Republic of the Philippines

House of Representatives
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

4632

HOUSE Blu NO.

Introduced by Hon. Anthony M. Bravo
COOP-NATCCO PARTYLIST

EXPLANATORY NOTE

The Supreme Court ruled in COCOFED, et al. vs Republic of the Philippines GR No. 177857
58 that the coco levy funds and assets which consist primarily of the 753,848,312 SMC shares and
their accumulated dividends are owned by the government in trust for the coconut farmers. It is
ruled that said coco levy funds and assets are to be used exclusively for the benefit of all the farmers
and the development of the coconut industry. The funds are therefore public trust funds -with

government as trustee far the beneficial owners who are the coconut farmers,

However, the Supreme Court decision does not provide for an administrative mechanism to
ensure that the coco levy funds are managed prudently and properly as intended by law, The
decision does not provide guidelines for the management and use of the coco levy funds for the
benefit of the coconut industry and the caconut farmers. This is dangerous situation for the coconut
farmers who bore the burden of the coconut levy.

In fact, other sectors have started posturing to get their hand on the coconut levy funds.
Worse, these “other sectors’ are not even connected to the coconut industry, and the proposed use
of the funds is not for the benefit of the coconut industry and the coconut farmers.

Hence, there is a great need to constitute the coconut levy funds and assets into a Coconut
Farmers Welfare and Coconut Industry Development Trust Fund, and provide the administrative
structure that will manage the trust funds and ensure that its use will benefit the coconut farmers
and the coconut industry. That the structure is proposed to be a Government-owned Corporation to
act as Trustor for the Coconut Farmers and Coconut Industry, to be called as the Philippine Coconut
Farmers Welfare and Coconut Industry Development Corp.

This bill seeks to give teeth to the decision of the Supreme Court that the coconut levy funds
and assets are to be used exclusively for the coconut industry and the coconut farmer

This is a re-file of HB No. 6135 passed by the House of Representatives on third and final reading in the 16"
Congress.


Republic of the Philippines

House of Representatives
Quezon City

NTEENTH CONGRESS
First Regular Session

House iLL No. 4632

Introduced by Hon. Anthony M. Bravo
and Hon. Sabiniano S. Canama
COOP-NATCCO PARTYLIST

AN ACT CREATING THE COCONUT FARMERS WELFARE AND COCONUT INDUSTRY
DEVELOPMENT TRUST FUND, PROVIDING FOR ITS MANAGEMENT, UTILIZATION AND FOR
OTHER PURPOSES

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

SECTION 1, Shore Title, - This Act shall be known as the “The Coconut Farmers Welfare and
Coconut Industry Development Act’

SEC. 2. Declaration of Policy. ~ tt is hereby declared the policy of the State to attain the balanced
equitable, integrated and sustainable growth and development of the coconut industry. Towards
this end, the benefits due to coconut farmers, especially the poor and the marginalized, under
various statutes shall be consolidated and their delivery expedited,

CHAPTER T
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 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: (1) Anglo
Ventures Corporation; (2) ACS Investors, Incorporated; (3) Are Investors, Incorporated; (4) AP
Holdings, Incorporated; (5) Fernandez Holdings, Incorporated; (6) First Meridian Development,
incorporated; (7) Randy Allied Ventures, Incorporated; (8) Rock Stee! Resources, Incorporated; (9)
Roxas Shares, Incorporated; (10) San Miguel Officers Corporation, Incorporated; (11) Soriano
Shares, Incorporated; (12) Te Deum Resources, Incorporated; (13) Toda Holdings, Incorporated;
and (14) Valhalla Properties Limited, Incorporated, created by the CIIF Oil Mills Group to acquire,
hold and manage the shares of stocks of San Miguel Corporation (SMC);



(0) CIF O11 Mills Group refers to the six (6) CIIF companies, namely: (1) Southern Luzon Coconut Oi)
Mills; (2) Cagayan de Oro Oil Company, Incorporated; (3) Tigan Coconut Industries, Incarporated;
(4) San Pablo 3 Manufacturing Corporation; (5) Granexport Manufacturing Corporation; and (6)

Legaspi Oil Company, Incorporated, acquired by the UCPB using the CIF;

(d) CIF SMC Block Shares refer to the thirty-three million, one hundred thirty-three thousand and
two hundred sixty-six (33,133,266) shares of stock in SMC, sequestered by the Presidential
Commission on Good Government (PCGG) in April 1986 representing thirty-one percent (31%) of
the total outstanding capital stock of SMC;

(c} Converted SMC Series 1 Preferred Shares refer to that portion of the CIIF SMC Block Shares
covering seven hundred fifty-three million, eight hundred forty-eight thousand and three hundred
twelve (753,848,312) preferred shares of stock in SMC representing twenty-four percent (24%) of
the outstanding capital stock of SMC;

(f) Coconut farmer refers to:
(1) Farmer-owner of a coconut farm, which is not more than five (5) hectares, who
{i) Tills the land (owner-cultivator); or

ii) Does not till the land, but has control and supervision over the cultivation of a farm
which is not more than five (5) hectares; and

(2) Anon-owner of the coconut farm who is either a:

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

{ii} Farm worker or laborer, whether seasonal or itinerant, engaged in the harvesting of the
nuts and processing of copra as major means of livelihood,

(g) Coconut Levy Assets refer to any and all kinds of property, whether real or personal, tangible or
intangible, wherever situated, which have been acquired through or otherwise funded by the
Coconut Levy Funds, inchiding those assets that may be recovered in favor of the Government, as
well as the 4 fruits or income derived therefram, including those acquired in exchange ov
substitution thereof, including the following

(1) The shares of stock in the UCPB determined to be owned by the Government;
(2) The CIF Oil Mills Group;
(3) The CIF Holding Companies; and

(4) The Converted SMC Series 1 Preferred Shares

(h) Coconut Levy Funds refer to various funds generated from levies, taxes, cl
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:

arges, and other fees

(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 and Industry Trust Fund Committee created
under Section 11 of this 5 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 shail include, among
others, asset allocation, criteria for selection of fund managers, required income from the fund, and

other investment management threshold requirements.

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

(K) Trust Principal refers to:

(4) The initial Trust Principal composed of dividends declared, patd, or issued on the
Converted SMC Series 1 Preferred Shares; the proceeds from the redemption of the Converted SMC
1 Preferred Shares; all income or interest derived therefrom as of the effectivity of this Act; any
other cash Coconut Levy Asset deposited in the Bureau of the Treasury (BTr) and the UCPB as
administrator of the CIF; and any other cash Coconut Levy Asset including amounts deposited in
the UCPB as Administrator of the CIIF;

(2) 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
{Series of 2001); and

(3) Proceeds of privatization of any or all properties or assets conveyed by any person,
group or entity to the Committee, from time to time, as provided in Section 8 hereof.

CHAPTER Ii
AUDIT AND RECONVEYANCE OF COCONUT LEVY ASSETS

SEC. 4. Audit and Inventory of Coconut Levy Assets, - Upon the effectivity of this Act, the PCGG,
ted under Executive Order No, 1 (Series of 1986), shall conduct a complete accounting and
inventory of the Coconut Levy Assets as well as the investments, disbursements, and expenditures
relating to the coconut levy fund and submit a certified report to the BTr, the Commission on Audit
(COA) and the Office of the President (OP)

‘The COA shall audit the inventory of Coconut Levy Assets prepared and submitted by the PCGG for
the purpose of, among others, determining completeness of the inventory, establishing the
reasonableness of the asset valuation and tracing of the flow of the coconut levy fund. The COA sball
submit to the Coconut Farmers and Industry Trust Fund Committee created under Section 11
hereof its initial audit report within one hundred twenty (120) days upon completion of the audit
However, further audit may be undertaken after the initial audit, as necessary.

The Committee shall, within fifteen (15) days from its receipt of the audit report, publish the same
in at least two (2) newspapers of national circulation.

Nothing herein shall be construed as preventing the PMO, created under Article {II of Executive
Order No, 323 (Series of 2001), from procuring a third-party appraisal of any of the Coconut Levy
Assets prior to or in the course of preparing the privatization or disposition plans for the said
assets.


SEC. 5. Reconveyance of Coconut Lewy 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

(0) 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,

CHAPTER Ill
COCONUT FARMERS AND INDUSTRY TRUST FUND

SEC. 6. The Coconut Farmers and Industry Trust Fund. ~ There is hereby created a trust fund to be
known as the Coconut Farmers and Industry Trust Fund, hereinafter referred to as the Trust Fund,
which shall consist of the Trust Principal and the Trust Income. No portion of the Trust Fund shall
accrue to the general fund of the National Government. It shall be capitalized, managed, utilized and
accounted for in the manner provided in this Act. Nothing in this Act shall be understood ta 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 exchisively 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 Fu
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

ind shall

Jn order to ensure the enduring character of the Trust Fund, the Principal thereof shail be
augmented by grants, donations and other lawful transfers by public or private entities. At the end
of the year, all unspent portion of the Trust Income for the year shall accrue to the Trust Principal.

SEC. 9. Management and Utilization of the Trust Fund. ~ The Trust Fund shall be available and may
be utilized only for the purpose for which it was
subject to the following conditions

created and upon authorization of the Committee,

(a) The Trust Principal shall be preserved and maintained at all times and only the Trust Income
may be used.

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

program, activity or project;


(o) 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

(a) No part of the Trust Fund shall be utilized for the payment of salaries and other personnel
benefits.

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

SEG. 10. Designation of the Bureau of the Treasury as Depository of the Trust Fund. ~ The Trust Fund
shall be deposited in the BTr. The BTr shall account for the Trust Fund in the manner provided by
the Committee and shall perform such duties as may be determined by the Committee.
CHAPTER WV
COCONUT FARMERS AND INDUSTRY TRUST FUND COMMITTEE

SEC. 11. Creation of the Coconut Farmers and Industry Trust Fund Committee. ~ ‘The Coconut Far
and Industry Trust Fund Committee, hereinafter referred to as the Committee, is hereby created
under the Office of the President. The Committee shall have the following powers and functions:

mers

(a) Coordinate and monitor the implementation of the Coconut Farmers and industry Development
Plan;

(b) Approve any allowable disbursement out of the Trust Fund;
(c) Formulate the Investment Guidelines including the Prohibited Investments;
(4) 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;

{f) Approve the marketing and disposition program for the Coconut Levy Assets approved tor
privatization;

(g) Authorize the sale and other mode of privatization of Coconut Levy Assets approved for
privatization;

(h) Author
disposition;

e the rehabilitation of Coconut Levy Assets approved for privatization pending actual

(i) Facilitate access by coconut farmers and their organizations from the most poverty afflicted
areas of the country to the services, programs and benefits implemented pursuant to the Coconut
Farmers and Industry Development Plan, For purposes of this Act, those already accredited farmers
organizations need not go through another accreditation process;

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

(i) 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) Seven (7) representatives from the government who shall be serving in ex officio capacity:
(1) The Secretary of the Department of Agriculture (DA) as Chairperson;
(2) The Secretary of the Department of Finance (DOF) as Vice Chairperson;
(3) The Secretary of the Department of the Interior and Local Government (DILG);
(4) The Secretary of the Department of Trade and Industry (DTI);

(5) The Secretary of the National Anti-Poverty Commission (NAPC),

(6) The Director-General of the National Economic and Development Authority (NEDA); and
(7) The Administrator of the PCA.

anizations who have considerable

Six (6) representatives from the coconut farmers’ or}
erience and reputable track recor

s, allocated as follows
(2) Two (2) representatives from Luzon;
(2) Two (2) representatives from Visayas; and

(3) Two

2) representatives from Mindanao,

Within thirty (30) days following the effectivity of this Act, the PCA shall promulgate a selection
process of nominees as representatives of the coconut farmers’ organizations in the Committee. The
nominees of the coconut farmers’ organizations shall be validated and shortlisted by the PCA, in
consultation with the NAPC, The list of nominees shall be submitted to the President not later than
sixty (60) days from the start of the selection process :

The government representatives in the Committee shall serve only during thelr respective terms in
office, while the six (6) representatives from coconut farmers’ organizations shall each hold a term
of one (1) year, unless sooner removed for cause. Any of the representatives shall continue to hold
office until their successor is appointed: Provided, That any appointment to fill a vacaney 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 (P50,000,000.00);

(b) Any proposed investment involving more than one hundred million pesos
(P100,000,000.00); and 12

(©) Any disposition or privatization proposal involving more than five hundred million
pesos (P500,000,000.00),

‘The Chairperson, if unavailable, may designate the Vice Chairperson to convene the Committee and
preside over the Committee's meeting on behalf of the Chairperson.


SEC. 15. Obligations of the Members of the Committee. - The members of the Committee shalt 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 benetit, receiving commission on contracts from the Coconut Levy Assets, or taking
advantal ities 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,

2 of corporate appor

SEC. 16, Executive Director of the Committee, - The President, upon recommendation of the
Committee, shall appoint an Executive Director who shall exercise the following powers and
functions:

(a) Administer the programs approved or promulgated by the Committee;
(b) Divect and supervise officials, emplayees, 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:

(dl) Keep and maintain official records and reports of the proceedings of the Committee;
(e) Adininister oaths in all matters falling within the jurisdiction of the Committee; and

(1) Exercise such other duties as may be vested by the Committee that are cofisistent 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

controtled 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 of the Committee on
legal matters.
CHAPTER V
COCONUT FARMERS AND INDUSTRY DEVELOPMENT PLAN

SEC. 20. Preparation of the Coconut Farmers and Industry Development Plan. ~ An Ad Hoc Committee
is hereby created to be composed of the Secretaries of the DA, the Department of Agrarian Reform,
(DAR), the DTI, the Department of Science and Technology (DOST), the Department of Energy
(DOB), the Department of Public Works and Highways (DPWH), the DILG, the NAPC, the NEDA, and
a representative from the farmers’ groups. The Administrator of the PCA shall act as the Ad Hoc
Committee's Chairperson.



The Ad-Hoc Committee, in consultation with the coconut farmers and representatives of the
coconut industry, shall indicate in an integrated coconut industry strategy map the polictes for the
development and rehabilitation of the coconut industry and shall prepare, every five (5) years, a
medium term plan of programs, activities and projects which shall be funded out of the Trust Fund
and which shall be known as the Coconut Farmers and Industry Development Plan. The Plan shall
be consistent with the Philippine Development Plan and shall be subject to mandatory review every
year,

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

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

and inet

ease coconut productivity including

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

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

(d) 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 shalt 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 15 which are recurring, or to be implemented on a regular basis, the allocation shail
indicate the annual fund that may be required to implement the project; and (0) for projects that
are to be implemented or concluded within a period of time, the allocation shall indicate the total
fund that may be required for the implementation of the whole project, itemized according to the
phases or stages of the project.

Within sixty (60) days from the effectivity of this Act, the Plan shall be submitted by the Ad Hoc
Committee to the Coconut Farmers and Industry Trust Fund Committee which shall, in turn, submit
the Plan to the President for approval, Immediately upon its approval, the Plan shall be returned to
the Committee for the disbursement of funds in accordance with the provisions of this Act. Any
amendment to the Plan shall require the approval of the President,

If the President has any objection or any amendment thereto, the President shall notify the
Committee within thirty (30) days from receipt thereof, otherwise the Plan shall be deemed
approved

CHAPTER VI
PRIVATIZATION OF THE COCONUT LEVY ASSETS.

SEC, 24. Privatization of the Coconut Levy Assets, ~ The Committee shall determine the Coconut Levy
Assets that shall be privatized. For this purpose, the Committee shall be guided by the following
factors:

(a) The functions or purposes for which the entity was created are no longer relevant to the State or
no longer consistent with the national development policy of the State;

(b) The functions or purposes of the entity duplicate or unnecessarily overlap with the functions,
programs, activities or projects already provided by another agency;


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

hieving the objectives for

(d) The entity is dormant or nonoperational;
(e) The entity is involved in an activity which is best carried out by the private sector; and

(1) The function, purpose, or nature of ope
under a holding company,

ations of any group of entities requires consolidation

The Committee shall submit its recommendation to the President for approval. The Committee shall
also arrange for the transfer of the Coconut Levy 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
author

zed ta dispose the Coconut Levy Assets that have been approved for privatization. In the
discharge of its mandate, the PMO shall:

(a) Formulate and implement the marketing and disposition program after securing prior approval
of the Committee;

{b) Take possession of and preserve such assets on behalf of the National Government;

(c) Execute and deliver, on behalf of the National Government, deeds of sale, contracts, trust
instruments, and other legally operative documents as may be necessary or appropriate to convey
title to, take possession of, and conserve such assets; :

(d) Engage external expertise as may be necessary in the fulfillment of its tasks under this Act; and
(e} Adopt internal rules and regulations.

Any and all sales and other modes of privatization or disposition shall not be considered final
unless and until approved by the Committee.

SEC, 23. Powers of the Privatization and Management Office (PMO). ~ The PMO is also empowered to
enter into sales through public bidding, negotiated sale, lease, or any form of divestment or
transmission of rights over the Coconut Levy Assets: Provided, That no Coconut Levy Asset shall
revert to the previous owners or their nominees or be sold to individuals who, as determined by
final judgment of a court of law, have mismanaged or diverted such assets.

Prior to the implementation of any privatization plan, the PMO shall exercise the following powers

(a) Require anyone or the subject corporations to adopt and implement cost-reduction measures to
enhance the viability, and therefore the disposability of the corporations to potential buyers,
including measures requiring personnel retrenchment plans or other forms of corporate

downsizing:

(b) Direct anyone or all of the subject corporations to submit to the PMO, within fixed timetables,
such reports and information as the PMO may require in the exercise of its functions under this Act;
and

(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 «letermine transfer values and related valuations at which th
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.

SBC, 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 semiannual basis, submit to the
President and to Congress a report on the status of disposition of the Coconut Levy Assets, whic
shall include, among others, a description of the individual assets disposed of, the purchasers
thereof, the consideration received therefor, and the agreed terms of payment.

‘The PMO shall, within three (3) months following the closure of books at the end of each fiscal year,
submit a comprehensive annual report duly approved or endorsed by the Committee, to the
President and Congress on the status of its privatization efforts and its disposition program for the
Coconut Levy Assets, which shall include the items described in the immediately preceding
paragraph.

SEC. 27. Retention and Dissolution of Coconut Levy Assets, - The Committee shall identify the
Coconut Levy Assets that should be retained by the National Government or reorganized or
abolished, guided by the same standards mentioned in Section 21 of this Act. The Committee shall
submit its recommendation to the President for approval,

ch agency as

Coconut Levy Assets that have been approved for retention shall be transferred to s
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

a


(0) Deposits and loans and/or investments in any domestic bank doing business in the Philippines
and in good standing with the Bangko Sentral ng Pilipinas: Provided, That in case of such deposits,
these shall not exceed at any time the unimpaired capital and surplus or total private deposits of
the depository bank, whichever is smaller: Provided, further, That the bank shall have been first
designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng
Pilipinas: Provided, finally, That such investments shall be subject to a ceiling to be fixed by the
Committee in the implementing rules and regulations.

CHAPTER VI
FINAL PROVISIONS

SEC. 29. Suppletory on Applicability of Republic Act No. 10149 and Executive Order No. 323. ~ {n the
interpretation of the provisions of this Act, the provisions of Republic Act No. 10149, otherwise
known as the “GOCC Governance Act of 2011”, and Executive Order No, 323, entitled, "Constituting
an Inter-Agency Privatization Council (PC) and Creating a Privatization and Management Office
(PMO) under the Department of Finance for the Continuing Privatization of Government Assets and
Corporations", except for Sections 2 and 3 of Article [V of Executive Order No, 323, shall apply
suppletorily.

SEC. 30, Implementing Rules and Regulations, ~ Within thirty (30) days from the date of the
effectivity of this Act, the Committee, in consultation with the PMO, shall formulate and promulgate
the rules and regulations for the proper implementation of this Act.

SEC. 31. Congressional Oversight. ~ The Congressional Oversight Committee on Agricultural and
Fisheries Modernization (COCAFM) shall exercise oversight functions over the implementation of
this Act. The financial review of the program in relation to its performance indicators shall be
subject to the oversight functions of the Joint Congressional Oversight Committee on Public
Expenditures.

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 Jaws, executive and administrative orders, rules and regulations
inconsistent with this Act are hereby repealed or amended accordingly.

SRC, 34, Effectivity, ~ 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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