SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
"14 
NOV 25 P 3 :4~ 
Second Regular Session 
) 
SEN~~67 
S.B. No. __ 
---'-
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT TO SPUR RURAL DEVELOPMENT IN THE COCONUT SECTOR BY ESTABLISHING 
THE COCONUT FARMERS' TRUST FUND, PROVIDING FOR THE MANAGEMENT 
THEREOF, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
For more than forty years, the coconut farmers have long been fighting for their 
rights - not just to have access to the Coco Levy - but their right to have the opportunity 
to develop their industry, and provide better lives for their families and communities as 
well. 
The immense potential of the coconut industry to be a great contributor to the 
Philippines is largely untapped. With the advancement of farming technology and 
intercropping, there is a huge possibility to harness the coconut industry to address 
increasing demands and offer coco fiber, water, and oil, among others to new markets. 
It is high time to change its narrative from one of the poorest sector in the 
country to a great economic driver and source of pride of the Filipino people. 
This bill proposes to build the Coconut Levy Trust Fund for the growth of the 
industry and ultimately, for the benefit of the small coconut farmers and workers all 
over the country. 
The proposal includes the financing of programs.for the increased productivity of 
coconut farms, capacity building of farmers, research and development of coconut-
based enterprises, and implementation of poverty-alleviation programs. 
The goal is to rehabilitate and revitalize the industry to stimulate production and 
attract investments that will make it again a viable, profitable and sustainable 
endeavor. The proposal seeks to modernize the farmers and stakeholders to make 
coconut production globally competitive and become a vital source of economic income 
for the country. 
The challenge of inclusive growth is that as the Philippines grows, every Filipino 
should grow as well. This means that every family, every sector, and even the poor and 
marginalized should be able to experience this growth. 
It is thus urgent and important to provide the coconut farmers the enabling 
environment and proper opportunity to thrive and flourish, and be able to participate in 
building this nation. 


In view of the foregoing, the approval of this bill is earneS:;::'ht(\A fA...~ 
s.,,, • .;fit. •. ,;"o~i A. '00"0 'V 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
'14 
NOV25 P3:4tl 
SENATE 
S.B. No. 2467 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT TO SPUR RURAL DEVELOPMENT IN THE COCONUT SECTOR BY ESTABLISHING THE 
COCONUT FARMERS' TRUST FUND, PROVIDING FOR THE MANAGEMENT THEREOF, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Short Title. - This act shall be known as the "Coconut Farmers' Trust Fund 
2 
Act". 
3 
SECTION 2. Dec/aration of Policy. - It is hereby declared the policy of the State to 
4 
consolidate the benefits due to coconut farmers, especially the poor and marginalized, under 
5 
various statutes and to expedite the delivery thereof in order to attain a balanced, equitable, . 
6 
integrated and sustainable growth and development of the coconut industry. 
7 
SECTION 3. Constitution of the Coconut Farmers Trust Fund. -
Pursuant to the 
8 
provisions of the Presidential Decrees and other issuances creating the coconut levy trust fun~ 
9 
and in line with the decisions of the courts affirming the trust character of the fund, there is 
10 
hereby constituted an irrevocable trust fund, to be known as the Coconut Farmers Trust Fund 
11 
(herein referred to as the "Trust Fund"), which shall be capitalized, managed, utilized and 
12 
accounted for in the manner 
13 
hereinafter provided. 
14 
SECTION 4. Purpose 0/ the Trust Fund. -
The Fund shall be established for the 
15 
development of the coconut industry for the ultimate benefit of the small coconut farmers and 
16 
farm workers. Its purpose shall include the financing of programs or assistance for the benefit 
1 


1 
of the coconut farmers, increased productivity of the coconut industry, and development of 
2 
coconut-based enterprises and other anti-poverty programs. 
3 
SECTION S. Initial Capitalization of the Trust Fund. The Coconut Industry Investment 
4 
Fund - San Miguel Corporation (CIIF-SMC) block of shares, starting with the proceeds of the 
5 
Series 1 preferred shares together with all dividends declared, paid or issued thereon, as well as 
6 
any increments thereto, and all other available funds shall form the initial capital of the Trust 
7 
Fund. The government shall reconvey the aforesaid proceeds, dividends and increments 
8 
thereto to the Trust Fund Committee created under Section 9, under such terms and conditions 
9 
consistent with this Act. 
10 
Nothing in this Act shall be understood to prevent or prohibit any person, group or 
11 
entity from conveying to the Committee other properties and/or additional assets which shall 
12 
form part of the initial capitalization of the Trust Fund. 
13 
SECTION 6. Extent of the Trust Fund. - The Trust Fund shall be composed of the 
14 
following: 
15 
(a) Initial capitalization as provided in Section 5; 
16 
(b) Such other properties and/or assets intended for the purpose herein stated, and 
17 
conveyed or transferred to the Committee emanating from all coco levy recovered assets; and, 
18 
(c) Grants, donations and other lawful transfers by public or private entities. 
19 
SECTION 7. Perpetual Nature of the Trust Fund. - In order to ensure an enduring 
20 
character of the Fund and for maximum benefits of the coconut farmers and the industry, it 
21 
shall be managed and administered in a prudent manner consistent with its character as a 
22 
perpetual fund: 
23 
(a) The principal shall be perpetually maintained and preserved. For this purpose, the 
24 
principal is defined as all recovered coco levy assets including their dividends which shall be 
25 
managed to generate income and/or interest. The principal may be augmented by grants, 
26 
donations and other lawful transfers by public or private entities; 
27 
(b) In the event that any property or asset of the Trust Fund (or any portion hereof, as 
28 
the case may be) is subsequently sold, alienated or disposed of, the proceeds and revenues 
29 
arising out of and realized from such sale, alienation or dispositions, shall form part of the 
30 
principal; 
2 


1 
(c) Only the income, interest earnings 
2 
(d) and monetary benefit realized by and accruing on the principal shall be used for 
3 
programs and/or projects and disposed of by the Committee for such purposes and endeavors 
4 
specific under the provisions of this Act. 
5 
SECTION 8. Designation of Trustee Bank/s. - The Committee shall designate reputable 
6 
depository bank/s of the Trust Fund, which shall: 
7 
(a) Manage, utilize and account for the Trust Fund or a portion thereof in the manner 
8 
hereinafter provided by the Committee, and 
9 
(b) Exercise the tasks, functions and duties determined and established by the 
10 
Committee created under the provisions of this Act, to the extent allowed under applicable 
11 
laws. 
12 
SECTION 9. The Coconut Farmers Trust Fund Committee. - A Coconut Farmers Trust 
13 
Fund Committee is hereby created under the Office of the President for the management and 
14 
administration of the trust fund and the disposition and the utilization of the earnings and 
15 
incomes thereof for the development of the coconut industry and ultimate benefit of the small 
16 
coconut farmers and farm workers. 
17 
The Coconut Farmers Trust Fund Committee (herein referred to as the "Committee") 
18 
shall be composed of the President of the Philippines sitting as its chairperson, and fourteen 
19 
(14) other members, as follows: 
20 
(a) Four (4) representatives from the government, who shall be the Secretary of 
21 
Agriculture, Secretary of Finance, Secretary of the National Anti-Poverty Commission, and 
22 
Director General of the National Economic and Development Authority; 
23 
(b) Two (2) representatives from the finance and banking sector, who must have 
24 
extensive experience and proven expertise in finance, banking and trust 3 management; 
25 
(c) Six (6) representatives from coconut farmers' organizations which have considerable 
26 
experience and reputable track record; and, 
27 
(d) Two (2) representatives from Civil society organizations with focus on uplifting the 
28 
small coconut farmers and the industry, and which have conSiderable experience and reputable 
29 
track record; 
30 
The nominees of the coconut farmers' organizations and the civil society organizations 
31 
shall be validated and shortlisted by the National Anti-Poverty Commission. 
3 


1 
A Vice Chair and the members of the Committee shall be appointed by the President. 
2 
With the exception of the President and the government representatives whose 
3 
position in the Committee is co-terminus with their respective terms in office, the members of 
4 
the Committee shall each hold a term of three (3) years and can only be reappointed once. 
5 
SECTION 10. Functions and Responsibilities of the Committee. - To ensure that the 
6 
benefits and gains arising out of the Trust Fund directly redound to, and are received by, the 
7 
small coconut farmers and farm workers, the Committee shall: 
8 
(a) Decide on the disposition, utilization and allocation of the said funds and assets, in 
9 
consultation with the coconut farmers, for the following special purposes: 
10 
11 
12 
13 
14 
15 
16 
i. 
increase in the productivity of small coconut farmers through sustainable 
means; 
ii. 
rehabilitation of the coconut industry and promotion of coconut-based farm 
systems; 
iii. 
establishment of coconut-based enterprises and modernization towards 
global competitiveness; 
iv. 
other poverty alleviation and social equity programs. 
17 
(b) Set the investment and asset management policy of the Trust Fund in conSideration 
18 
of all existing coconut industry development studies and plans consistent with the 
19 
purposes of this Act. The said asset management policy shall include an immediate 
20 
evaluation of all reconveyed assets, determine its usefulness to the coconut farmers 
21 
and the industry, and recommend the appropriate disposition thereof if necessary; 
22 
(c) Periodically review the established priorities for the preferential assistance to small 
23 
coconut farmers and farm workers, revised as necessary in accordance with 
24 
changing conditions; 
25 
(d) Formulate the rules and regulations governing the allocation, utilization and' 
26· 
disbursements of the Fund; 
27 
(e) Form a Secretariat that would provide staff work and serve the needs of the 
28 
Committee for the purposes stated in this Act; 
. 29 
(f) Monitor implementation and exercise oversight functions; 
30 
(g) Perform such other acts necessary, proper or conducive to attain the purposes of 
31 
the Fund. 
4 


1 
SECTION 11. Operating Budget. - The operating budget of the Committee and its 
2 
Secretariat shall be sourced out from a portion of the interest earnings of the principal which 
3 
shall not exceed ten percent (10%) of the amount of projects and programs for 
4 
implementation. 
5 
SECTION 12. Implementing Agencies. - The Committee may call upon any department, 
6 
bureau, office, agency and instrumentality of the government of the Republic of the Philippines, 
7 
including government-owned and controlled corporations, such as the Philippine Coconut 
8 
Authority, the Department of Agriculture, Department of Science and Technology, Department 
9 
of Energy to implement identified programs and projects. 
10 
SECTION 13. Message af the Committee. - The Committee shall meet at least once a 
11 
month, or as often as deemed necessary by the Chairperson. 
12 
SECTION 14. Annual Accounting and Audit. The Committee shall maintain appropriate 
13 
records and accounts of all investments, receipts, disbursements and other transactions 
14 
relating to the management and administration of the Trust Fund and disposition of the Trust 
15 
. Income. 
16 
The Trust Fund and Trust Income shall be audited annually by the Commission on Audit. 
17 
SECTION 15. Reconveyance. The Presidential Commission on Good Government, the 
18 
Office of the Solicitor General and other appropriate government instrumentalities are hereby 
19 
directed to take all the necessary steps to reconvey all recovered coconut levy funds and assets 
20 
to the Committee. 
21 
SECTION 16. Repealing Clause. - All laws, rules and regulations, other issuances or parts 
22 
thereof, which are inconsistent with this Act, are hereby repealed or modified accordingly. 
23 
SECTION 17. Effectivity. - This Act shall take effect fifteen (15) days after its complete 
24 
publication in the Official Gazette or in at least two (2) national newspapers of general 
25 
circulation. 
26 
Approved, 
5