" 
, 
" 
• 
!irnatf 
(I!lH,~.tl! tl\. """.b,U 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
.) 
'14 
FEB 18 P3 :46 
SENATE 
2126 
S.B. No. ____ _ 
Introduced by Senator Cynthia A. Villar 
AN ACT 
DECLARING THE COCONUT LEVY FUNDS AS PUBLIC FUNDS, 
AUTHORIZING THE PRIVITIZATION AND MANAGEMENT OFFICE TO DISPOSE 
THE COCONUT LEVY ASSETS, ESTABLISHING THE COCONUT FARMERS AND 
INDUSTRY FUND, PROVIDING FOR ITS MANAGEMENT AND UTILIZATION, AND 
FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The coconut industry has been at the forefront of debate and controversy for over three 
decades now. The situation stems from the "commanding presence of the industry in the rural 
sector and to its claim to large assets - the coconut levy fund. (Dyand Reyes, 2006). 
Much has been written about the c090nut industry. Observes such as Villegas and Esteban 
(1980), Habiro (1988), Intal (1988) Aragon (2000), and Romero (2005) have noted the various 
challenges facing the industry. 
These challenges inclUde: 
low productivity, limited 
intercropping, and in tum, high poverty. The causes include: 
a. Large areas are planted with low genetic potential 
b. Vast areas are not fertilized while actual labor inputs are only half of optimal 
c. One third of the coconut trees are senile; and 
d. Coconuts are planted on marginal lands. 
The coconut industry is a m~or agriculture industry. According to latest data, coconut lands 
comprise 1.4 million farms, or 29% of all farms .. Physical area of coconut lands totaled 3.32 
million hectares (34% of total), higher than rice at 2.5 million hectares and com at 1.4 million 
hectares. By island group, Luzon had 20%, Visayas 34% and Mindanao 46%. 
At some 40 nuts per hectare (750 kg copra/ha), coconut has the lowest farm value per hectare 
among crops. This is due to low yield, mono-cropping, and underutilization of lands under the 
coconuts. Returns to' coconut lands /lave not improved as produotivity diminished in recent 
years. Farm yields practically stagnated at about 750 kg copra per hectare. Gross return per 
hectare was barely only Phpl6, 000.00 or P32, 000 per farm per year. 
Poverty abounds in the 3.3 million hectare of coconut areas. 
Based on the Human 
Development Report, regions with disproportionately coconut areas tend to have high poverty 
incidence. This is certainly the case in Bicol with 40.5% of families in 2003, Eastern Visayas 
(33.5%), Zamboanga Peninsula (44.1%) and Caraga (47.3%). This is more evident at provincial 
levels. As there had been little changes in coconut farm productivity through yields and/or 
intercrops, success in poverty reduction appears limited, except in areas where there are 
alternative employment opportunities like Davao City and Laguna. 
/> 
I • 


, 
• 
• , 
Coconut farms are .reportedly present in 69 out of 79 provinces and coconut regions hosts 
among the largest number of rural poor. Resources flow to the industry is limited. Yet it has 
among the highest potential for growth through productivity enhancement, diversification, and 
industry value adding. If managed well, it can be instrumental jn rural industrialization and job 
creation. 
Global competitiveness is defined as the ability of a product to sustainably compete with 
exports in the global market or with imports in the local market. As most coconut products, are 
exported, the premier measure is cost cou:petitiveness. 
A sound strategy for competitiveness is coconut-based farming system comprising two 
elements: replanting with good clones; and market-based intercropping with other crops and lor 
livestock. Marginal lands with senile trees, if not suitable for intercrops because of distance 
from market and other constraints must be shifted to other use such as timber or fruit trees. 
Sustainable development has three aspects: economic, social and environmental (UNIDO, 
2002). On the first aspect, the low financial and economic returns to coconut farming and its 
concomitant high poverty have fueled urban migration. Altogether, antiquated, low-input 
coconut farming technology may not be sustainable. 
References: 
Aragon, Corazon. 2000. Coconut Program Area Research Planning and Prioritization. 
Discussion Paper 2000-31. Philippine Institute for Development Studies. Socio-
Economic Research Portal for the Philippines. 
Habito, Cielito F. 1988. The Coconut Industry in the Overall Economic Policy Environment. 
Paper presented at the Technical Consultative Meeting on the Coconut Industry. February 
19-20, 1988 at the Philippine Coconut Authority 
Romero, Jose Jr. 2005. Transforming the Coconut Industry: Institutional and Policy Reforms 
Toward Shared Development. Unpublished PhD Dissertation in political, economy. 
University of Asia and the Pacific. 
Villegas, Bernardo and Enrique Esteban. 1080. A Broad Policy Paper on the Philippines Coconut 
Industry. Submitted to the Philippine Coconut Research and Development Foundation. 
Center for Research and CQmmunication. October I:;>, 1980. 
UNIDO. 2002. Corporate Social Responsibility. World Bank. 1987. Philippine Agricultural 
Sector Strategy Review. Volume I, Report No. 6819PH June 25, 1987. 
Dy, Rolando and Senen Reyes. The Philippine Coconut Industry, Performance, Issues, and 
Recommendations. EPRA, 2006.' 
• 
• 


, 
, 
SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
'14 
FEB 18 P3 :46 
SENATE 
2126 
S.B.No. __ _ 
Introdnced by Senator Cynthia A. Villar 
AN AGf 
DECLARING THE COCONUT LEVY FUNDS AS PUBLIC FUNDS, 
AUTHORIZING THE PRIVATIZATION AND MANAGEMENT OFFICE TO 
DISPOSE THE COCONUT LEVY ASSETS, ESTABLISHING THE COCONUT 
FARMERS AND INDUSTRY FUND, PROVIDING FOR ITS MANAGEMENT AND 
UTILIZATION, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House' of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Short Title.-This Act shall be known as the "Coconut Farmers and 
2 
Industry Development Act of2012". 
3 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
4 
consolidate the benefits due to coconut farmers, especially the poor and marginalized, under 
5 
various statutes and to expedite the delivery thereof in order to attain a balanced, equitable, 
6 
integrated and sustainable growth and development of the coconut industry. 
7 
I, 
8 
Definition of Terms 
9 
SEC. 3. Definition of Terms, -
The following terms shall mean: 
10 
(a) "CIIF" shall refer to the Cqconut Industry Investment Fund created by virtue of' 
11 
Presidential Decree 1468; 
12 
(b) "CIIF - Oil Mills Group" shall refer to the CUF companies, namely, Southern 
13 
Luzon Coconut Oil Mills; Cagayan de Oro Oil Co. Inc.; Iligan Coconut Industries, Inc.; 
14 
San Pablo Manufacturing Corp.; Granexport Manufacturing Corp.; and Legaspi Oil Co, 
15 
Inc.; 
. ' 
• 


1 
(c) "CIIF Holding Companies" shall refer to the fourteen (14) holding companies; 
2 
namely: 
3 
i. Anglo Ventures Corporation 
4 
ii. ASC Investors, Inc. 
5 
iii. ARC Investors, Inc. 
• 
6 
iv. AP Holdings, Inc. 
7 
v. Fernandez Holdings, Inc. 
8 
vi. First Meridian Development, Inc. 
9 
vii. Randy Allied Ventures, Inc. 
10 
viii. Rock Steel Resources, Inc. 
11 
ix. Roxas Shares, Inc. 
12 
x. San Miguel Officers Corp., Inc. 
13 
xi. Soriano Shares, Inc. 
14 
xii. Te Deum Resources, Inc. 
15 
xiii. Toda Holdings, Inc. 
16 
xiv. Valhalla Properties Limited, Inc. 
• 
17 
(d) "CIIF SMC Block Shares" shall refer to the 753,848,312 preferred shares in San 
18 
Miguel Corporation (SMC), representing 24% of the total outstanding capital stock of 
19 
SMC; 
20 
(e) "Coconut Levy Assets" shall refer to any and all kinds of property, whether real or 
21 
personal, tangible or intangible, wherever situated, which have been acquired through 
22 
the Coconut Levy Funds as defined in this Section, as well as the fruits, or income 
23 
therefrom, including those acquired in exchange or substitution thereof. 
24 
This shall include, among others, the following: 
25 
i. The 72.2% shares ofUCPB's outstanding capital stock; 
• 
26 
ii. The CIIF - Oil Mills Group; 
27 
iii. The CIIF Holding Companies; and 
28 
iv. The CIIF Block Shares; 
2 


1 
(f) "Coconut Levy Funds" shall refer to various funds generated from levies, taxes, 
2 
charges, and other fees exacted or imposed pursuant to or in connection with the sale of 
3 
copra rececada or its equivalent in other coconut products, and collected for the most 
4 
part from coconut farmers, planters, millers, refiners, processors, exporters, desiccators 
5 
and other end-users of copra rececada or its equivalent in other coconut products . 
• 
6 
Specifically, the term shall refer to any or all ofthe following: 
7 
i. The Coconut Investment Fund created under Republic Act No. 6260; 
8 
ii. The Coconut Consumers Stabilization Fund created under Presidential Decree No. 
9 
276; 
10 
iii. The Coconut Industry Development Fund created under Presidential Decree 
11 
No.582; 
12 
iv. The Coconut Industry Stabilization Fund created under Presidential Decree No. 
13 
1841; and 
14 
v. The Coconut Industry Investment Fund created under Presidential Decree No. 
15 
1468; 
16 
(g) "Coconut Farmers and Industry Developmept Plan" or "Plan" shall refer to the 
17 
plan to be prepared for the development and rehabilitation of the coconut industry; 
18 
(h) "Committee" shall refer to the Coconut Farmers and Industry Fund Committee 
19 
created under Section 11 of this Act; 
20 
(i) "GOP" shall mean the Government of the Philippines;-
21 
G) "Investment Guidelines" shall refer to the investment management guidelines, 
22 
rules, procedures, and policies to be formulated by the Committee, and as may be 
23 
amended from time to time, which shall provide the parameters for investments of the 
24 
Trust Income or any portion thereof, and shall include, among others, asset allocation, 
• 
25 
criteria for selection of fund managers, and required income from the fund, and other 
26 
investment management threshold requirements; 
27 
(k) "PMO" shall refer to the Privatization and Management Office organized under 
28 
Article III of Executive Order No. 323 (S. 2001); 
3 


1 
(I) "PCA" shan refer to the Philippine Coconut Authority, created under Presidential 
2 
Decree 232 (S. 1973) as amended by Presidential Decree 1468 (S. 1978); 
• 
3 
(m) "PCGG" shan refer to the Presidential Commission on Good Government, created 
., 
4 
under Executive Order No.1 (S. 1986); 
5 
(n) "President" shall refer to the President of the Republic of the Philippines; 
6 
(0) "Prohibited Investments" shall refer to any of the following: direct investments into 
7 
companies, private placements and direct lending, derivatives (options, warrants), 
8 
margin purchases, short sales, and investments in real estate; 
9 
(P) "Trust Fund" shall refer to the Coconut Farmers and Industry Fund created under 
10 
Section 6 of this Act; 
11 
(q) "Trust Income" shan refer to the income, interest earnings, and other monetary 
12 
benefits, realized by and accruing from the Trust Fund or any portion thereof; and 
13 
(r) "Trust Principal" shan refer to (i) the proceeds from the sale or redemption 'of the 
14 
CIIF SMC Block Shares, (ii) any and all proceeds of privatization of the Coconut Levy 
15 
Assets remitted thereto by the Privatization and Management Office, as provided under 
16 
Section 8 of this Act, and (iii) proceeds of privatization of any or an properties or assets 
17 
conveyed by any person, group or entity to the Committee, fmm time to time; as 
18 
provided in Section 8 hereof. 
19 
II 
20 
Declaration as Public Funds and Audit of Coconut Levy Assets 
21 
SEC. 4. Declaration of Coconut Levy Funds as Public Funds. -
An Coconut Levy 
22 
Funds and any and an proceeds of privatization/disposition of the Coconut Levy Assets are 
• 
23 
hereby declared as public funds to be used, managed, disbursed, or otherwise disposed of 
24 
only in accordance with this Act. 
25 
SEC. 5. Audit and Inventory of Coconut Levy Assets. -
Upon the effectivity of this Act, 
26 
the Commission on Audit (COA), in coordination with the PCA and the PCGG, shall 
27 
conduct a complete accounting and inventory of the Coconut Levy Assets. The audit shall 
28 
determine and ascertain the amount, value, description and nat';lre of such funds, properties, 
4 


.' . 
1 
assets, records, choses in action, and other rights, claims, or causes of action pertaining 
2 
thereto. Likewise, the COA shall conduct an audit of all investments, disbursements or 
• 
3 
expenditures arising from Coconut Levy Funds. 
4 
Within one hundred twenty (120) days from the effectivity of this Act, the COA shall 
5 
submit to the Committee its audit report, together with a complete list of Coconut Levy 
6 
Assets and their valuation, together with the empirical basis and' the methodologies 
7 
employed for the said valuation. 
8 
The Committee shall, within fifteen (15) days from its receipt of the audit report, publish 
9 
the same in at least two (2) newspapers of national circulation. 
10 
Nothing herein shall be construed as preventing the PMO from procuring a third-party 
11 
appraisal of any of the Coconut Levy Assets prior to or in the course of preparing the 
• 
12 
privatization or disposition plans for the said assets. 
13 
III 
14 
Creation of the Coconut Farmers and Industry Fund, its Purposes, and Utilization 
15 
SEC. 
6. Creation of the Coconut Farmers and Industry Fund-There is hereby 
16 
created an irrevocable trust fund to be known as the Coconut Farmers and Industry Fund, 
17 
hereinafter referred to as the "Trust Fund," which shall be capit~lized, managed, utilized and 
18 
accounted for in the manner provided by this Act. 
19 
The Trust Fund shall be perpetually maintained and the Trust Principal shall be 
20 
preserved to ensure the full implementation and realization of the objectives identified and 
21 
ought to be attained under this Act. 
22 
SEC. 7. Purpose of the Trust Fund. -Tile Trust Fund shall be established for the 
23 
development of the coconut industry for the ultimate benefit of coconut farmers and farm 
24 
workers. It shall be used to frmd the implementation of programs and projects identified in 
25 
the Plan, described under Section 16 of this Act. 
26 
SEC. 8. Capitalization of the Trust Fund -
Any and all monies deposited with the 
27 
United Coconut Planters Bank under the name of the CIIF pursuant to the provisions of 
28 
Presidential Decree No. 1468, as amended, and any and all proceeds for the redemption or 
5 
• 


• 
., 
1 
sale of the CIIF SMC Block Shares and all dividends accruing or have accrued thereto shall 
2 
fonn part of the initial capital of the Trust Fund. The Trust Fund shall thereafter be 
3 
augmented with all proceeds of privatization/disposition of the Coconut Levy Assets 
4 
remitted thereto by the PMO in accordance with this Act, including any and all fonns of 
5 
income, interests, earnings, yields, or any monetary benefit which accrues to the Trust Fund 
6 
pursuant to the investments made pursuant to Section 11 of this Act. 
7 
Nothing in this Act shall be understood to prevent or prohibit any person, group or 
8 
entity from conveying to the Committee other properties and/or additional assets either for 
9 
the use of the coconut industry, or for purposes of privatization, in which case, the proceeds 
10 
of such privatization shall fonn part of the Trust Fund. 
11 
SEC. 9. Management and Utilization o/the "Trust Fund and Trust Income. - The Trust 
12 
Fund shall be managed, allocated, used and disbursed only as provided and in accordance 
13 
with this Act. The Trust Principal shall be preserved and maintained at all times and, for 
14 
this purpose, shall be invested in Republic of the Philippines bonds. Ol,1ly the Trust Income 
15 
may be used for the implementation of the Plan or for any or all purposes allowed under this 
16 
Act. 
17 
A portion of the Trust Income shall be eannarked by the Committee for long-tenn 
18 
investments, provided such investment shall only be made 'in global fixed income securities 
19 
and highly liquid diversified equity-indexed funds with a view towards ensuring capital 
• 
, 
20 
preservation, protection of principal and receiving inflation adjusted returns to meet the 
21 
minimum required by the Committee. In no case shall the Trust Income or any portion 
22 
thereof be invested in Prohibited Investments.' 
23 
For purposes of the initial implementation of the Plan and its programs and projects, 
24 
and to fund the allowable expenses under Sections 16 and 22 of this Act pending the accmal 
25 
of or availability of the Trust Income; the Committee is herebyauthorizea to use a portion of 
26 
the Trust Principal which shall in no case exceed ten percent (l 0%) of the amount 
27 
constituting the initial capital of the Trust Fund as provided under Section 8 hereof. Other 
28 
than as otherwise provided in this Section, only the Trust Income shall be used by the 
6 
• 


• 
1 
Committee for the purposes allowed under this Act, including any and all amount required 
2 
or allocated for the implementation of the Plan. Allocation and utilization of the Trust 
3 
Income by the Committee shall be based solely on the funding requirements established or 
4 
provided under the Plan. 
5 
SEC. 10. Designation o/Trustee Bank/s. -
Any law to the contrary notwithstanding, 
6 
the Committee shall designate the reputable depository bank/s, which shall (i) manage, 
7 
utilize and account for the Trust Fund in the manner and within the parameters set forth by 
8 
the Committee, and (ii) exercise the tasks, functions and duties determined and established 
• 
., 
9 
by the Committee. For the avoidance of doubt, the Committee shall not be limited to 
10 
govermnent depository banks but may designate private depository bank/s provided that said 
11 
private bank/s are domestic banks whose long terin local currency rating is at least that of a 
12 
GOP. 
13 
IV 
, 
14 
The Coconut Farmers and Industry Fund Committee 
15 
SEC. 11. Creation o/the Coconut Farmers and Industry Fund Committee.-There is 
16 
hereby created the Coconut Farmers and Industry Fund Committee which shall be attached 
17 
to the Office ofthe President. 
18 
The Committee shall have the following powers and functions: 
19 
(1) Implement the Coconut Farmers and Industry Development Plan for the 
20 
development of the coconut industry and the coconut farmers; 
21 
(2) Identify the.Coconut Levy Assets for disposition and arrange for the transfer to the 
22 
National Govermnent and/or to the Privatization and Management Office for 
23 
privatization or disposition; 
24 
(3) Formulate and amend from time to time the Investment Guidelines: Provided, 
25 
That, no funds shall be invested in, Prohibited Investments. 
26 
(4) Designate the depository bank/s that will receive, hold, and administer the Trust 
27 
Fund, or any portion thereof; 
• 
7 


1 
(5) Make, approve, or disapprove, any and all disbursements or expenditures of the 
2 
Trust Income or any portion thereof in accordance with this Act; 
3 
(6) Appoint and procure fund managers in such numb~r as it deems necessary to 
4 
manage the investments of the Trust Fund; 
5 
(7) Establish mandatory as well as indicative guidelines for the conservation, 
6 
rehabilitation, and disposition of the Coconut Levy Assets by the PMO; 
7 
(8) Approve or disapprove, subject to the availability of funds for such purpose, the 
8 
rehabilitation of Coconut Levy Assets pending their disposition by the PMO with the 
9 
approval of the Committee: Provided, That the budget for each rehabilitation project 
10 
shall likewise be approved by the Committee; 
11 
(9) Approve, or disapprove, on behalf of the National Government and without need of 
12 
any further approval by, or other action from any other govemment institution or 
13 
agency, the sale or disposition of the Coconut Levy Assets identified for disposition or 
14 
privatization, in each case on terms and to purchasers recommended by the PMO: 
15 
Provided, That neither the Committee itself, nor any of its members, shall undertake the 
16 
marketing of any such assets, participate in the negotiation for their sale, or make the 
• 
17 
sale itself, nor yet bring about any situation which may give rise to a conflict of interest; 
18 
(10) Exercise on behalf of the National Government all rights and incidents of 
19 
ownership with respect to such assets, ipcluding'the right to vote, whether directly or 
20 
through duly authorized nominees, shares of stock held in the name of the National 
21 
Government; 
22 
(11) Approve and revise, from time to time, the financial requirements of the PMO in 
23 
relation to its functions set forth in this Act, including its ~ual budget for operations, 
24 
conservation, management and disposition of the Coconut Levy Assets transferred and 
25 
entrusted under its care; 
26 
(12) Appoint, transfer, remove, and fix the remuneration of, personnel of the 
27 
Committee; and 
• 
8 


1 
(13) Exercise such other incidental powers and functions as may be necessary to attain 
2 
the objectives of this Act. 
3 
SEC. 12. Composition. - The Committee shall be composed of the Director-General of 
4 
the National Economic and Development Authority as Chairman, the Secretary of Finance 
5 
as Vice-Chairman, with the following as members: the Secretary of Justice, Secretary of 
• 
6 
Agriculture, the Secretary of the Governance Commission for GOCCs, Administrator of the 
7 
Philippine Coconut Authority, Chairman of PCGG, the National Treasurer, two (2) 
8 
representatives from the private sector who, shall have extensive experience and proven 
9 
expertise in finance, banking and trust management, and six (6) representatives of duly 
10 
accredited coconut farmers' organizations: Provided, That, the Chairman of PCGG and the 
11 
National Treasurer shaH be non-voting members. 
12 
The six (6) representatives from the coconut farmers' organizations shall be appointed 
13 
by the President from the list of nominees submitted jointly by the PCA and the National 
14 
Anti-Poverty Commission (NAP C), which nominees shall be chosen from private 
15 
organizations of coconut farmers, determined and accredited by the PCA under the criteria 
16 'of having the largest membership of coconut farmers, pursuant to an accreditation process to 
. 
' 
17 
be implemented by PCA under Section 24 of this Act. 
18 
The two (2) representatives from the private sector shall be appointed by the 
19 
President upon recommendation of the Secretary of the Department of Finance, who shall 
20 
each serve for a term of one (1) year. 
21 
The representatives from the coconut farmers organizations shall serve for a term of 
22 
three years. Of those first appointed, two (2) representatives shall serve for three (3) years, 
23 
two (2) representatives shall serve for two (2) years, and the other two (2) representatives 
24 
shaH serve for one (1) year. 
25 
Any appointment to fill the vacancy in the' Committee arising from the, remo\;;:u, 
• 
26 
retirement or resignation shall be made only for the unexpired term. 
9 


1 
SEC 13. Executive Director oj the Committee. - The President, upon recommendation 
2 
of the Committee, shall appoint an Executive Director who shall have the following powers 
3 
and functions: 
4 
a) 
Execute, administer and implement the plans and programs approved or promulgated by 
5 
the Committee; 
• 
6 
b) Submit for the consideration of the Committee such plans and programs deemed 
7 
necessary to carry out the provisions and purposes of this Act; 
8 
c) Direct and supervise officials, employees, representatives and agents for the 
9 
Committee; 
10 
d) Prepare an annual report on the activities of the Committee at the close of each fiscal 
11 
year and to submit a copy thereofto the President and Congress; 
12 
e) Keep and maintain official records and reports of the proceedings of the Committee, 
13 
f) 
Administer oaths in all matters falling within the jurisdiction of the Committee; and 
• 
14 
g) Exercise such other duties as may be vested by the Committee that are consistent with 
15 
the provisions of this Act. 
16 
SEC. 14. Meetings. The Committee shall meet as frequently as may be necessary and 
17 
expedient to discharge its responsibilities: Provided, That it shall meet at least once a month. 
18 
The presence of at least a majority of the members of the Committee shall constitute a 
19 
quorum, and the concurrence of a m~jority of the members present at a ,meeting at which a . 
20 
quorum exists shall be adequate for any decision by the Committee: Provided, That, where 
21 
the matter involves the approval of (i) any disposition or privatization proposal involving 
22 
more than Five Hundred Million Pesos (Php500,000,000.00), (ii) any proposed investment 
23 
involving more than One Hundred Million Pesos (PhpIOO,OOO,OOO.OO), and (iii) the 
24 
utilization of the Trust Income in amounts exceeding One Hundred Million' Pesos 
. . 
25 
(Php 100,000,000.00), the approval of at least a majority of all voting members of the 
26 
Committee shall be required. 
27 
SEC. 15. Legal Counsel.-The Secretary of Justice shall be the ex officio adviser to the 
28 
Committee on legal matters. 
10 


1 
SEC. 16. Funding.- For the initial year, the amount of thirty million pesos (Php 
2 
30,000,000.00), to cover expenses of the Committee in connection with the discharge of its 
• 
3 
responsibilities under this Act, is hereby authorized to be charged against the initial capital 
4 
of the Trust Fund in accordance with Section 9 of this Act. Subsequent annual expenses of 
5 
the Committee shall be charged against the Trust Income: Provided, That not more than 
6 
three percent (3%) of the Trust Income shall be used for administrative expenses. 
7 
V 
8 
Coconut Farmers and Industry Development .Plan, 
9 
SEC. 17. Preparation o/the Coconut Farmers and Industry Development Plan .-The 
10 
heads of the Department of Agriculture, National Economic and Development Authority, 
11 
Department of Agrarian Reform, Department of Trade and Industry, Department of Science 
12 
and Technology, Department of Energy, Department of Public Works and Highways, 
13 
Department of the Interior and Local Government, National Anti-Poverty Commission, 
• 
14 
Presidential Commission on Good Government, are herein constituted as an ad-hoc 
15 
committee with the Director-General of the National Economic and Development Authority 
16 
as Chairman. The ad-hoc committee, in consultation with representatives of the coconut 
17 
industry, including accredited coconut farmers' organizations, shall jointly prepare a 
18 
rationalization and development plan for the coconut industry which shall be known as the 
19 
"Coconut Farmers and Industry Development Plan. The Plan shall include, among others, a 
20 
national program for coconut productivity, replanting, rehabilitation, scientific and medical 
21 
research, integrated downstream processing, and market promotion, as well as local 
22 
programs that directly benefit small coconut farmers and farm workers, such as but not 
• 
23 
limited to medical andlor health and life insurance services, educational scholarships for 
24 
deserving students coming from families of coconut farmers, or beneficiaries of the Coconut 
25 
Levy Funds: Provided, however, that said programs shall not include farm-to-market road 
26 
projects, fertilization and direct lending. 
27 
In the formulation of the Plan, the Committee shall be guided by the following 
28 
objectives: 
11 


1 
a) poverty alleviation and social equity; 
2 
b) sustainable and increased productivity of small coconut farmers; 
• 
3 
c) full-scale rehabilitation of the coconut industry and promotion of coconut-based farm 
4 
systems; 
5 
d) modernization of the coconut industry towards global competitiveness; and 
6 
e) protection of small coconut farmers and farm workers from unfair competition. 
7 
The Plan shall set the directions and policies for the rehabilitation and development of 
8 
the coconut industry, including the identification of Coconut Levy Assets that need to be 
9 
retained by the National Government in order to support said rehabilitation and 
10 
development. 
11 
The Plan shall provide an indicative funding requirement or allocation for the 
12 
implementation of any and all of the programs and projects included therein, which funding 
13 
or allocation shall be itemized or broken down on a project-to-project basis: Provided, That, 
14 
(i) for projects which are recurring, or to be implemented on a regular basis, the allocation 
15 
shall indicate the annual fund that may be required to implement said project; and (ii) for 
16 
projects that are to be implemented or concluded within a period of time, the allocation shall . 
17 
indicate the total fund that may be required for the implementation of the whole project, 
18 
itemized according to the phases or stages of said project. 
19 
The Plan shall be submitted to the President for approval, subject to Section 28 of this 
20 
Act. Immediately upon the approval of the President, the same shall be submitted to the 
21 
Committee for implementation of the disbursements from the Trust Income, or to the .extent 
22 
allowed under Section 9, from the Trust Principal, of the amount required for the 
23 
implementation of the Plan. 
24 
Any and all amendments to the Plan shall be with the prior approval of the President. 
25 
VI 
26 
Privatization of the Coconut Levy Assets 
27 
SEC. 18. Privatization o/the Coconut Levy Assets. -
The Committee shall determine 
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the Coconut Levy Assets, identified by the COA pursuant to Section 5, which need to be 
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privatized and which should be retained by the National Government to support the coconut 
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farmers and the development of the coconut industry. All Coconut Levy Assets identified 
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by the Committee for privatization shall be transferred to the Privatization and Management 
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Office according to Section 19 hereof. Coconut Levy Assets identified by the Committee 
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for retention and use of the National Government shall be transferred to the appropriate 
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govemment agency that will use, manage or otherwise take custody of the said assets. 
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SEC. 19. Additional Mandate o/the Privatization and Management Office (PMO).-In 
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addition to its powers, duties and functions under Executive Order No. 323 dated December 
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6, 2000, the PMO, shall, for and in behalf of the National Government, take title to and 
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possession of, conserve, provisionally manage, and dispose of the Coco Levy Assets which 
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have been identified for privatization and disposition. 
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In the discharge of its mandate, the PMO is hereby empowered to implement the 
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marketing and disposition program of the Coco Levy Assets; to execute and deliver, on 
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behalf of the National Government, deeds of sale, contracts, trust in~truments, and other 
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legally operative documents as may be necessary or appropriate to convey title to, take 
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possession of, and conserve, such assets; to engage external expertise as may be necessary in 
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the fulfillment of its tasks under this Act; to adopt internal rules and regulations in relation 
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to the marketing and disposition of the Coconut Levy Assets; and to submit periodic reports 
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to the Committee on the status of the disposition program. 
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Any and all sales and other modes of privatization or disposition shall not be considered 
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final unless and until approved by the Committee. 
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SEC. 20. Powers o/the Privatization and Management Office.-The PMO is hereby 
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accorded discretionary powers with regard to the preparation of the privatization plans and 
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policies of the Coconut Levy Assets transferred to it. The PMO is empowered to enter into 
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sales through public bidding, negotiated sale, lease, or any form' of divestment or 
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transmission of rights over the Coconut Levy Assets, including a partnership with the 
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private sector in the management or operation of these Coconut Levy Assets prior to actual 
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sale or disposition. 
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In case of corporations transferred to the PMO, pursuant to the implementation of the 
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privatization program for the Coconut Levy Assets, the PMO is empowered to dissolve, 
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consolidate, or merge said corporations, subject to the provisions of Section 31 of Republic 
4 
Act 10149. 
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Prior to the implementation of any privatization plan, the PMO shall have the following 
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powers: 
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(i) require anyone or more of the subject corporations to adopt and implement cost-
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reduction measures to enhance the viability, and therefore the disposability of such 
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corporations, to potential buyers, including measures requiring personnel retrenchment 
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plans or other forms of corporate downsizing; 
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(ii) direct anyone or all of the subject corporations to submit to the PMO, within fixed 
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time-tables, such reports and information as the PMO may require in the exercise of its 
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ownership, administrative, and disposition over such corporations or their assets; and 
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(iii) cause the subject corporatIons to undergo rehabilitation, me~ger, consolidation, 
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spin-off, or other corporate acts of reformatory nature as it may deem necessary or 
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desirable to expedite the disposition and privatization under this Act. 
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In all such cases, no corporate measure shall be implemented without the approval of 
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the Committee. 
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SEC. 21. Committee to Determine Transfel' Value.-The Committee is hereby vested 
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with full and complete powers and prerogatives to determine transfer values and related 
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valuations at which the Coconut Levy Assets shall be transferred and conveyed to the PMO 
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pursuant to the mandate of this Act and upon reasonable consultation with the COA or a 
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third-party appraiser: Provided, That any valuation approved by the Committee for purposes 
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of the transfer to the PMO shall not be deemed a condonation, waiver, or extinguishment of 
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any obligation by any third party whos,? vested rights may be impaired by such transfer. 
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SEC. 22. Reimbursement and Retention.-In order to fulfill its additional mandate 
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under this Act, the PMO shall be reimbursed for actual reasonable expenses incurred in the 
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management and disposition of the Coconut Levy Assets. Likewise, it shall be allowed to 
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retain commissions, due diligence fees and proceeds from the sale of assets according to 
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asset bidding rules, information memoranda and similar documents, as well as a portion or 
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percentage of proceeds from disposition efforts, all not to exc~ed ten percent (10%), to be 
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approved by the Committee. Such amount shall be utilized for the payment of fees and 
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reimbursable expenses and of the costs and expenses incurred by the PMO in the 
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performance of its responsibilities under this Act. 
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SEC. 23. Remittance of Proceeds of Privatization.-All proceeds or receipts from the 
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sale of Coconut Levy Assets, except portions thereof for reimbursable custodianship and 
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operational expenses, or such amount approved by the Committee to be retained by the 
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PMO under Section 21, shall be remitted to the Trust Fund. 
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SEC. 24. Reporting Requirements.-The Committee shall, on a semi-annual basis, 
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submit to the President and to Congress a report on the status of disposition ofthe Coconut 
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Levy Assets, which shall include, among others, a description of the individual assets 
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disposed of, their purchasers thereof, .the consideration received therefor, and the agreed 
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terms of payment. 
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The PMO shall, within three (3) months following the closure of books at the end of 
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each fiscal year, submit a comprehensive annual report duly approved or endorsed by the 
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Committee, to the President and Congress on the status of its privatization efforts and its 
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disposition program for the Coconut Levy As~ets, which shall include the items described in 
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the immediately preceding paragraph. 
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VII 
22 
Miscellaneous 
. 
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SEC. 25. Accreditation of Coconut Farmers. -Within thirty (30) days following the 
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date of effectivity of this Act, the PCA, in coordination with NAPC, shall formulate and 
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implement an accreditation program for coconut farmers' organizations in order to 
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determine the legitimate coconut farmers' organizations from which nominees may be 
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drawn for purposes of comprising the requisite seats in the COl:nmittee pursuant to Section 
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12 of this Act. The PCA shall, after determining the six (6) coconut farmers organizations 
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having the largest membership of coconut farmers in accordance with this accreditation 
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process, shall submit to the President the list of nominees to be appointed as coconut 
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farmers' representatives in the Committee. 
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SEC. 26. Applicability of Republic Act No. 10149 and Executive Order 323. - In case 
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of doubt in the interpretation of the provisions of this Act, the provisions of Republic Act 
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No. 10149 otherwise known as the "GOCC Governance Act of2011" and Executive Order 
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323 or "Constituting an Inter-Agency Privatization Council (PC) and Creating A 
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Privatization and Management Office (PMO) Under The Department of Finance For The 
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Continuing Privatization of Govemment Assets and Corporations" shall apply suppletorily. 
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SEC. 27. Implementing Rules and Regulations. - Within ninety (90) days from the date 
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of effectivity of this Act, the Committee, in consultation with the PMO,' shall formulate the 
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rules and regulations for the proper implementation of this Act. 
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SEC. 28. Congressional Oversight. - The Congressional Oversight Committee on 
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Agricultural and Fisheries Modernization (COCAFM) shall exercise oversight on the 
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implementation of this Act. The COCAFM shall have the following functions: 
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a) 
Monitor and ensure the proper implementati~n of this Act; 
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b) 
Assess and endorse the draft Coconut Farmers and Industry Development Plan for the 
18 
President's approval and ensure its proper implementation; 
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c) 
Monitor and review the performance of the Committee and the PMO; and 
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d) 
Perform such other functions as may be necessary. 
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SEC. 29. Separability Clause.- If any provision of this Act is declared invalid or 
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unconstitutional, the other provisions not affected by such declaration shall remain in full 
23 
force and effect. 
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SEC. 30. Repealing Clause. - All laws, executive and administrative order, rules and 
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regulations inconsistent with the foregoing provisions are hereby amended accordingly. 
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Executive Order No. 277, s. of 1995, Executive Order No. 481, s. of 1998, Executive Order 
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No. 482, s. of 1998 and Executive Order No. 313, s. 0[2000 are hereby repealed. 
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SEC. 31. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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complete publication in the Official Gazette or in two (2) newspapers of general circulation. 
Approved, 
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