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

Seventeenth Congress
First Regular Session

HOUSE BILL No, 4286

Introduced by Representative Sharon 8. Garin

EXPLANATORY NOTE

From 1971 to 1982, small and marginalized coconut farmers have been remitting coconut
levy funds to the government, ‘These funds were intended to support and advance the development
of the coconut industry for the benefit of coconut farmers

Various laws and issuances were signed to ensure that coconut levy funds were collected
throughout the years. These include:

1) On June 19, 1971, Republic Act 6260, known as the “Coconut Investment Fund” (CIF)
was implemented and authorized the collection from coconut farmers a sum equivalent to
0.55 on the first domestic sale for every 100kg of copra:

2) On August 20, 1973, P.D. 276 created the Coconut Consumers Stabilization Fund (CCSF)
which imposed an additional of P15 for every 100kg sale of copra resecada;

3) On November 14, 1974, the Coconut Industry Development Fund (CIDF) was established
to finance the establishment, operation, and maintenance of hybrid coco seed farm and
replanting program. The levy was made permanent; and

4) On October 2, 1981, PD 1841 (the Coconut Industry Stabilization Fund) revised levies
and imposed the amount of P50 for every 100kg of copra resecada and later was raised to
P100 per 100kg of eopra,

As a testament to the effectivity of collections during the first decade of its implementation,
through the blood and sweat of the coconut farmers, the levy accumulated the amount of P9,625
billion.

After the EDSA Revolution of 1986, the administration of the late former President Corazon
Aquino, through the Presidential Commission on Good Government, sequestered all assets acquired
by Marcos and his cronies ineluding the coco levy funds. But despite the huge amount of existing
coconut levy funds, the genuine stakeholders ~ the small and marginalized coconut farmers, remain
underprivileged and the coconut industry remains stagnant and dragged down,



It is estimated that the coco levy funds, inclusive of eamings, interests and other increments,
have grown to some P200 billion according to a July 11, 2013 report of the Philippine Daily
Inquirer.

It was a great moment when after almost four decades, the highest court of the land affirmed
that the funds were indeed owned by the small coconut farmers and should be treated as public
funds,

On January 24, 2012, the Supreme Court declared the CIIF block of shares as having been
purchased by means of the coconut levy funds and therefore should be treated as public funds.

Executive Orders 312 and 313 of former President Estrada, which sought to privatize shares
in San Miguel Corporation that were bought with coco levy funds, were junked by the Supreme
Court in April 2012.

The series of promulgations of the Supreme Court in September and November 2012
declared that the Cojuangeo’s claims to the UCPB and SMC stocks that were bought with the coco
levy funds are public funds. On October 5, 2012, San Miguel Corporation formally paid the
government, through the PCGG, the sum of almost P58 billion for the preferred shares it bought.

In the most recent ruling of the Supreme Court dated July 9, 2013, the high court upheld its
decision that shares in the UCPB of Cojuangco were owned by the government. The coconut levy
funds should be used for the benefit of the small and marginalized coconut farmers and farm
workers

The abovementioned decisions by the courts regarding the coco levy funds affirm the need to
return these funds to their rightful owners. This bill seeks to address the decades-long struggle of
coconut farmers by enacting a genuine law on the use of the coconut levy funds. It is meant to
provide a mechanism to protect the rights, welfare and interest of the small and marginalized coconut
farmers and farm workers.

In view of the forgoing, the passage of this bill is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS,
First Regular Session

House Bin NoAZBE

Introduced by Representative Sharon S. Garin

AN ACT
ESTABLISHING THE COCONUT FARMERS AND INDUSTRY TRUST FUND
AND PROVIDING FOR ITS MANAGEMENT AND UTILIZATION

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

SECTION 1. Short Title, This Act shall be known as the "Coconut Farmers and
Industry Development Act."

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

I
Definition of Terms

SEC. 3. Definition of Terms, As used in this Act:

(a) Coconut Industry Investment Fund (CHF), 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 busin

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;

(>) CLIF Holding Companies refer to the fourteen (14) holding companies,
namely: Anglo Ventures Corporation; ACS Investors, Incorporated; Are Investors,

Incorporated; AP Holdings, Incorporated; Fernandez Holdings, Incorporated; First

Meridian Development, Incorporated; Randy Allied Ventures, Incorporated; Rock
Steel Resources, Incorporated; Roxas Shares, Incorporated; San Miguel Officers
Corporation, Incorporated; Soriano Shares, Incorporated; Te Deum Resources,

Incorporated; Toda Holdings, Inc ated; and Valhalla Properties Limited,

Incorporated, created by the CIIF Oil Mills Group to acquire, hold and manage the
shares of stocks of San Miguel Corporation (SMC);

(ce) CIIF - Oil Mills Group refers to the six (6) CIIF companies, namely,

Southern Luzon Coconut Oil Mills; Cagayan de Oro Oil Company, Incorporated;
ligan Coconut Industries, Incorporated; San Pablo Manufacturing Corporation;
Granexport Manufacturing Corporation; and Legaspi Oil Company, Incorporated,
acquired by the UCPB using the CIIF;

(4) CILF SMC Block Shares refer to the 33,133,266 shares of stock in SMC,
sequestered by the PCGG in April 1986 representing 31% of the total outstanding
capital stock of SMC;

(c) Converted SMC Series 1 Preferred Shares refer to that portion of the

CIF SMC Block Shares covering 753,848,312 preferred shares of stock in SMC

representing 24% of the outstanding capital stock of SM‘

(A) Coconut farmer refers to:

(1) Farmer-owner of a coconut farm, which is not more than five (5)
hectares, who:

(i) tills the land (owner-cultivator), or


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

(2) A non-owner of the coconut farm who is either a:
(i) leaseholder or tenant who tills or supervises the cultivation of

the farm; or

(ii) farm worker or laborer, whether seasonal or itinerant, engaged

in the harvesting of the nuts and processing of copra as major

means of livelihood,
(2) Coconut Levy Assets refer to any and all kinds of property, whether real or

personal, tangible or intangible, wherever situated, which have been acquired

ts

through or otherwise funded by the Coconut Levy Funds, including those a
that may be recovered in favor of the government, as well as the fruits or income
derived therefrom, including those acquired in exchange or substitution thereof,
cluding the following:
(1) the shares of stock in UCPB determined to be owned by the Government;
(2) the CIF Oil Mills Group;

(3) the CIIF Holding Companies; and

(4) the Converted SMC Series | Preferred Share

(h) Coconut Levy Funds refer to various funds generated from levies, taxes,
charges, and other fees exacted or imposed pursuant to or in connection with the
sale of copra rececada or its equivalent in other coconut products, and collected
for the most part from coconut farmers, planters, millers, refiners, processors,
exporters, desiccators and other end-users of copra reeecada or its equivalent in
other coconut products. These shall refer to any and all of the following:

(J) 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
Deeree No, 1468; and

(5) the Coconut Reserve Fund under Pres
Presidential Decree No. 1842,

lential Decree No. 1468 and

jn

ment Guidelines refer to the investment management guidelines,
rules, procedures, and policies to be formulated by the Coconut Farmers and Trust
Fund Committee created under Section 11 of this Act, and as may be amended
from time to time, which shall provide the parameters for investments of the Trust

Income or any portion thereof, and shall include, among others, asset allocation,

criteria for selection of fund managers, and required income from the fund, and
other investment management threshold requirements.
@) Trust Income refers to the income, interest earnings, and other monetary
benefits, realized by and accruing to the Trust Fund or any portion thereof.
(Kk) Trust Prineipal refers to:
(1) the initial Trust Principal composed of dividends declared, paid, or issued
on the Converted SMC Series { Preferred Shares, the proceeds from the

redemption of the Converted SMC 1 Preferred Shares, and all it

come

or intere:

derived therefrom as of the effectivity of this Act and any
other cash Coconut Levy Asset deposited in the Bureau of the Treasury
(BTr) and the UCPB as administrator of the CIIF; any other cash
Coconut Levy Asset including amounts deposited in UCPB as

Administrator of the CHF;


(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 (S.2001); and

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

u
Audit and Reconveyance of Coconut Levy Assets

SE

4, Audit and Inventory of Coconut Levy Assets. Upon the effectivity of this

Act, the Presidential Comm

ion on Good Government (PCGG), created under Executive

Order No. | ($.1986), shall conduct a complete accour

ig 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 aud

the inventory of Coconut Levy Assets prepared and submitted
by the PCGG for the purpose of, among others, determining completeness of the
inventory, establishing the reasonableness of the asset valuation and tracing of the flow of
the coconut levy fund, The COA shall submit to the Coconut Farmers and 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 IIL

of Executive Order No, 323 (s

2001), from procuring a third-party appraisal of any of the
Pi

Coconut Levy Assets prior to or in the course of preparing the privatization or disposition

5


plans for the said assets.
SEC. 5. Reconveyance of Coconut Levy Assets. Immediately upon the effectivity

of this Act, the PCGG, the government representatives to the boards of

sequestered/surrendered corporations, and any government agency or person in

possession, custody, control or admin

stering any Coconut Levy Asset shall perform or
cause the performance of the following:
(a) reconyeyance of the title of such asset to the Republie of the Philippines;
(b) delivery of all stock certificates and other evidence of ownership to the BTr for
safekeeping: and
(©) deposit all cash assets in the Trust Fund.

Any provision of law to the contrary notwithstan

g, 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.
tit
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, herein referred
to as the "Trust Fund," which shall consist of the Trust Principal and the Trust Income. No
portion of the Trust Fund shall accrue to the general fund of the National Government. It
shall be capitalized, managed, utilized and accounted for in the manner provided in this
Act. Nothing in this Act shall be understood to prevent or prohibit any person, group or
entity from conveying to the Committee other properties and/or additional assets either for

the use of the coconut industry, or for purposes of privatization, in which case, the

proceeds of such privatization shall form part of the Trust Fund.


SI

7. Purpose of the Trust Fund. ~The Trust Fund shall be used exclusively
for the ultimate benefit of coconut farmers and farm workers as embodied in the Coconut

Farmers and Industry Development Plan prepared pursuant to Section 20 hereof,

XC, 8, Capitalization of the Trust Fund. All assets and/or properties derived
from all coco levy recovered assets; and all dividends, interest earnings and incomes that
are available upon the effectivity of this Act shall form part of the initial capital of the

Trust Fund, The Trust Fund shall thereafter be augmented with all proceeds of

privatization/disposition of the Coconut Levy Assets remitted dir

ly thereto by the PMO.

in accordance with this Act, including any and all forms of income,

nterests, earnings,

yields, or any monetary benefit derived therefrom prior to the privat

ation/disposition of
these Coconut Levy Assets.

In order to ensure the enduring character of the Trust Fund, the Principal thereof
shall be augmented by grants, donations and other lawful transfers by public or private
entities

SEC. 9. Management and Utilization of the Trust Fund and Trust Income. The
‘Trust Fund shall be available and may be utilized only for the purpose for which it was
created and upon authorization of the Committee, subject to the following conditions:

(a) The Trust Principal shall be preserved and maintained at all times

nd only the
‘Trust Income may be used: Provided, That an aggregate amount not
exceeding five percent (5%) of the initial Trust Principal may be used

during the first two y;

ars following the effectivity of this Act.
(b) The Trust Fund shall be disbursed only on the basis of the funding requirement
of the program, activity or project.

(©) The Trust Fund may also be disbursed to pay for the expenses of the

Committ

for the administration, monitoring, evaluation, information services,


and other necessary activities for the effective performance of its functions
under this Act; and

(d) No part of the Trust Fund shall be utilized to pay for the salary of PMO

personnel.

All releases from the Trust Fund approved by the Committee shall be released
directly to the implementing agencies: Provided, ‘That coconut productivity and
developmental programs and projects shall be implemented by the Philippine Coconut
Authority (PCA), created under Presidential Decree 232 ($.1973), as amended by

Presidential Decree No. 1468 (S,1978)..

SEC. 10. Designation of the Bureau of the 7 ry as Depository of the Trust
Fund. The Trust Fund shall be deposited in the Bureau of the Treasury (BTr). The shall
account for the Trust Fund in the manner provided by the Committee and shall perform
such duties as may be determined by the Committee.
Iv
Coconut Farmers and Industry Trust Fund Committee

SEC. 11. Creation of the Coconut Farmers and Industry Trust Fund Committee.
The Coconut Farmers 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:

(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;

(d) appoint a fund manag

if necessary, to handle the investment of the ‘Trust

Principal;


(e)

(h)

(i)

0)

0)

identify the Coconut Levy Assets that will be privatized, retained, or abolished

and submit its recommendation to the President;

approve the marketing and disposition program for the Coconut Levy Assets

approved for privatization;

authorize the sale and other mode of privatization of Coconut Levy Assets

approved for privatization;

authorize the rehabilitation of Coconut Levy Assets approved for privatization

pending actual disposition;

facilitate access by coconut farmers and their organizations from the most

poverty afflicted areas of the country to the services, programs and benefits
nplemented pursuant to the Coconut Farmer and industry Development Plan

For purposes of this Act, those already accredited farmers organizations need

not go through another accreditation process;

submit to the President reports and recommendations in connection with its

functions under this Act;

appoint, transfer, suspend, or remove for cause, personnel of the Committee,

and fix their remuneration in accordance with the Salary Standardization Law;

and

exercise such other incidental powers and functions as may be necessary to

attain the objectives of this Act.

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

(a)

Seven (7) representatives from the government who shall be serving in ex-

officio capacit

(1) Secretary of the Department of Agriculture (DA) as Chairperson;

(2) Secretary of the Department of Finance (DOR) as Vice-Chairperson;

(3) Secretary of the Department of Interior and Local Government (DILG);


(4) Secretary of the Department of Trade and Industry (DT1);
(5) Secretary of the National Anti-Poverty Commission (NAPC);
(6) Director-General of the National Economic Development Authority
(NEDA); and
(7) Administrator of the PCA
(b) Six (6) representatives from the coconut farmers’ organizations who have
considerable experience and reputable track records, allocated as follows:
(1) wo (2) representatives from Luzons
(2) two (2) representatives from Visayas; and
(3) wo (2) representatives from Mindanao

Witl

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 fi

mers? organizations shall

be validated and shortlisted by the PCA, in consultation with the NAPC. The list of
nominees shall be submitted to the President not later than sixty (60) days from the start of
the selection process.

The government representatives in the Committee shall serve only during their
respective terms in office, while the six (6) representatives from coconut farmers
organization shall each hold a term of one (1) year, unless sooner removed for cause. Any
of the representatives shall continue to hold office until the successor is appointed:

Provided, That any appointment to fill a vacancy in the Committee shall be only for the

unexpired term:

EC. 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.

10


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 Comn

we shall be required on matters
involving the following:
(a) any disbursement of funds involving more than Fifty million pesos
(PhPS0,000,000.00);
(b) any proposed investment involving more than One hundred million pesos
(PhP 100,000,000,00); and

(©) any disposition or privatization proposal involving more than Five hundred million

pesos (PhP500,000,000,00).

‘The Chairperson, if unavailable, may d

nate the Chairperson to convene the
Committee and preside over the Committee's meeting on behalf of the Chairperson.

SEC. 15. Obligations of the Members of the Committee. The members of the
Committee shall act with due care, diligence, skill, and good faith in all its dealings with
the Trust Fund and the Coconut Levy Assets. They shall avoid conflicts of interest and
declare before the Committee any interest they may have in any particular matter,

Where a member of the Committee receives any profit or benefit by virtue of the
office, including acquiring shares in corporations that form part of the Coconut Levy
Assets, using the Coconut Levy Assets for one’s benefit, receiving commission on
contracts from the Coconut Levy Assets, or taking advantage of corporate opportunities
involving the Coconut Levy Assets, all such profits or benefits shall be returned to the

Trust Fund, without prejudice to any administrative, civil or criminal action against such

member. This provision shall be applicable notwithstanding the fact that such member of

uw



the Committee used one’s own funds in the venture.

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

(a) administer the programs approved or promulgated by the Committee;

(b) direct and st

pervise officials, employees, representatives and agents fe

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;

(a) keep and maintain official records and reports of the proceedings of the
Committee;

(c) administer oaths in all matters falling within the jurisdiction of the
Committee; and

(f) exercise such other duties as may be vested by the Committee that are
consistent with the provisions of this Act.

The PCA shall provide Secretariat support to the Committee. .

SEC. 17. Cooperation with the Committee. The Committee may also call upon
any department, bureau, office, agency, and instrumentality of the government, including
government-owned and controlled corporations for any assistance it may need in the
discharge of its functions and responsibilities,

SEC. 18. Accounting and Auditing. The Committee shall maintain recor

Is and

accounts of

all investments, income, receipts, disbursements and other transactions

relating to the management, administration and disposition of the Trust Fund. Thes

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.

12


SEC. 19. Legal Counsel. The Secretary of Justice shall be the ex-officio counsel to
the Committee on legal matters

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 (DOE), the Department of Public Works
and Highways (DPWH), the DILG, the NAPC, the National Economic Development
Authority (NEDA), a representative from the farmers’ groups. The Administrator of the
PCA shall act as the Ad Hoe Committee's Chairperson.

The Ad-Hoc Committee, in consultation with the coconut farmers and

representatives of the coconut industry,

shall indicate in an integrated coconut industry
strategy map the policies for the development and rehabilitation of the coconut industry
and shall prepare a five (5) year 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.
In the formulation of the Plan, the Ad Hoc Committee shall be guided by the
following objectives:
1) A credit and investment fund for the increase in the income of coconut farmers
and inerease coconut productivity including intercropping and_livestock-

raisin,

2) A marketing fund for the promotion of coconut-based enterprises including

integrated proc

ing of coconut products and downstream products;

3) A development fund fe

the provision of timely and critical support to coconut

farmers organization and development;

13



4) A social fund for 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; and

5) A research and development fund to accelerate the implementation of value-
adding activities and full value recovery of the coconut industry.

‘The Plan shall provide an indicative funding requirement or allocation for the

implementation of any and all of the programs and projects to be funded by the ‘Trust

Income, which funding or allocation shall be itemized or broken down on a project-to-

project bi

Provided, That, (a) for projects which are recurring, or to be implemented on
a regular basis, the allocation shall indicate the annual fund that may be required to
implement the project; and (b) for projects that are to be implemented or concluded within
a period of time, the allocation shall indicate the total fund that may be required for the

implementation of the whole project, itemized according to the phases or stages of the

project.

Within sixty (60) days from the effectivity of this Act, the Plan shall be submitted

by the Ad Hoc Committee to the Coconut Farmers and Industry ‘Trust Fund Committee

who shall, in turn, submit the Plan to the President for approval. Immediately upon its
approval, the Plan shall be returned to the Committee for the disbursement of funds in
accordance with the provisions of this Act. Any amendment to the Plan shall require the
approval of the President,

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

be deemed approved.

14


VI

Privatization of the Coconut Levy Assets

C21. 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 funetions or purposes for which the entity was

sated are no longer relevant to

the State or no longer consistent with the national development policy of the Stat

(b) the functions oF purposes of the entity duplicate or unnecessarily overlap with

functions, programs, activities or projects already provided by another agency;

(c) the entity is not producing the desired outcomes, or is no longer achieving the
objectives for which it was originally designed and implemented;
(d) the entity is dormant or non-operational;
(©) the entity is involved in an activity which is best carried out by the private sector;
and
(D the function, purpose, or nature of operations of any group of entities requires
consolidation under a holding company
‘The Committee shall submit its recommendation to the President for approval. The
Committee shall also arrange for the transfer of the Coconut Levy Assets approved for
privatization to the PMO, unless the President, upon the recommendation of the

Committee, designates another agency to preserve such Coconut Levy A:

1s pending

privatization

ional Mandate of the Privatization and Management Office

(PMO). \n addition to its powers and functions under Executive Order No, 323 dated

15


December 6, 2000, the PMO is authorized to dispose the Coco Levy Assets that have been
approved for privatization,

In the dis

charge of its mandate, the PMO shall

(@) formulate and implement the marketing and disposition program after securing
prior approval of the Committee;

(6) take possession of and preserve such assets on behalf of the National Government;

(©) execute and deliver, on behalf of the National Government, deeds of sale,
Contracts, (rust instruments, and other legally operative documents as may be

heces:

'¥ OF appropriate to convey title to, take possession of, and conserve such
assets

(@) engage external expertise as may be necessary in the fulfillment ofits tasks under
this Act; and

(©) adopt internal rules and regulations.

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

SEC. 23. Powers of the Privatization and Management Office. The PMO is also
Empowered to enter into sales through public bidding, negotiated sale, lease, or any form
of divestment or transmission of rights over the Coconut Levy Assets, Providedk That no
Coconut Levy Asset shall revert to the previous owners or their nominees or be sold to

individuals who, as determined by final judgement of a court of law, have 1

managed or
diverted such assets

Prior (0 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 t0 enhance the viability, and therefore the disposabilty of the

16


corporations to potential buyers, including measures requiring personnel
retrenchment plans or other forms of corporate downsizing;

(b) iret

nyone or all of the subject corporations to submit to the PMO, within

fixed tim

-tables, such reports and information a:

the PMO may require in the

exercise of its functions under this Act; and

(©) cause the subject corporations to undergo merger, consolidation, spin-off, or

other corporate acts of reformatory nature as it may deem necessary or desirable to

expedite the disposition and privatization under this Act.
In all such cases, no corporate measure shall be implemented without the
approval of the Committee.
Nothing herein shall be construed as authorizing the Committee or the PMO to
rehabilitate or allow investments of any and all Coconut Levy Assets transferred to the

National Government.

SEC. 24. Committee to Determine Transfer Value. The Committee is hereby
vested with full and complete powers and prerogatives to determine transfer values and
related valuations at which the Coconut Levy Assets shall be transferred and conveyed to
the PMO pursuant to the mandate of this Act and upon reasonable consultation with a
third-party appraiser: Provided, That any valuation approved by the Committee for
Purposes of the transfer to the PMO shall not be deemed a condonation, waiver, ot

extinguishment of any obligation by any party whose vested rights may be impaired by

such transfer

SEC, 25. Remittance of Proceeds of Privatization. All proceeds or

pts from
the sale of Coconut Levy Assets shall be remitted to the Trust Fund.

Ske

26. Reporting Requirements, ‘The Committee shall, on a semi-annual basis,
submit to the President and to Congress a report on the status of disposition of the Coconut

Levy Assets, which shall include, among others, a description of the individual assets

a7


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.

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

Coconut Levy Assets that have been approved for retention shall be transferred to
such agency as may be designated by the President.

The Governance Commission on Government Owned or Controlled Corporations

Gt

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

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evidence of indebtedness to which full faith, credit and unconditional guarantee of
the Republic of the Philippines is pledged;

(b) Bonds, securities, promissory notes or other evidence of indebtedness of
government financial institutions or government corporations with acceptable
credit or guarantee: Provided, That such investments shall be subject to a ceiling to
be fixed by the Committee in the implementing rules and regulations; and

(©) Deposits and loans and/or investments in any domestic bank doing busin

in the

Philippines and in good standing with the Bangko Sentral ng Pilipinas: Provided,

That in case of such deposits, these shall not execed at any time the unimpaired

capital and surplus of total private deposits of the depository bank, whichever is

smaller; Provided, further, That the bank shall first have been designated as a

depository for this purpose by the Monetary Board of the Bangko Sentral ng

Pilipinas; Provided, finally, That such investments shall be subject to a ceiling to

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

vil
Final Provisions

SEC. 29. Suppletory on Applicability of Republic Act No. 10149 and Executive
Order 323. In the interpretation of the provisions of this Act, the provisions of Republic
Act No. 10149, otherwise known as the "GOCC Governance Act of 2011," and Executive
Order 323, entitled "Constituting an Inter-Agency Privatization Council (PC) and Creating
A Privatization and Management Office (PMO) Under The Department of Finance For
The Continuing Privatization of Government Assets and Corporations," except for
Sections 2 and 3 of Article IV of E, O. 323, shall apply suppletorily.

SI

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

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formulate and promulgate the rules and regulations for the proper implementation of t
Act.

SEC. 31. Congressional Oversight. The Congressional Oversight Committee on
Agricultural and Fisheries Modernization (COCAFM) shall exercise oversight functions

over the implementation of this Act.

SEC. 32. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected by such declaration shall remain in full
force and effect

SE

>. 33. Repealing Clause, All laws, executive and administrative orders, rules
and regulations inconsistent with this Act are hereby repealed or amended accordingly.

SEC. 34. Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,

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