riCMTKENTH CONGRESS OE THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
i-'O IhlP  Ot I If X
*19 JUL-8 P2 31
S. No.
Introduced by Senator Ralph G. Recto
AN ACT
CREATING THE COCONUT FARMERS AND INDUSTRY I RUST FUND, PROV IDING FOR 
ITS MANAGEMENT AND UTILIZATION, RECONSH IT I ING FOR H I E  PURPOSE THE 
PHILIPPINE COCONUT AU I HORH Y (PCA) AND FOR OTHER PURPOSES
Explanatory Note
Various laws were enacted imposing a levy on coconut products. Republic Act No. 6260 imposed 
the first levy on coconut farmers in 1971. The levies eollected from the coconut fanners, for which they 
were issued receipts to be converted into shares of stock, were primarily used to establish the Coconut 
Investment Fund (CIF). The CIF sought to provide adequate medium and capital investment in the 
coconut industry. Presidential Decree (P.D.) No. 232 created the Philippine Coconut Authority (PCA), 
which took over the collection of the coco levy.
By 1973, abnormal global market fluctuations for fats and oils prompted the issuance of P.D. No. 
276, which established a Coconut Consumers Stabilization Fund (CCSF). The CCSF which was funded 
by imposing an initial levy of PI 5.00 per 100 kilos 
copra resieacla or its equivalent on every first sale, 
was utilized to subsidize the sale of coconut-based products. By April of 1974, P.D. No. 414 granted the 
PCA additional powers such as the authority to adjust the levy imposed. It also expanded the use of the 
CCSF for investment, research and development, and extension of services to the coconut industry.
A few months after, P.D. No. 582 created the Coconut Industry Development Fund (CIDF). The 
CIDF, unlike the CCSF, is a permanent fund, thereby making the collection of the coco levy permanent as 
well. The CIDF shall serve to finance the establishment, operation and maintenance of a hybrid coconut 
seed nut farm.
By July of 1975, P.D. No. 755 empowered PCA to acquire the United Coconut Planters Bank 
(UCPB) as a permanent solution to the perennial credit problems of the coconut industry. The said 
issuance also mandated that all CCSF collections deposited to the UCPB shall be interest free.
P. D. No. 961, which codified all laws pertaining to the coconut industry, provided a number of 
amendments to prior laws and issuances. The CCSF levy, for instance, was passed on to the end users (i.e. 
copra exporters and oil millers) from the coconut farmers. It also declared that both CCSF and CIDF shall 
be owned by coconut farmers in their own private capacities. By virtue of the said legislation, UCPB was 
granted full authority to make investments using the CIDF and CCSF surplus. P.D. No. 1468 akso gave 
UCPB the sole right to administer the coco levy funds. Such mandate led to the creation of the Coconut 
Industry Investment Fund (CIIF).
The levy, primarily intended to insulate the local coconut industry and its consumers from global 
market fluctuations for fats and oils, further expanded over time by virtue of succeeding presidential 
decrees to provide funding for a comprehensive development program to enable the industry to compete 
in the international market. Such funds were then transferred to the CIDF and the CIIF. The CIIF was


used to acquire the oil mills which now comprise the CllF -  Oil Mills Group (CllF-OMG). The CCSF, 
along with the CIDF and the ClIF, constitute what is now known as the Coco Levy Funds.
Substantial collections have been accumulated from the imposition of the coco levy. By 1986, the 
Coco Levy Funds have amounted to as much as P9.7 Billion.
After forty-five years since its establishment, the Coco Levy Funds is now estimated to be worth 
PI00 Billion in aggregate market value, comprising various assets and entities such as the CllF-OMG, 
including its 14 holding companies, as well as the UCPB, United Coconut Chemicals (Cocochcm), United 
Coconut Planters International (UCPl), United Coconut Planters Assurance Coqjoration (Cocolife), and 
the shares of stocks in San Miguel Corporation (SMC) that arc owned by the CllF-OMG Companies.
To date, most if not all of the objectives for the creation of these funds have yet to be realized. 
Under sequestration by the Presidential Commission on Good Government (PCGG), the ownership of the 
assets acquired through the use of Coco Levy Funds remains in question. As a result, neither the coconut 
industry nor the public benefited from the Coco Levy Funds.
With regard to the ownership issue of the Coco Levy Funds, a partial summary judgment of the 
Sandiganbayan on the Republic v. COCOFED, et. al. (Civil Case No. 0033-F) dated May 7, 2004, stated 
that;
“WHEREFORE, in view of the foregoing, we hold that:
“The Motion for Partial Summary Judgment (Re: Defendants CllF
Companies, 14 Holding Companies and Cocofed, et al.) filed by
Plaintiff is hereby GRANTED. ACCORDINGLY, THE CllF, NAMELY:
1. 
Southern Coconut Oil Mills (SOLCOM);
2. 
Cagayan de Oro Oil Co., Inc. (CAGOIL);
3. 
lligan Coconut Industries, Inc. (ILICOCO);
4. 
San Pablo Manufacturing Corp. (SPMC);
5. 
Granc.xport Manufacturing Corp. (GRANEX); and
6. 
Legaspi Oil Co., Inc. (LEGOIL),
“AS WELL AS THE 14 HOLDING COMPANIES, NAMELY;
1. 
Soriano Shares, Inc.;
2. 
ACS Investors, Inc.;
3. 
Roxas Shares, Inc.;
4. 
Arc Investors, Inc.;
5. 
Toda Holdings, Inc.;
6. 
AP Holdings, Inc.;
7. 
Fernandez Holdings, Inc.;
8. 
SMC Officers Corps, Inc.;
9. 
Te Deum Resources, Inc.;
10. 
Anglo Ventures, Inc.;
11. 
Randy Allied Ventures, Inc.;
12. 
Rock Steel Resources, Inc.;
13. 
Valhalla Properties Ltd., Inc.; and
14. 
First Meridian Development, Inc.
“AND THE CUE BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF 
STOCK TOTALING 33,133,266 SHARES AS OF 1983 TOGETHER WITH ALL 
DIVIDENDS DECLARED, PAID AND ISSUED THEREON AS WELL AS ANY 
INCREMENTS THERETO ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF 
PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT IN 
TRUST FOR ALL THE COCONUT FARMERS AND ORDERED RECONVEYED TO 
THE GOVERNMENT.


“The aforementioned Partial Summary Judgment is now deemed a separate appealable 
judgment which finally disposes of the ownership of the CIIF Block of SMC Shares, 
without prejudice to the continuation of proceedings with respect to the remaining claims 
particularly those pertaining to the Cojuangco. et al. block of SMC shares.” (Underscoring 
supplied)
Furthennore, a Supreme Court decision on Republic v. COCOFED ct. al. provides that;
XXX”
The Supreme Court, in its decision dated January 24, 2012, upheld the aforementioned partial 
summary judgment of the Saiuligaiihayan, declaring that the six (6) CllF-OMG companies, their 14 
holding firms, and the CIIF-OMG block of SMC shares as “owned by the Government to be used only for 
the benefit of all coconut farmers and for the development of the coeonut industry”. Hence, putting 
finality on the legal battles as to the ownership and nature of the Coco Levy Funds. The P57 Billion SMC 
shares were turned over to the National Treasury in the same year.
In March 18, 2015, Executive Order Nos. 179 and 180 were issued by then President Aquino to 
provide administrative guidelines for the inventory and privatization of coco levy assets and the use of the 
recovered funds from SMC shares. The implementation of these executive issuances however, was put on 
hold due to a Temporary Restraining Order (TRO) issued by the Supreme Court in the same year. Hence, 
the disposition of Coco Levy Funds remains unsettled. Therefore, a legislative action on the disposition of 
the Coco Levy Funds is warranted.
This measure mandates the Privatization and Management Office (PMO) to privatize all assets 
acquired through the use of the Coco Levy Funds. Upon privatization, the funds generated shall then be 
transferred to a Trust Fund to be known as the Coconut Farmers and Industry Fund, to be creatctl under 
this proposed legislation.
This bill shall also reconstitute the Philippine Coconut Authority (PCA) with the majority of the 
Board members coming from the coconut farmers and industry sectors. The reconstituted PCA shall craft 
the Coconut Farmers and Industry Development Plan, manage the Trust Fund; including its investment to 
government securities and implement the Plan through the implementing agencies. A menu of programs 
to be funded by the Trust Fund are also listed in the bill.
In order to expedite the rehabilitation and development of the coconut industry, the Trust Fund 
shall be maintained for a period of twenty-five (25) years from the effectivity of this proposed measure.
This bill also guarantees an annual appropriation of Ten Billion Pesos (PI0,0000,000.00) for the 
PCA to augment the Trust Fund and support other programs that will increase the income of farmers.
During the 17th Congress, the same measure has been approved by both Houses of Congress with 
the majority of substantive amendments of this representation adopted. The same bill was used as the 
working draft for this proposal. Additional substantive amendments to further guarantee the effective 
implemcntaion of the bill were introduced in this version.
In legislating this proposed measure, we should be reminded that most of the coconut fanners 
during the time the levies were exacted are already approaching their twilight years and, thus, there is an 
urgent need for the government to fulllll its promise that they be recognized as the ultimate beneficiaries 
of such funds.
In view of the foregoing, the passage of this bill is earnestly sought.
//mksbc


KIC.IITEENTH CONGRESS OE THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
'I**'*-
ii'ifl'rr of ! •: .
*19 
JUL-8 P2 31
S. N o .
RECEIVED
Introduced by Senator Ralph G. Recto
AN ACT
CREATING THE COCONUT FARMERS AND INDUS I R\ TRUS I FUND, PROMDING FOR 
ITS MANAGEMENT AND UTILIZATION, RECONSTITUTING FOR THE PURPOSE THE 
PHILIPPINE COCONUT AUTHORITY (PCA) AND FOR OTHER PI RPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
1 
SECTION I. Short Title. - This Act shall be known as the "Coeonut Farmers and Industry
2 
Development Act".
3 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to consolidate the
4 
benefits due to eoconut fanners, especially the poor and marginalized, under various statutes and to
5 
expedite the delivery thereof in order to attain increased fann productivity and income of coconut farmers
6 
through the rehabilitation and modernization of the coconut industry.
7 
I
8 
Definition of Terms
9 
SEC. 3. Definition of Terms. - The following tenns shall mean:
10 
(a) “CIIF” shall refer to the Coconut Industry Investment Fund created by virtue of Presidential
11 
Decree 1468;
12 
(b) "CIIF - Oil Mills Group" shall refer to the CllF companies, namely. Southern Luzon Coconut Oil
13 
Mills; Cagayan de Oro Oil Co. Inc.; lligan Coconut Industries, Inc.; San Pablo Manufacturing Corp.;
14 
Granexport Manufacturing Corp.; and Legaspi Oil Co, Inc.;
15 
(c) 
"CIIF Holding Companie.s" shall refer to the fourteen (14) holding eompanies; namely: Anglo
16 
Ventures Corporation; ASC Investors, Ine.; A.R.C. Investors, Inc.; AP Holdings, Inc.; Fernandez
17 
Holdings, Inc.; First Meridian Development, Inc.; Randy Allied Ventures, Inc.; Rock Steel Resources,
18 
Inc.; Roxas Shares, Inc.; San Miguel Officers Corps., Ine.; Soriano Shares, Inc.; Te Deum Resources,
19 
Inc.; Toda Holdings, Inc.; and Valhalla Properties Limited, Inc.;
20 
(d) 
""Converted SMC Series I Preferred Share.s" shall refer to the 753,848,312 preferred shares of
21 
stock in SMC declared owned by the government, together with all the dividends declared, paid or issued
Page 1 of 13


1 
thereon, as well as any increments thereto arising from, but not limited to, the exercise of pre-emptive
2 
rights;
3 
(e) 
“Coconut Fanner “ .shall refer to:
4 
1) An owner of a coconut fami, that is not more than five (5) hectares, who:
5 
i) tills the land (owner-cultivator), or
6 
ii) does not till the land, but has control and supervision over the cultivation of the
7 
coconut fann;
8 
2) A leaseholder or tenant who tills or supervises the cultivation of the farm; or
9 
3) A fann worker or laborer, whether seasonal or itinerant, engaged in the harvesting of
10 
the nuts and processing of copra as a major means of livelihood;
11 
(0 "Coconut Levy As.sets" shall refer to any and all kinds of property, whether real or personal,
12 
tangible or intangible, wherever situated, which have been acquired through the Coconut Levy Funds as
13 
defined in this Section, including those assets that may be recovered in favor of the government, as well
14 
as the fruits, or income therefrom, including those acquired in exchange or substitution thereof
15 
These shall include, among others, the following:
16 
i. 
The shares of stock in United Coconut Planters Bank (UCPB) that were determined
17 
to be owned by the government;
18 
ii. The CllF - Oil Mills Group;
19 
iii. The CllF Holding Companies; and
20 
iv. 
The Converted SMC Series 1 Preferred Shares;
21 
(g) "'Coconut Levy Funds" shall refer to various funds generated from levies, taxes, charges, and
22 
other fees exacted or imposed pursuant to or in connection with the sale of copra rececada or its
23 
equivalent in other coconut products, and collected for the most part from coconut farmers, planters,
24 
millers, refiners, processors, exporters, desiccators and other end-users of copra rececada or its equivalent
25 
in other coconut products.
26 
Specifically, the tenn shall refer to any or all of the following:
27 
i. The Coconut Investment Fund created under Republic Act No. 6260;
28 
ii. The Coconut Consumers Stabilization Fund, later renamed as the Coconut Industry
29 
Stabilization Fund, created under Presidential Decree No. 276;
30 
iii. 
The Coconut Industry Development Fund created under Presidential Decree No.
31 
582;
Page 2 of 13


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
iv. 
The Coconut Industry Investment Fund created under Presidential Decree No. 
1468;and
V. 
The Coconut Reserve Fund under Presidential Deeree No. 1468 and Presidential 
Decree No. 1842.
(h) 
"PCA" shall refer to the Philippine Coconut Authority, created under Presidential Decree 
232 (S. 1973), as amended by Presidential Decree 1468 (S. 1978);
(i) 
"PCGG" shall refer to the Presidential Commission on Good Government, created under 
Executive Order No. 1 (S. 1986);
(j) 
"PMO" shall refer to the Privatization and Management Office organized under Article III 
of Executive Order No. 323 (S. 2000);
(k) 
"Plan" shall refer to the Coconut Fanners and Industry Development Plan, to be prepared 
under Section 11 of this Act;
(l) 
"’President" shall refer to the President of the Republic of the Philippines.
(m) 
"Tnust Fund" shall refer to the Coconut Farmers and Industry Trust Fund created under 
Section 6 of this Act;
(n) 
" Trust Fund Income" shall refer to the income, interest earnings, and other monetary 
benefits, realized by and aecruing to the Trust Fund or any portion thereof; and
(o) 
"Trust Fund Prineiped" shall refer to:
(i)
The initial Trust Principal which shall be composed of the proceeds from the 
redemption of the Converted SMC Series 1 Preferred Shares, dividends declared, 
paid, or issued on the Converted SMC Series 1 Preferred Shares, and all income or 
interest derived therefrom as of the effectivity of this Act, and any other cash 
Coconut Levy Asset, that are held by the Bureau of Treasury (BTr) as a special 
account in the general fund and as an escrow account, and cash held by UCPB as 
administrator of the CIIF;
(ii)
Any and all proceeds of privatization of the Coconut Levy Assets remitted thereto 
by the Privatization and Management Office, and 
(iii) 
Proceeds of privatization of any or all properties or assets conveyed by any person, 
group or entity to the PCA, from time to time, as provided in Section 7 hereof
II
Audit and Recoiiveyaiicc of Coconut Levy Assets 
SEC, 4. Accounting, Inventory and Audit of Coconut Levy Assets. -  Within thirty (30) days from
the ettectivity ot this Act, the PCGG shall conduct a complete accounting and inventory of the Coconut
Page 3 of 13


1 
Levy Assets, including the amount, value, description and nature of such funds, properties, assets,
2 
records, choses in action, and other rights, claims, or causes of action pertaining thereto, as well as the
3 
investments, disbursements and expenditures relating to the Coconut Levy Funds and submit a report to
4 
the Office of the President, the PCA, and the Commission on Audit (COA).
5 
The COA shall audit the accounting and inventory of the Coconut Levy Assets prepared by the
6 
PCGG, for the purpose of, among others, determining the completeness of the said inventory, establishing
7 
the reasonableness of the asset valuation, and tracing the flow of the Coconut Levy Funds.
8 
Within sixty (60) days from the submission of the accounting and inventory of the Coconut Levy
9 
Assets, the COA shall submit to the PCA its audit report, together with a complete list of Coconut Levy
10 
Assets and their valuation, and the empirical basis and the methodologies employed for the said valuation.
11 
The PCA shall, within fifteen (15) days from its receipt of the audit report, publish the same in at
12 
least two (2) newspapers of national circulation.
13 
Nothing herein shall be construed as preventing the PMO from procuring a third-party appraisal of
14 
any of the Coconut Levy Assets prior to or in the course of preparing the privatization or disposition plans
15 
for the said assets.
16 
SEC. 5, Reconveyance of Coconut Levy Assets. -  Immediately upon the effectivity of this Act, the
17 
PCGG, the government representatives to the boards of sequestered/surrendered corporations, and any
18 
government agency or person having any Coeonut Levy Asset in its administration, authority, custody or
19 
control which have been finally declared by the Supreme Court as belonging to the government, shall
20 
perfonn or cause the performance of the following:
21 
(1) Reconvey title over the Coeonut Levy Assets to the Republie of the Philippines;
22 
(2) Deliver for safekeeping all stoek eertifieates and other evidenee of ownership to the BTr; and
23 
(3) Transfer all cash Coeonut Levy Assets to the Trust Fund.
24 
Provided, That no temporary restraining order (TRO) or any injunetion order can be issued except
25 
by the Supreme Court.
26 
The COA shall conduct an audit to detemiine compliance with pertinent laws, rules and
27 
regulations on reeonveyance of the Coeonut Levy Assets to the Republie of the Philippines.
28 
III
29 
Creation of the Coconut Industry Fund, its Purposes, and Utilization
30 
SEC. 6. The Coconut Fanners and Industry Trust Fund. -  There is hereby ereated a trust fund to
31 
be known as the “Coconut Farmers and Industry Trust Fund,” herein referred to as the "Trust Fund,"
Page 4 of 13


1 
which shall he capitalized, managed, invested, utilized and accounted for in the manner provided in this
2 
Act.
3 
The Trust Fund shall be maintained for a period not exceeding twenty-five (25) years from the
4 
effectivity of this Aet and shall be used exclusively for the benefit of the coconut farmers and for the
5 
development of the coconut industry.
6 
SEC. 7. Capitalization of the Trust Fund. -  The proceeds from the redemption of the Converted
7 
SMC Series 1 Preferred Shares, dividends declared, paid, or issued on the Converted SMC Series 1
8 
Preferred Shares, and all income or interest derived therefrom as of the effectivity of this Act, and any
9 
other cash Coconut Levy Asset, that are held by the BTr as a special account in the general fund and as an
10 
escrow account, and cash held by UCPB as administrator of the CllF, shall form part of the initial Trust
11 
Principal of the Trust Fund. For this purpose, any provision of law to the contrary notwithstanding, the
12 
BTr and UCPB shall transfer any and all monies to the Trust Fund.
13 
The Trust Fund shall thereafter be augmented with all proceeds from privatization/disposition of
14 
the Coconut Levy Assets remitted directly thereto by the PMO in accordance with this Act, any and all
15 
fomis of income, interests, earnings, yields, or any monetary benefit derived prior to the privatization or
16 
disposition of any of the Coconut Levy Assets, and any and all fomis of income, interests, earnings,
17 
yields, or any monetary benefit derived from retained Coconut Levy Assets.
18 
Nothing in this Act shall be understood to prevent or prohibit any person, group or entity from
19 
conveying to the PCA other properties and/or additional assets either for the use of the coconut industry,
20 
or for purposes of privatization, in which case, the proceeds of such privatization shall form part of the
21 
Tmst Fund.
22 
SEC. 8. Management and Investment of the Trust Fund. -  The PCA shall manage and invest the
23 
Trust Fund Principal with the skill, care, pmdcnce and extraordinary diligence necessary under the
24 
circumstances that a prudent person acting in like capacity and familiar with such matters would exercise
25 
in the conduct of an enterprise of a like character and with similar aims: Provided, That the PCA shall
26 
assume such responsibility of managing and investing the Trust Fund only after its current Board have
27 
been reconstituted under Section 11 of this Act. For this purpose, it shall adhere to the basic principles of
28 
safety, capital preservation, growth, and liquidity.
Page 5 of 13


1 
To ensure the safety of the funds and for assured returns, all of the Trust Fund shall be placed only
2 
in Philippine govcrnincnt securities.
3 
Immediately upon the effectivity of this Act, the BTr shall invest all cash Coconut Levy Assets
4 
under its administration in government securities that will provide the best possible return for the Trust
5 
Fund.
6 
For the purpose of the management and investment of the Trust Fund, the PC A shall have the
7 
following powers and functions:
8 
(a) Approve disbursements from the Trust Fund, including the funding for (i) the fonnulation of
9 
the Coconut Farmers and Industry Development Plan, and (ii) the conduct of the inventory and
10 
audit of the Coconut Levy Assets, which shall be charged against the initial Trust Fund
11 
principal or the Trust Fund Income when available;
12 
(b) Exercise on behalf of the national government all rights and incidents of ownership to the
13 
coconut levy assets, including the right to vote, whether directly or through duly authorized
14 
nominees, shares of stock held in the name of the national government;
15 
(c) Approve or disapprove, on behalf of the national government and without need of any further
16 
approval by, or other action from any other government institution or agency, the sale,
17 
disposition or dissolution of such assets, which sale or disposition shall be conducted by the
18 
PMO: Provided, That the PCA itself or any of its members, are prohibited from undertaking
19 
the marketing of any such assets, participating in the negotiation for their sale, or making the
20 
sale itself, or bring about any situation which may give rise to a conflict of interest;
21 
(d) Approve the financial requirements of the PMO in relation to its functions set forth in this Act,
22 
including its annual budget for operations, conseiwation, rehabilitation, management and
23 
privatization/disposition of the Coconut Levy Assets transferred and entrusted under its care;
24 
(e) Issue policies, ixiles, and guidelines as may be necessary to implement the provisions of this
25 
Act;
26 
(f) Maintain records and accounts of all investments, receipts, disbursements and other
27 
transactions relating to the management, administration and utilization of the Trust Fund:
Page 6 of 13


1 
?n)vidcd, That these records and accounts shall be maintained in accordance with existing
2 
accounting and auditing laws, rules and regulations, and shall be audited by the COA; and
3 
(g) Exercise such other incidental powers and functions as may be necessary to attain the
4 
objectives of this Act.
5 
SEC. 9. Utilization of the Trust Fund. -  All dispositions or utilization of the Trust Fund or any
6 
portion thereof shall be in accordance with the Coconut Fanners and Industry Development Plan as
7 
provided for in Section 12 of this Act: Provided, That for purposes of the implementation of the Plan, the
8 
execution of programs and projects identified in the Plan that are allowed to be funded out of the Trust
9 
Fund, and pending the accrual or availability of the Trust Fund Income, the entire amount of the Trust
10 
Fund shall be disbursed by the PCA commencing from the approval of the Plan by the President at an
11 
annual allocation of Five Billion Pesos (P5,000,000,000.00), subject to annual government audit, and
12 
shall proceed until such time that the fund is fully utilized: Provided, further. That any unused portion of
13 
the annual allocation of Five Billion Pesos (P5,000,000,000.00) shall revert to and fomi part of the Trust
14 
Fund.
15 
The Coco Levy Trust Fund shall be utilized as follows:
16 
(a) Shared facilities program, thirty percent (30%);
17 
(b) Scholarship program, fifteen percent (15%);
18 
(c) Empowerment of coconut fanner organization and their cooperatives, fifteen percent (15%);
19 
(d) Fann improvement to encourage self-sufficiency, thirty percent (30%); and
20 
(e) Health and medical program, ten percent (10%).
21 
SEC. 10. Designation of the Bureau of Treasury as Depository of the Trust Fund. -  Any law to the
22 
contrary notwithstanding, the Bureau of Trcasui’y is hereby designated as the depository of the Trust
23 
Fund, which shall: (a) hold and account the Trust Fund in the manner set forth by the PCA; and (b)
24 
release funds directly to the implementing agencies upon the instruction of the PCA.
25 
IV
26 
The Philippine Coconut Authority
27 
SEC. 11. The Philippine Coconut Authority (PCA). - The PCA, an independent public corporation
28 
created under Presidential Decree No. 1468, shall be reconstituted and strengthened to ensure the
29 
participation of coconut fanners in the crafting and implementation of the Coconut Farmers and Industry
Page 7 of 13


1 
Development Plan. The composition of the PCA Board is hereby amended and the same shall now be
2 
composed of the following:
3 
(a) Five representatives from the Government, the DA Secretary as Chairperson; DOF Secretary as
4 
Vice Chairperson; and as members, the DBM Secretary, PCA Administrator, and one official with
5 
a Cabinet rank to be appointed by the President; and
6 
(b) Six (6) representatives from the coconut fanners sector, divided into two (2) representatives each
7 
for the island groupings of Luzon, Visayas and Mindanao, as members: Vrovitled. That t/hc six (6)
8 
representatives from the coconut farmers sector must be Filipino citizens, registered with the
9 
coconut farmers registry, have considerable experience and reputable track record in promoting
10 
coconut farmers interests and welfare, and nominated by coconut fanners organizations or
11 
cooperatives that are aetive for the past three (3) years in fanner organization and development or
12 
community enterprise development. They shall be appointed by the President from a list of four
13 
(4) nominees for each island grouping. . They shall each hold a term of three (3) years, and may be
14 
reappointed once. Any appointment to fill the vacancy arising from death, removal, retirement or
15 
resignation of the representative of the coconut farmer sector shall only be for the unexpired term.
16 
Within thirty (30) days following the effectivity of this act, the Board shall promulgate a nomination
17 
and screening process of nominees as representatives of the coconut farmers sector in the board, in
18 
consultation with coconut fanners organizations.
19 
V
20 
Coconut Farmers and Industry Development Plan
21 
SEC. 12. Preparation of the Coeonut Farmers and Industry Development Plan. -  The PCA shall
22 
prepare the Coconut Fanners and Industry Development Plan.
23 
In the performance of its functions, the PCA shall consult coconut fanners and their organizations,
24 
industry associations, civil society organizations, academe, government agencies concerned and other
25 
stakeholders in the coconut industry.
26 
The Plan shall set the directions and policies for the development and rehabilitation of the coconut
27 
industry. It shall define the roles and contribution of Coconut Levy Assets to support said rehabilitation
28 
and development, which shall serve as basis in the retention or privatization/disposition of any or all of
29 
the Coconut Levy Assets.
30 
In the formulation of the Plan, the PCA shall be guided by the following objectives:
31 
(a) Increased fann productivity and incomes of coconut farmers;
32 
(b) Intensive effort on intercropping and livestock raising;
33 
(c) Establishment of coconut-based enterprises;
34 
(d) Rehabilitation and modernization of the coconut industry towards global competitiveness; and
Page 8 of 13


(e) Poverty alleviation and social equity.
2 
The Plan shall include a national program for (a) coconut crop productivity, intercropping and
3 
livestock raising; (b) community-based coconut enterprises, including integrated processing of coconut
4 
products and downstream products; (c) coconut tanners organization and development; and (d) social
5 
protection that directly benefit coconut farmers, farm workers, and their families, taking into
6 
consideration existing social protection programs of the government Provided. That the Plan shall take
7 
into aceount the feedstoek demand for biofuels and other existing policies on the use of coconuts;
8 
Provided, further. That the PCA shall, within three (3) months from the effectivity of this Act, complete
9 
the Coconut Fanners Registry.
10 
The Plan shall provide the criteria for targeting beneficiaries, the indicators in determining the
11 
attainment of the abovementioned objectives, and the mechanisms for monitoring and evaluating the
12 
impact of the different components of the program.
13 
The Plan shall also include strategic and inclusive training programs dedicated for our coconut
14 
fanners based from a comprehensive review of existing training programs.
15 
Programs relating to planting, replanting, fertilization, research and development, market
16 
promotion, farm-to-market roads, and direct lending, shall be funded through regular appropriations.
17 
The Plan shall provide an indicative funding requirement or allocation for the implementation of
18 
any and all of the programs and projects to be funded by the Trust Fund Principal and the Trust Fund
19 
Income, which funding or allocation shall be itemized or broken down on a project-to-project basis:
20 
Provided. That, (i) for projects which are recurring, or to be implemented on a regular basis, the allocation
21 
shall indicate the annual amount that may be required to implement said project; (ii) for projects that arc
22 
to be implemented or concluded within a period of time, the allocation shall indicate the total fund that
23 
may be required for the implementation of the whole project, itemized according to the pliases or stages of
24 
said project; and (iii) that all projects shall be evaluated on the basis of financial returns and increased
25 
fanners income.
26 
Within one hundred eighty (180) days from the effectivity of this Act, the Plan shall be submitted
27 
to the President, as endorsed by the PCA, for approval.
28 
Any amendment or revision to the Plan shall require the approval of the President
Page 9 of 13


1 
VI
2 
Privatization of the Coconut Levy Assets
3 
SEC. 13. Privatization of the Coconut Levy Assets. -  Pursuant to the direction and policies set in
4 
the Plan, the PCA through tlie PMO shall privatize all Coco Levy Assets as identified under Section 4
5 
hereof.
6 
For this purpose, the PCA shall be guided by any of the following standards:
7 
(a) The functions or purposes for which the entity was created are no longer relevant to the State
8 
or no longer consistent with the national development policy of the State;
9 
(b) The functions or purposes of the entity duplicate or unnecessarily overlap with functions,
10 
programs, activities or projects already provided by another agency;
11 
(c) The entity is not producing the desired outcomes, or is no longer achieving the objectives for
12 
which it was originally designed and implemented;
13 
(d) The entity is domiant or non-operational; and
14 
(e) The function, purpose, or nature or operations of any group of entities requires consolidation
15 
under a holding company.
16 
The PCA shall arrange the transfer of Coconut Levy Assets to be privatized to the PMO.
17 
SEC. 14. AtUlitional Mandate of the Privatization and Management Office (PMO). -  In addition to
18 
its powers, duties and functions under Executive Order No. 323 (S. 2000), the PMO, shall, for and in
19 
behalf of the National Government, take title to and possession of conserve, provisionally manage, and
20 
dispose of the Coconut Levy Assets which have been identified for privatization and disposition.
21 
In the discharge of its mandate, the PMO is hereby empowered to; (i) implement the marketing
22 
and disposition program of the Coconut Levy Assets; (ii) execute and deliver, on behalf of the National
23 
Government, deeds of sale, contracts, trust instruments, and other legally operative documents as may be
24 
necessary or appropriate to convey title to, take possession of and conserve, such assets; (iii) engage
25 
external expertise as may be necessary in the fulfillment of its tasks under this Act; and (iv) to adopt
26 
internal rules and regulations in relation to the marketing and disposition of the Coconut Levy Assets.
27 
Any and all sales and other modes of privatization or disposition shall not be considered final
28 
unless approved or ratified by the PCA.
29 
SEC. 15. Powers of the Privatization and Management Office. - The PMO is hereby accorded
30 
discretionary powers with regard to the preparation of the privatization plans and policies of the Coconut
Page 10 of 13


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
Levy Assets transferred to it. The PMO is empowered to enter into sales through public bidding, 
negotiated sale, lease, or any fomi of divestment or transmission of rights over the Coconut Levy Assets, 
including a partnership with the private sector in the management or operation of these Coeonut Levy 
Assets prior to actual sale or disposition.
Prior to the implementation of any privatization plan, the PMO shall have the following powers:
(i) 
Require any one or more of the subject corporations to adopt and implement cost-reduetion 
measures to enhance the viability, and therefore the disposability of such corporations, to 
potential buyers, including measures requiring personnel retrenchment plans or other fomis 
of corporate downsizing;
(ii) 
Direet any one or all of the subject corporations to submit to the PMO, within fixed time­
tables, such reports and information as the PMO may require in the exercise of its 
ownership, administrative, and disposition over such corporations or their assets; and
(iii) Cause the subject corporations to undergo rehabilitation, merger, eonsolidation, 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 PCA.
SEC. 16. Determination Transfer Value. - The PCA is hereby vested with full and complete powers 
and prerogatives to determine transfer values and related valuations at which the Coconut Levy Assets 
shall be transferred and conveyed to the PMO pursuant to the mandate of this Aet and upon reasonable 
consultation with the COA or a third-party appraiser: Provicletf That any valuation approved by the PCA 
for purposes of the transfer to the PMO shall not be deemed a condonation, waiver, or extinguishment of 
any obligation by any third party whose vested rights may be impaired by sueh transfer.
SEC. 17. Remittanee of Proceeds of Privatization. - Any provision of law to the eontrary 
notwithstanding, all proceeds or receipts from the sale of Coconut Levy Assets, exeept portions thereof 
for reimbursable custodianship and operational expenses, or such amount approved by the PCA to be 
retained by the PMO, shall be remitted to the Trust Fund.
SEC. 18. Reporting Requirements. - The PCA shall, on a semi-annual basis, submit to the President 
and to Congress a report on the status of disposition of the Coconut Levy Assets, which shall include, 
among others, a description of the individual assets as disposed of, their purchasers prospective and past, 
the consideration received, and the terms of payment as agreed upon.
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 PCA, 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 deseribed in the immediately preceding paragraph.
VII
Farm Schools for the Coconut Industry
Page 11 of 13


1 
SEC. 19. Farm Schools ami Hitman Resource Development for the Coconut Industry. -  The PCA,
2 
in coordination with the Technical Education and Skills Development Authority (TESDA) shall endeavor
3 
to establish coconut industry farm schools in evei7 coconut producing province to support and enlarge the
4 
trained human resource pool of coconut fanners and help them become more productive, more
5 
competitive and adept to intercropping with such alternative fann crops as cacao, coffee, banana and other
6 
suitable activities as livestock raising.
7
8 
VIII
9 
Appropriations
10 
SEC. 20. Appropriations for the PCA. -  The amount of not less than Ten Billion Pesos
11 
(PI0,000,000,000.00) shall be included in the Annual Appropriations of the PCA to augment the Coconut
12 
Farmers and Industry Development Fund; increase the income of coconut farmers; and support the
13 
developmental activities of the PCA; Provided, That the allocation and use of such annual appropriation
14 
shall be reviewed by Congress after six (6) years from the approval of this Act. The said appropriation
15 
shall be allocated as follows;
16 
(a) Infrastructure program, twenty percent (20%);
17 
(b) Planting and replanting, twenty percent (20%);
18 
(c) Intercropping, ten percent (10%);
19 
(d) Shared facilities, twenty percent (20%);
20 
(e) Research and development, ten percent (10%);
21 
(0 Fertilization, live percent (5%);
22 
(g) New products and all derivatives of coconut oil and marketing, five percent (5%); and
23 
(h) Credit through Land Bank of the Philippines (LBP) and Development Bank of the Philippines
24 
(DBP), ten percent (10%);
25 
For a total of one hundred percent (100%); Provided, That the administrative expenses to
26 
implement the programs or projects shall not exceed ten percent (10%) of the program or project costs.
27 
IX
28 
Filial Provisions
29 
SEC. 21. Suppletory Application of Republic Act No. 10149. -  The provisions of Republic Act No.
30 
10149, otherwise known as the “GOCC Governance Act of 2011”, insofar as they are not inconsistent
31 
with the provisions of this Act, shall apply suppletorily.
32 
SEC. 22. Congre.ssional Oversight. -  The Congressional Oversight Committee on Agricultural
33 
and Fisheries Modernization (COCAFM) shall exercise oversight on the implementation of this Act.
Page 12 of 13


1 
SEC. 23. Separability Clause. -  If any provision of this Act is declared invalid or unconstitutional,
2 
the other provisions not affected by such declaration shall remain in full force and effect.
3 
SEC. 24. Repealing Clause. -  All laws, executive orders, administrative orders, and rules and
4 
regulations inconsistent with this Act are hereby repealed or amended accordingly.
5 
SEC. 25. EJfectivity Clause. -  This Act shall take effect fifteen (15) days after its complete
6 
publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
Page 13 of 13