist coconut planters, farmers, processors and
workers organize themselves into associations and cooperatives, equip them
with greater capability of marketing their products, and assist them obtain
more credit facilities; to register and accredit such associations and
cooperatives for purposes of participation in the developmental programs of
the Authority: Provided, That the Authority shall not directly or indirectly
influence the farmers in the exercise of their choice or selection of

jidates or leaders in the organizations;

3) Provide, in coordination with the private sector, a system of accreditation of
association of traders, millers, desiccators, farmers, exporters and end-users
of coconut products and by-products and oil palm products and by-products;

4) Undertake or participate in trade missions to obtain better preferential
trading arrangements with importing countries, and enter or otherwise



|

Participate in behalf of the coconut trading industry in all agreements,
arrangements, missions or conventions with any foreign government or
entity with respect to trading relations, market quotas, tariff and non-tariff
barriers and such other matters affecting the export of coconut products and
by-products, and oil palm products and by-products;

5) Assist coconut farmers, organizations in marketing their products locally or
abroad when the need arises;

6) Assist coconut farmers organizations in establishing farmer owned bonded
warehouses and processing facilities;

7) Develop credit assistance programs and funding mechanisms for coconut
planters, farmers, processors, workers, and organizations;

8) Engage in the business of manufacture and merchandise of coconut
consumer products and by-products and distribute the same in the local
market to avert the short supply of such products for the interest of the
consumers;

9) Promote the expansion and development of the domestic and foreign
market for coconut products and by-products and oil palm products and by-
products.

Governmental Powers and Functions

1} Impose and collect all fees, charges, assessments and imposts including
interests and surcharges authorized under this Act or its implementing rules
and regulations and disburse funds generated by the Authority from its
‘operations to carry out its functions;

2) Require exporters, traders, millers, refiners, desiccators, oleo-chemical
processor, other manufacturers and end-users of coconut products and by-
products, and oil palm products and by-products to submit periodic reports
of production, receipts of deliveries or purchases or both, sales, inventory,
contracts and such other data the Authority may deem necessary to properly
and effectively promote the development of the industry. All information
given to the Authority by the individual firms shall be confidential in nature
and could not be used against them;

3) Promulgate its own rules for investigation and procedure to investigate
complaints involving violations of this Act or any rules and regulations issued
pursuant thereto, or any such other faws, rules and orders affecting the
coconut industry; attribute or settle conflicting claims or render the
appropriate decision or award including the imposition and administrative
penalty of cancellation, revocation and suspension of license, registration,
permit or clearance issued in accordance with this Act;

4) Call upon or deputize any official or law enforcement agency of the
‘government as may be necessary to assist the Authority in carrying out and
enforcing its functions under this Act;

5) Issue subpoena or subpoena ducestecum and/or subpoena ad testificandum
to summon witnesses to appear in any investigation or hearing conducted by
it;



6) Enter into, make, conclude, perform, and carry out contracts of every kind
and nature and for any lawful purpose which are necessary, proper or
incidental to any business or purpose of the Authority; and

7) Adopt, alter and use a corporate seal; to sue and be sued; and otherwise to
do and perform all acts or exercise all powers and functions necessary or
incidental to attain the national policy and objectives under this Act.

ARTICLE It
BOARD OF DIRECTORS AND OTHER PERSONNEL

SECTION 6. Board of Directors. The corporate powers and duties of the Authority shall be
vested and exercised by a Board of Directors, hereinafter referred to as the Board,
composed of seven (7) members to be appointed by the President, three (3) of whom shall
represent the coconut farmer sector, one (1) from the trading and processing sector, one
(1) from the science and research sector, and two (2) from the government sector. The
chairman shall be designated by the President from among the members appointed. In his.
absence, the chairman may designate any member of the board to preside during the
meeting.

SECTION 7. Tenure. The members of the Board shall hold office for a term of six (6) years or
until their successors shall have been appointed and qualified or unless sooner removed for
cause. The first members of the Board to be appointed under this Act shall hold office as
follows: Three (3) members for two years, Four (4) members for four years and Four (4)
members, inclusive of the Chairman, for six years. Appointment to vacant positions shall
only be for the unexpired term of the predecessor.

SECTION 8. Powers and Functions. The Board shall exercise the following powers and
functions:

a) Formulate and adopt a national government plan for the coconut industry and
promulgate the necessary rules and regulations, policies and measures in support of
the plan;

b) Prescribe the organization of the Authority and fix the compensation and allowances
of all its personnel in accordance with la

¢) Reorganize the Authority when there is a need to institute reforms in the
organizational structure to effect economy and promote efficiency. For this purpose,
the Board may group, coordinate, consolidate or integrate positions and create,
reclassify, split and abolish positions;

d) Adopt, promuigate or amend, revise, modify or repeal rules and regulations
necessary to implement the provisions of this Act;

e) Appoint the Administrator and deputy administrators and other officers upon the
recommendation of the Chairman and Chief Executive Officer;

10


f) Approve the annual budget and such supplemental budgets of the Authority;

8) Review, revise, modify, increase or decrease the fees and assessment authorized to
be collected in this Act as current industry condition may warrant taking into
account public interest, cost of services and the prices of coconut products and by-
products, and oil palm products and by-products; and

h) Perform such other duties as may be assigned to it by the President of the
Philippines, consistent with this act.

SECTION 9. Quorum and Meeting. The Board shall meet as often as the exigency of the
service may demand. The presence of at least four (4) members shall constitute a quorum
and the vote of a majority of the members present constituting a quorum shall be necessary
for the adoption of any rule, resolution, decision or any other act of the Board,

SECTION 10. Compensation. The members of the Board shall each receive per diem for
every board and committee meetings actually attended which however, shall not be more
than six thousand pesos (P6,000.00) maximum per diem per meeting; provided further, that
it shall not exceed four (4) board meetings during any month for each member.

SECTION 11. Officers and Personnel. The Chairman of the Board, who shall have the rank
and privileges of a Department Secretary, shall be the head and Chief Executive Officer of
the Authority. Upon his recommendation, the Board shall appoint an Administrator of the
Authority who shall be the Chief Operating Officer, with the rank and privileges of a
Department Undersecretary. The Administrator shall have the responsibility of managing
the day-to-day affairs and operations of the Authority subject to the supervision and control
of the Chief Executive Officer and in accordance with the policies established by the Board.

‘The Administrator shall have a term of six (6) years unless sooner removed for cause or
by reason of incapacity.

There shall be such sufficient number of deputy administrators as the Board may
prescribe to assist the Administrator who shall be appointed or removed for cause by the
Board. The Administrator and the deputy administrator may be assigned with such powers
and duties as the Chairman and Chief Executive Officer may prescribe from time to time.

SECTION 12. Application of the Civil Service Law. All officers and employees of the
Authority shall be subject to the civil service laws, rules and regulations, and all selection
and appointments shall be based on merit and fitness.

ARTICLE IV
MANAGEMENT AND OPERATIONS

SECTION 13. Management. The management of the corporate affairs of the Authority shall
be the responsibility of the Chief Executive Officer with the assistance of the Administrator,
deputy administrator for planning and such other officers as may be determined by the
Board,

uu


SECTION 14. Duties of the Chief Executive Officer. The Chief Executive Officer shall exercise
the following duties and responsibilities:

a) Initiate and develop corporate policies, programs and objectives for approval of the
Board;

b) Establish general administrative and operating policies;

c) Appoint all other non-officer employees of the Authorit

d) Execute for and in behalf of the Authority contracts, obligations and agreements
which are required to be approved by the Board;

e) Appoint technical consultants;

f) Discipline officers and employees in accordance with civil service laws, rules and
regulati

8) Submit the internal organizational structure of the Authority, financial statements
and other reports as may be required by the Board;

h) Delegate or assign any of the foregoing powers and duties except the power to
appoint any official in the hierarchy of authority and always subject to his
supervision and control; and

i) Exercise such other powers and duties as may be assigned by the Board,

SECTION 15. Corporate Planning Office. To assist the Chief Executive Officer in the
formulation of general plans and programs, promulgation of policies, the monitoring and
evaluation of industry and corporate activities, there shall be a Corporate Planning Office
Which shall serve as the technical arm under the office of the Chairman, having the status of
a branch which shall be headed by director for corporate planning with a rank of a deputy
administrator. The term of the director for corporate planning shall be co-terminus with the
Chairman.

SECTION 16. Duties of the Chief Operating Officer. The Chief Operating Officer shall
exercise the following duties and responsibilities:

a) Ensure that the administrative and operating policies are carried out under the
direction and control of the Chairman and Chief Executive Officer;

b) Prepare and submit to the Chief Executive Officer, within sixty (60) days before the
beginning of each calendar year, an annual operational budget of the Authority;

) Monitor operational problems, adopt remedial measures and submit policy
proposals to improve the day-to-day affairs and operations of the Authority; and

2



) Perform other duties and functions as may be assigned by the chairman of the
board.

SECTION 17. Branch Offices. The Authority shall have the following branches:

a) Agricultural and industria! Research and Development Branch for the execution and
implementation of systematic, unified, and credible research and development
policies, plans and programs on coconut production, utilization, propagation, and
related technologies as guided by principles of scientific excellence and
professionalism including the implementation of policies, plans and programs
relating to advancement in industrialization and development for the coconut
products and by-products, and oil palm products and by-products particularly on
food, oleochemicals, fuels and lubricants;

b) Market Research and Development Branch for the formulation and implementat
of policies, plans and programs relating to domestic and international markets
development affecting the coconut industry including the enforcement of market
rules and regulations formulated by the Authori

©) Field Operations Branch for execution and implementation of policies, plans and
programs relating to production, marketing and processing activities;

d) Administration and Finance Branch for developing and maintaining the delivery of all
necessary administrative, financial and manpower support for the whole operations
of the Authority; and

) Development Information and Communication Branch for the execution and
implementation of policies, plans and programs relating to development information
and communication as well as other socio economic research and development.

Every branch shall be headed by 2 deputy administrator or such qualified acting or
officer in charge as may be designated by the Chief Executive Officer.

SECTION 18. Regional Offices. The Authority shall establish and organize regional offices in
coconut producing areas in the country in accordance with the political and administrative
regions in the country and such number of provincial or district offices, or both, that will
assist the Authority in the full implementation of this Act.

SECTION 19. Departments, Divisions and Units. There shall be organized specialized
departments, divisions, units or offices as may be necessary to provide the needed
administrative, technical and specialized services, as may be deemed proper and expedient
by the Board, which shall be headed by a person with the required specialization or
expertise as prescribed in the qualification standard for the position or function.

ARTICLE V
SOURCES OF FUNDING

B


SECTION 20. Coconut Development Fund. There is hereby established 2 national coconut
development fund to be administered by the authority for the purpose of financing the
growth and development of the coconut industry, including human resource development,
training of farmers and other related activities. The sum of ONE BILLION PESOS
{P1,000,000,000.00) is hereby appropriated from all taxes, duties, fees, charges and impost
‘on persons and entities engaged in business involving coconut products and by-products
and shall be utilized for the purpose above stated.

Thereafter, a continuing appropriation for five (5) years and subject to review is hereby
authorized to be appropriated from the same source of the total industry performance
which shall not be less than one billion pesos (P1,000,000,000.00) per annum to be made
available by the Bangko Sentral ng Pilipinas.

SECTION 21. Special Corporate Support Fund. The Authority shall have a Special Corporate
Support Fund for its administrative operating expenses to be funded from the following
sources:

a) An assessment of twelve centavos (P0.12) per kilogram of copra or husked nuts, or
their equivalent in other coconut products and by-products, delivered to and
purchased by traders, exporters, millers, desiccators, processors and other end-
users of coconut products and by-products: Provided, That said amount shall be
subject to reassessment within three (3) years from the effectivity of this Act and
every three (3) years thereafter. Such assessment shall be collected by the Authority
and deposited with any government depository bank which shall be used exclusively
for the operational, supplemental or special budget duly approved by the Board:
Provided, further, That no portion of the fund nor any unexpended balance thereof,
including its earnings, shall be transferred to the general or any special funds of the
government, but shall remain as corporate funds to be used in accordance with the
authorized purposes; and

b) The proceeds of regulatory and service fees or charges as may be determined and
imposed by the Board in the implementation of the provisions of this Act to cover
reasonable costs of service in the issuance of licenses, certificates, export permits
prior commodity clearances including other incomes to be withdrawn in accordance
with the immediately preceding paragraph. Such regulatory and service fees or
charges shall not be construed or interpreted under any law or regulation, as special
and/or fiduciary funds, or as part of the general funds of the national government.

Such assessment and regulatory and service fees are subject to review by the
governing board of the authority end may be increased from time to time to cover
cost of inflation or as the need arises.

SECTION 22. Other Sources of Funding. In the event the funds as provided in Sections 20

and 21 of this Act become insufficient, an amount not less than the initial appropriation
mentioned in Section 20 hereof shall be appropriated from the following sources:

14


a) The proceeds of loans which the Authority may obtain from financial institutions:
Provided, That should the total outstanding proceeds shall at any one time exceed
One Billion Pesos {P1,000,000,000.00), the transaction shall be subject to the
approval of the President;

b) All other proceeds, income, and collections arising from transactions authorized
under this Act: Provided, That proceeds herein mentioned shall be used to finance
socio-economic, developmental, and research and development programs and
projects of the Authority;

©) The proceeds of the value-added tax imposed on all coconut products and by-
products; except copra, copra cake and meal which are hereby exempted from
payment of value added tax and on the services of coconut oil mills, desiccated
coconut factories and other processors of coconut products shall be collected by the
Bureau of Internal Revenue under Executive Order No. 273, entitled “Adopting A
Value-Added Tax, Amending For This Purpose Certain Provisions Of the Notional
Internat Revenue Code, And For Other Purposes,”: Provided, That such proceeds of
the value added tax shail be deposited with the Treasurer of the Philippines within
the first ten (10) days of each quarter and shall be automatically appropriated to
finance the programs and projects of the Authority;

ARTICLE VI
REGISTRATION, LICENSE, PERMITS

SECTION 23. Application for Registration. Any person directly or indirectly engaged in the
manufacture, processing, and other business involving coconut products and by-products,
and other oil palm products and by-products to be determined by the Authority Pursuant to
its rules and regulations shall apply for registration with the Authority.

SECTION 24. License to Operate. Upon approval of application for registration, the
‘Authority shall issue the corresponding license to operate under such rules and regulations
promulgated for the purpose. The application for registration and license shall be
mandatory for both the principal and his agents in the case of natura! persons, and the
central or main offices and their branches or subsidiaries in the case of juridical persons.
ARTICLE VIL
COMMODITY SUPERVISION

SECTION 25. Application for Export Clearance. Notwithstanding any provision of iaw to the
contrary, all exporters of copra, coconut oil, desiccated coconut, copra cake or meal, and
other coconut products and by-products shall file with the Authority, not later than ten (10)
days prior to the date of loading, an application for export clearance purstiant to such forms
prescribed by the Authority under its implementing rules 2nd regulations.

SECTION 26. Use of Moisture Meter. For an accurate determination of moisture content in
the copra resecada, and in observation of the standard scale for moisture content
established by the Authority, all persons or firms engaged in the business involving copra

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shall use moisture meters duly calibrated, serialized and sealed by the authority or any duly
authorized office.

SECTION 27. Fees. The Authority shall collect in addition to the fees for the issuance,
renewal or replacement of license and registration such reasonable fees to cover the cost of
services under this Act.

ARTICLE ViIl
INCENTIVES

SECTION 28. Fiscal Incentives. The coconut industry, its institutions, members and
participants shall be entitled to all tax incentives under existing applicable laws, decrees,
executive orders and similar issuances.

SECTION 29. Tax Exemption. Notwithstanding the provisions of any law to the contrary, all
real and personal properties, equipment and machinery acquired by the Authority for its
operations under this Act shall be exempt from alll taxes, fees, duties, imposts and
assessments, both national and local except income tax.

ARTICLE IX
SPECIAL PROVISIONS

SECTION 30. Conservation of Coconut Trees. in order to conserve and protect the resources
devoted to coconut industry, the Authority shall regulate the cutting or destruction of
coconut trees in accordance with the provisions of Republic Act 8048, otherwise known as
the Coconut Preservation Act of 1995, including ali amendments thereto on the date this
Act takes effect and to execute and enforce the police powers granted in Section 5c of this
Act

SECTION 31. Measures to Protect the industry. When the general welfare of the industry
for national interest so requires, and when there exist unabated increase in production
capacity resulting, singly or collectively, in cutthroat competition, overproduction,
underselling, and smuggling of poor quality coconut products and by-products, or oil palm
products and by-products, thereby threatening the viability and stability of the coconut
industry or any sector thereof, the Authority shall regulate or otherwise suspend the
issuance of license for the establishment and operation of any new coconut oil mill,
desiccated coconut plant or refinery or the upgrading of capacities of existing mill, plant or
refinery. In granting the license, the Authority shall evaluate and determine the need for the
establishment of additional mills or plant or upgrading the capacity of any existing mills or
plant in relation to:

a) The existing market demand;

b) The production capacity prevailing in the country, locally or any sector of the
industry;

©) The level and flow of supply or raw materials; and

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d) Such other circumstances which may affect the viability or stability of the industry
concerned.

ARTICLE X
PENALTIES

SECTION 32. Penalties. Any person who willfully or deliberately violates any of the
provisions of this Act or rules or regulations duly promulgated hereunder shali be punished
by a fine of not less than two hundred thousand pesos (P200,000.00), or by imprisonment
of not more than five (5) years, or both: Provided, That should the violation constitute an
act punishable under the Revised Penal Code, the pertinent provision and penalty
prescribed in the said Code shall apply.

If the violation be committed by an association, partnership, corporation or any
juridical person, the officer or officers, director or employee responsible for the violation
shall be held liable and shall suffer the penalties provided herein. An alien found guilty shall
after having served his sentence be immediately be deported and in case of a naturalized
citizen, his Certificate of Naturalization shall be cancelled.

SECTION 33. Interest and Charges. Assessment and regulatory or service fees or charges
which are not paid on the due date thereof shall be subject to penalty interest of fourteen
percent (14%) per annum. In addition thereto, a surcharge of twenty five percent (25%)
shall be imposed in case of willful or fraudulent failure to pay as determined by the court in
a case filed therefor.

ARTICLE Xt
TRANSITORY PROVISION

SECTION 34. Implementing Rules and Regulations. The PHILCIDAis hereby given full power
and authority to promulgate such rules and regulations it may deem proper and necessary
for the effective implementation of this Act.

SECTION 35. Abofition. The Philippine Coconut Authority is hereby abolished and its powers,
and functions transferred to the Philippine Coconut industry Development Authority
together with all the appropriations and funding from all sources, equipment and other
assets and such personnel as are necessary: Provided, that as a result or incident of the
abolition, no personnel shall be terminated or separated except when the Board shall
exercise its authority to reorganize pursuant to Article il, Section 8 of this Act: Provided
further, that displaced personnel as a result of reorganization shall be given compensation
equivalent to twice their present salary for every year of government service. Provided
furthermore, that the Authority through the Board, shail effect the transfer of absorbed
personnel in a manner that will ensure the least disruption of on-going programs and
projects: Provided finally, that until such reorganization is implemented, all officers and
employees of the abolished agency shall continue all functions and discharge all their duties
and responsibilities.

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ARTICLE Xil
MISCELLANEOUS:

SECTION 36. Separability Clause. If any part or provision of this Act is declared
Unconstitutional, other parts or provisions thereof which are not affected thereby shall
continue to be in full force and effect.

SECTION 37. Repealing Clause. All laws, decrees, executive orders, rules and regulations
and other issuances or parts thereof, inconsistent with the provisions of this Act, are hereby
repealed or modified accordingly.

SECTION 38. Effectivity. This Act shall take effect fifteen (15) days after its publication in at
Jeast two (2) national newspapers of general circulation.

Approved,

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