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Republic of the Philippines (> REcEWvED >
HOUSE OF REPRESENTATIVES © 4 ¢ OCT 2016
Quezon City, Metro Manila t/a ay

SEVENTEENTH CONGRESS
First Regular Session

House Biitlwo, 4224

Introduced by: REPRESENTATIVE CELSO L. LOBREGAT

EXPLANATORY NOTE

The Supreme Court ruled in COCOFED, et.al., vs. Republic of
the Philippines, GR # 177857-58 that coco levy funds and assets,
which consist primarily of the 753,848,312 SMC shares and their
accumulated dividends, are owned by the government in trust for the
coconut farmers. It also ruled that said coco levy funds and a:
to be used exclusively for the benefit of all the coconut farme
the development of the coconut industry. The funds are therefore
public trust funds- with government as trustee for the beneficial
owners who are the coconut farmers.

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

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

Hence, there is a great need to constitute the coconut levy funds
and assets into a Coconut Industry Trust Fund and provide the
administrative structure that will manage the trust funds and ensure
that its use will benefit the coconut industry and the coconut farmers.
‘That structure is proposed to be a Foundation which will be called the
Philippine Coconut Farmers Foundation.



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

In view of the foregoing, approval of this bill is earnestly sought.

CA a
CELSO L. LOBREGAT
Representative

Zamboanga City, 1 District


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

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4224

Introduced by: REPRESENTATIVE CELSO L. LOBREGAT

AN ACT
CREATING THE COCONUT INDUSTRY TRUST FUND ACT
PROVIDING FOR ITS MANAGEMENT AND FOR OTHER PURPOSES

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

ARTICLE I

See 1. Title.- This Act shall be known as the “Coconut Industry
‘Trust Fund Act.”

Sec. 2. Declaration of Policy- It is hereby declared to be the
national policy to accelerate the development and vertical integration of
the coconut industry, through the provision of adequate medium and
long-term financing for capital investment in the industry, social
services for the coconut farmers and assistance for the coconut farmer
organizations by instituting a Coconut Industry Trust Fund capitalized
with the coconut levy funds and assets and administered by a
Philippine Coconut Farmers Foundation (PCFF)..

Sec.3. Objectives- Pursuant to the above mentioned policy, this
Act has the following objectives:

a} Promote the steady, accelerated and orderly development
and vertical integration of the coconut indust

b} Develop and establish coconut based farming systems
including but not limited to the establishment of model
coconut farms;

c) Hasten and advance industrialization in the coconut
industry and the diversification and proper utilization of
coconut products and by-products;

d) Promote the effective utilization and marketing of coconut
products and by-products in the domestic and foreign
markets and preserve the competitiveness and _ reliability

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of the country as a major producer and supplier of said
products;

c} To increase production by expanding the planting and
replanting program of coconut trees in strategic areas
identified as having the most potential;

{| Conduct scientific researches and investigations in all

areas pertaining (o agricultural, industrial, marketing and
io-economic aspect of the coconut industry and
encourage the participation of small farm holders in
research and technology;

8) Encourage and promote the organization of coconut
farmers cooperatives, associations, and organizations and
provide them grants, credit and financing schemes; and

h) Generate and disseminate information and
communication to farmers, producers and other sectors to
ensure the appreciation and adoption of appropriate
technology and practices, inventions, as well as the
proper awareness and correct understanding of issues
and development in the coconut industry.

ARTICLE IT

Sec 1. Creation of the “Coconut Industry Trust
Fund”.- There is hereby created a trust fund to be known as the
Coconut Industry Trust Fund (CITF) from the funds and assets of the
alled coconut levy funds consisting of the 753,848,312 CIF
Preferred SMC shares and their accumulated dividends; the United
Coconut Planters Bank (UCPB); the CIIF Oil Mills; the 14 Holding
Corporations; the United Coconut Planters Life Assurance Corporation
(COCOLIFE); and all their respective assets, subsidiaries or their cash
equivalent if sold, and affiliates to the extent that the Supreme Court
has ruled or may rule in other cases to be owned by the government in
trust for the coconut industry and the coconut farmers.

Immediately, upon the effectivity of this Act, the registered
owners/stockholders of the assets/shares/corporations above-
mentioned shall cause the transfer thereof to the Foundation created
in Article III hereof.

They are hereby declared to be the special trust fund, with the
government as trustee for the beneficial owners who are the coconut



farmers. The CITF shall not form part of the general fund of the
government and shall be used only as provided by this Act.

Sec 2, Purposes and Uses of the Fund: The CIF shall be
used only for the following:

1, To finance the developmental/ operating expenses
of _legitimate/recognized coconut farmer
organizations including projects. such_—_as.
scholarships for the benefit of the deserving
children of the coconut farmers and the

ablishment of coconut seedling nurseries and the

farmers planting/replanting program;

2. To finance the
industries and commer
research relating to the coc

tablishment and operation of
I enterprises as well as
nut industry;

3. To finance social services for the coconut farmers
for their mutual assistance, protection and relief in
the form of social benefits, such as life, medical,
and accident insurance coverage of the coconut
farmers;

4. In general, to finance the attainment of the
objectives enumerated in Art. I Sec. 3 of this Act.

Sec. 3. Limitation of the Usage of the Fund.- Subject to the
provisions of sec. 4 hereof, only the income of the CITF shall be used
and only for the purposes and uses provided in Sec. 2 hereof.

Sec. 4. Allocation of Income of the Fund: The net income of

the CIt

hall be allocated as follows:

5% of the net income of the Trust Fund shall be
allocated for the administrative expenses of the PCFF;

25% of the net income of the Trust Fund shall be
allotted back to the Trust Fund;

70% of the net income of the Trust Fund shall be used
to fund the programs/ projects enumerated in sec, 2
hereof,


Sec. 5. Depository of the Fund.- Pursuant to Sec. 5 of P.D
755, the United Coconut Planters Bank (UCPB) as long as it is
principally owned by the government and the coconut farmers shall be
the depository of the CIT, the principal and income thereof, subject
to the terms and conditions as the PCFF and the UCPB may stipulate.
In the event the UCPB is sold to a private entity, PCFF shall choose
the new depository of the CITF provided that the new depository shall
be a government owned or controlled bank.

Sec 6. Investments of the CITF.- ‘Che CITF shall be invested or
allowed to be invested by the PCFF only in the following:

nat least
t three (3)

. shares of
annually de
consecutive ye:

‘ock of corporations which have b
ing dividends thereon for at le

ars;

. evidence of indebtedness of the Republic of the Philippines or
any other governmental agency or corporation guaranteed by
the Republic of the Philippines which pay interest
quarterly /semi-annually;

c. bonds, debentures, preferred shares or guaranteed stocks of
any solvent corporation or institutions created or existing
under the laws of the Philippines which pay interest
quarterly/ semi-annually;

d. time deposits and other investment products of reputable
banking institutions that are non-speculative in nature and
which pay interest quarterly / semi-annually.

ARTICLE III

Sec. 1. Creation of the Philippine Coconut Farmers
Foundation. ‘There is hereby created under the office of the President
the Philippine Coconut Farmers Foundation (PCFF) which shall
manage, administer, utilize or dispose certain assets of the Coconut
Industry ‘Trust Fund (CITP) established in Art. Il Sec. 1 hereof, It shall
be organized by the appointment of its 15-man Board of ‘Trustees
within 6 months from the effectivity of this Act.

Sec. 2. Principal Office- ‘the PCFF shall have its principal place of
business in Makati City, Metro Manila which shall be its domicile, and
such branches or agencies or subsidiaries within or outside the



Philippines as may be necessary for the proper conduct of its
operations,

Sec. 3. Purposes and Objectives: {he PCFF shall have the following
purposes and objectives:

a, To fully tap the potent conut farmers in order to
maximize their production and give them greater responsibility
in directing and developing the coconut industry;

b. To accelerate the growth and vertical integration of the coconut
industry and other related coconut products from the raw
material stage to the semi-finished and finally, the finished
product stage:

c. To improve, develop and expand the marketing system;
d. To ensure stable and better incomes for coconut farmers; and

e. In general to promote the attainment of the objectives of this
Act as provided in Art. I Sec. 3 and Art. II, Sec. 2 hereof.

Sec. 4. Specific and General Powers- In order to carry out the
purposes mentioned in the preceding Section, the PCFF shall have the
following purposes:

a. To invest in shares of stock corporations, at least sixty percent
(60%} of the capital stock of which is owned by Filipinos for the
purpose of financing the establishment, development and
expansion of new and/or existing coconut industrial, financial
and marketing enterprise with proven profitability or great profit
potential;

b. To organize subsidiaries for the purpose of constructing,
establishing and operating coconut centrals or mills and other
collateral and support enterprises which will enhance the
development, integration and modernization of the coconut
industry;

To provide financing or grants for technical and economic
research studies, promotional programs, scholarships and
social benefits and industrial manpower development projects
for the coconut industry and the coconut farmers;

d. To enter into contracts and execute such other acts and exercise
such powers as may be necessary to carry out the purpose of
this Act;



e. To provide funds for the implementation of Art. I Sec. 3 and Art.
Il Sec. 2 of this Act;

members of the Board of Directors of the
it administers/ manages enumerated in Sec.

f. To appoint th
companies/entiti
1 Art. IL of this Act,

Sec. 5. Composition of the Board of Trustees, Terms of Office,
Compensation- The corporate powers of the PCFF shall be vested in a
Board of Trustees to be appointed by the President of the Philippines
consisting of fifteen (15) trustees, eight (8) of whom shall represent
government sector, provided that the Philippine Coconut Authority
(PCA) Administrator shall be a Trustee, and seven (7) of whom shall
come from the coconut industry sector, provided that the three largest
nationwide coconut farmers organizations, the Philippine Coconut
Producers Federation, Inc. (COCOFED), The Philippine Association of
Small Coconut Farmers Organizations (PASCFO) and the Pambansang
Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan
(PKSMMN) shall have one nominee each. The depository bank—United
Coconut Planters Bank (UCPB) subject to Sec. 5 of Art. II hereof shall
have one nominee as well as the coconut industry umbrella
organization United Coconut Associations of the Philippines, Inc.
(UCAP). Other nationwide coconut farmer organizations duly
recognized and accredited by the Philippine Coconut Authority may be
represented in the Board, provided that in their absence, in the
meantime, the COCOFED, PASCFO and PKSMMN_ shall jointly
nominate such trustees,

Sec. 6. Term of Office- The member:
Shall have a term of office of six (6) years except those coming from the
government sector whose term shall be co-terminus with their
respective government position. The term of office of those appointed
to replace these government ‘Trustees shall also be co-termin
any case, they shall hold office only for a maximum of 6 years.
President may reappoint any of the private sector ‘Trustee:
appointed to replace a private or Truste:
remaining term of the vacating tru

of the Board of Trustees

Sec. 7. Powers of the Board of Trustees- Unless otherwis
provided by law, the corporate powers of the PCFF shall be exerc
all busini
and held by the Board of Truste

d,
conducted and all property of the Foundation controlled

8:


Sec. 8. Compensation of the Trustees- ‘The Trust:
no salaries except when serving as officers of the PCFF. They shall
however receive for every board meeting per diems as fixed by the
Board as well as monthly representation, transportation and other
allowances, Their travel and board and lodging expenses incurred for
every meeting shall be borne by the Foundation.

Sec. 9. Officers/ Professional Management of the PCFF- Except
for the Chairman and Vice-Chairman, the PCFF shall be managed and
operated by professional managers who have a record of proven
competence and experience of at least five (5) years in their respective
fields of competence in managing a corporation, for profit or non
, or a department or division thereof. These Officers are hereby
ified as professional managers and shall be exempt from the
es and regulations of the Civil service Commission:

a. Chairman

b. Vice-Chairman

. The President/Chief Operating Officer

e. The Treasurer who is also the Chief Financial Officer

f. The Corporate Se

g. Comptroller/Internal Auditor
h, Compliance Officer
i, Chief Legal Counsel

Such other officers as may be necessary and appointed by the
Board of Trustees

Sec, 10. Powers and Duties of the Officers of the PCFF

|. THE CHAIRMAN, The Chairman of the Board who shall be a

Tr ide at all meetings of the Board of Truste: s, in
sence or inability to do so preside, the meeting shall be
presided over by the Vice-Chairman, in the absence of both, the
President.

The Chairman of the Board shall be the CHIEF EXECUTIVE
OFFICER of the PCFF and shall have such other powers as may
be prescribed by the Board:



a. to preside at all meetings of the Board of Trustees;

b. to direct the implementation of the policies of the Board;

to take active supervision and control over the property,
interest, business and affairs of the PCFF, and subject to
the approval of the Board, may appoint, suspend or
remove any appointive officer or employee whenever in his
judgement it may become necessary to do

d, to present to the Board at any regular or special meeting
or at such other times as it may require, a report on the
state of the business of the PCF

e. To attend meetings of the Board, and render such
ssistance or advice as it may need concerning the state
of the business of the PCFF.

2, THE VICE-CHAIRMAN. The Vice-Chairman who shall be a
Trustee and who comes from the coconut farmers organizations
shall have such powers and perform such duties as the Board
of Trustees may from time to time prescribe and as may be
delegated to him by the Chairman. In the absence of the
Chairman, the Vice-Chairman shall act in his stead and shall
perform any and all such powers and duties pertaining to the
office.

o

THE PRESIDENT. The President who shall be elected by the
Board shall be the CHIEF OPERATING OFFICER of the PCFF
under the supervision of the Chief Executive Officer. Aside from
those which may have been assigned to him by the Board, his
powers and duties shall include the following:

a. to implement the policies formulated by the Board;

b. to supervise, control and direct subordinate officers and
employees in the discharge of their duties;

¢, to ensure that operations of the PCFF comply with the
rules and regulations of the Securities and Exchange
Commission, Bureau of Internal Revenue, the
Commission on Audit, Corporation Code, other laws and
regulatory agencies;

d. to act as an Ex-Officio Member of all Committees of the
Board;

€. to recommend salary adjustments, promotions of officers
and staff;

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f. to sign documents representing the PCFF in all its
transactions.

The President may delegate to any other officer any of his
powers and duties whenever in his judgment such delegation is
expedient and practicable.

4. THE VICE-PRESIDENT. The Board of Trustees may elect one
or more Vice-Presidents who may or may not be members of the
Board, whose powers and duties, in general, shall be
determined by the Board. In the absence or inability of the
President, the Board shall designate the Vice-President, to
perform and discharge the powers and duties of the office of the
President. If the Vice-Presidents are not members of the Board,
the Board shall designate who among the Board members shall
act in place of the President.

5. THE TREASURER. The Treasurer shall be elected by
the Board and shall have the care and custody of the funds,
securities and properties of the PCFF. He shall deposit all
moneys and other valuable effects in the name and to the credi
of the PCFF in the designated depository Bank, or with
other depositories as the Board may from time to time
designate, and any funds so deposited shall be withdrawable
only by checks or other instruments signed by duly authorized
officers of the PCFF. He shall render to the Board of Trustees or
the President whenever required an account of the financial
condition of the PCFF and of all his transactions as Treasurer.
He shall perform such other duties as the Board of Trustecs
may from time to time assign to him or are incident to his office.
In the absence of the Treasurer or his inability to act, his duties
shall be performed by such person as may be designated by the
Board of Trustees.

6. THESECRETARY. The Secretary who shall be
elected by the Board must be a Filipino citizen, a lawyer of good
standing and resident of the Philippines, shall have the
following powers and dutie

a. He shall keep ace
Board;

rate minutes of all meetings of the

b. He shall be custodian of the corporate
documents and papers of the PCFF;

seal, record,

c. He shall perform such other duties as may be assigned
to him from time to time by the Board or the Chairman, or
the President, and such other duties incidental to his
office;

cnt


During the abse
select the person to act

Te

d. He shall prepare such reports and statements as are
required by the Board and/or the President.

or inability of the Secretary, the Board shall
in his stead.

THE COMPTROLLER/INTERNAL AUDITOR. ‘The

Comptroller/Internal Auditor who shall be a Certified Public
Accountant shall be elected by the Board and shall be directly

responsible only to the Board of ‘Truste
following duti

He shall have the
, in addition to those which may be prescribed

by the Board, to wit;

a.

d.

To see to it that adequate records of all ets, liabilities

and transactions of the PCFF maintained and

safeguarded;

. To see that adequate audits thereof are currently and

regularly made;

c. To pass upon all vouchers, payrolls and other accounts

payable, and to determine that they are properly
authorized and certified;

To initiate and enforce measures and procedures relating
to all z

ounting/auditing matters, including clerical and
office methods, records, reports, to the end that the
business of the PCFF shall be conducted in accordance
with the law, lawful rules, regulations and directive of the

Commission on Audit and with the maximum safety

efficiency and economy;

To assess the accuracy and reliab

ty of the accounting
and auditing systems, and certify such statements of
financial condition /income stateme

1s as required by the
Board or as requested by the President;

To act as budget director and, in conjunctions with the
other officers and heads of departments, to prepare

annual budget covering all activities of the PCFF and to

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submit the same to the Board before the calendar year

begins;

g. To attend meeting of the Board of Trustees and the

si

anding committee when so required by the Chairman of
the Board and to render such assistance and advice as

the Chairman, President, or Board may desire

neerning

the books, accounts, and ems of financial

transactions of the PCFP, and all its branches, and of any
person, entity or Corporation in which the Foundation
may be interested;

h, In case of any defalcation, default or dereliction of duty

coming to his knowledge at any time to notify at once the
Chairman and the President.

In the absence of the Comptroller/Internal Auditor or his
inability to act, his duties shall be performed by such persons as by
may be designated by the Board.

8. COMPLIANCE OFFICER. The Compliance Officer of the
PCFF who shall be elected by the Board shall have the following
duties, to wit:

a. to oversee and coordinate the implementation of the
PCFF’s compliance system and to provide a
compliance update, at least on a quarterly basis;

b. to establish an effective and efficient regulatory
program and coordinate its implementation;

¢, to report to the Board or to its various committees
thru the President, all significant compliance issu
requiring immediate corrective actions;

d. to monitor compliance with the corporate
governance manual;

e. to disseminate new laws, rules and regulations
upon receipt from regulatory bodies, provide
highlights/synopsis/clarifications pertinent to new
regulatory issuance in a timely and accurate
manner;

13


f. to serve as primary contact with the regulators and
to review, consolidate and submit management
replies to the findings/exceptions of regulatory
bodies;

g. to develop and maintain a constructive working
relationship with regulatory agencies who will be
called upon from time to time clarily spec
provisions of laws, rules and regulations and to
discuss/clarify compliance findings/exceptions;

9. CHIEF LEGAL COUNSEL. The Chief Legal Counsel shall
be a member of good standing of the Integrated Bar of the
Philippines (IBP). He shall be the chief legal adviser of the
Board of Trustees and its officership and he shall
liaise/coordinate with the Office of the Government
Corporate Counsel (OGCC) and/or the Office of the
Solicitor General (OSG) concerning legal issues that may
affect PCFF for which the assistance of these offices may
be necessary.

Sec. 11. Tenure of Office. Subject to the provisions of Sec. 6
hereof all executive officers shall hold office at the pleasure of the
Board, and all other officers, agents and employees shall hold office
for such time as provided for in their contracts of employments and if
none is provided, at the pleasure of the Board.

Sec. 12. Other Officers. The Board of Trustees may
appoint such other officers as may be deemed necessary provide for
their powers and duties, and fix their compensation.

ARTICLE IV

Sec. 1. Members/Beneficiaries of the PCFF. The following
the minimum requirements to be defined as a coconut farmer and
be a member of the Foundation:

a. Coconut Farmer.- Any coconut farmer may apply as a
Coconut Farmer Member/Beneficiary of the PCFF. A coconut
farmer is a natural person, who:

!. Owns and tills the coconut farm by himself and/or with the

assistance of members of his family, or farm laborers;

14


2. Owns the coconut farm but does not till it by himself but with
the assistance of farm laborers;

As lessee, usufructuary, who tills the coconut farm by himself
and/or with the assistance of the farm laborers;

4, As mortgagee, who tills the coconut farm by himself and/or with

the assistance of the farm laborers;

5. Harvests and processes the coconut product and is
compensated in the form of the produce which he sells as his
own; or

6. Works in the coconut farm and is compensated either in cash or
in kind.

Sec. 2. All the coconut farmers of the Philippines who
respond to the Ground Survey Authorized under this Act and who
express their desire to be members shall be the member of the
Foundation subject to the provisions of Sec. 1 thereof.

ARTICLE V

Sec, 1. Ground Survey. For purposes of determining the
respective identities and addresses of coconut farmers who will be
cligible to become member of the PCFF, a ground survey of coconut
farmers (Ground Survey) under the supervision of the Philippine
Coconut Authority (PCA) through its Coconut Development Officers
who are stationed in all municipalities of the coconut regions of the
country shall be conducted and completed within two (2) years after
the appointment of the Board of Trustees of the Foundation subject to
these rules:

a. There is hereby created a Ground Survey Working
Committee (“Survey Committee”) which shall be composed of:

hy An official representative of the PCA who shall act as the
Chairman;

2. A representative of the COCOFED-Philippine Coconut
Producers Federation, Inc.

3. A representative of the Pambansang Koa
Samahang Magsasaka at Manggagawa
(PKSMMN); and

yon ng mga
Niyugan

15


4. A representative of Philippine Association of Small
Coconut Farmers Organizations (PASCFO).

b, The Survey Committee shall, within thirty (30) days from
the formal organization of the PCFF, meet to start the drafting of the
rules and regulations to govern the conduct of the Ground Survey and
the computerization of its results which shall be submitted for the
approval of the Board of ‘Trustees of the PCFF.

c, Simultaneously, the Survey Committee shall also prepare
the Budget for the Ground Survey and the computerization of the
results thereof which prepared budget shall be submitted to the Board
of Trustees of the PCFF for its final approval.

d. The results of the survey shall be computerized under the
Office of the Corporate Secretary of the PCFF for the preparation of the
Membership Book of the PCFF and for use of the Board of Trustees in
the determining the viability, sustainability and impact of development
projects for the benefit of coconut farmers submitted for its approval
and financing.

ec. ‘The results of the Ground Survey may also be used by the
PCA and the UCPB in the discharge of their statutory functions.

i Thereafter, the Board of Trustees may require periodical
ground surveys of coconut farmers for the purpose of updating the
Membership Book of the PCFF and such other purposes as the Board
of Trustees may deem appropriate. The PCFF shall provide a
mechanism for the admission of new members as a result of new
ground surveys.

Sec. 2. Use of Survey Results -'The results of the survey herein
authorized shall become the official list of coconut farmers in the
country and the official member of the Foundation. Only these
farmers shall be recipients, and  beneticiaries of any all
projects/programs that the PCFF directly or through their own
farmers’ organization may undertake.

Sec. 3. Contents of Survey. - The survey shall among others,
identify the coconut farmer either as landowner, landowner tiller,
tenant, lessee, mortgagee, trustee, or worker either paid in cash or in
kind. The coconut farmer shall also be asked to which coconut farmer

16


organization they belong and whether they agree to be a member of
the PCFF.

Sec. 4. Identification Cards. All the surveyed coconut
farmers shall be issued the PCE tamper-proof Membership IDs
which shall indicate the category of coconut farmer and the mother
coconut farmer organization to which they belong.

Sec. 5. Survey Committee Rules.-The Survey Committee
shall promulgate the rules and regulations for the survey and prepare
the necessary survey forms which shall observe the provisions of this
Article,

Sec. 6. Funds For the Survey.- ‘The PCFF shall appropriate
the Funds necessary to conduct the ground survey _ herein
authorized from the funds authorized by this Act to be used for the
PCFF's projects and programs.

Sec. 7. The Survey Committee may seck assistance from the
National Statistics Office in the formulation and implementation of its
survey methodologies, analysis and computerization.

ARTICLE VI

Sec. 1. Commission on Audit.- The funds and
disbursements of the PCFF shall be subj to the rules and
regulations of the Commission on Audit.

ARTICLE VII

Sec. 1. Exemption from Civil Service Rules. - The _ officers
and employees of the PCFF shall be exempt from the rules and
regulations of the Civil Service Commission. Further, they shall be
exempt from the Salary Standardization Law (RA 6758) as well as the
Law on Compensation in Govt. Corporations (RA 10149).

wv


ARTICLE VIII

Sec. 1. The PCFF may sell any of its trust fund assets. Any sale
however shall be by open and transparent public bidding and
pursuant to the existing rules and regulations on the disposition of
government asse

Sec. 2. All the proceeds of any sale authorized under this act
shall form part of the capital trust fund (CIF).

Sec. 3. Any sale authorized under this Act shall respect and
shall not result in the diminution of the rights of private, non-
sequestered stockholders of any of the assets of the CITF subject of
the sale. Said private, non-sequestered stockholders may however be
invited to sell their assets separately to the winning bidder at mutually
agreed terms and conditions.

Sec. 4, Intervention in the sale process by any person or group,
who have no interest in the coconut levy funds, shall not be allowed.

ARTICLE IX
Sec. 1. Immediately upon the effectivity of this Act, the
parties to Sandiganbayan Case #033 and its subdivided complaints
shall sit down and negotiate an Amicable Settlement of the cases

which shall re
corporations /asse!

It in the lifting of the sequestration of
subject matter of said cases.

Sec. 2. The Amicable Settlements resulting in the
implementation of Sec. 1 hereof shall be jointly submitted by the
parties to the Sandiganbayan for approval and subsequent dismissal
of the cases.

Sec. 3.
are not part

Intervention in the process by any person or group who
to the cases shall not be allowed.

18


ARTICLE X

Sec. 1. Repealing Clause - Aj) laws, decrees, executive orders,
rules and regulations and other issuances or parts thereof,
inconsistent with the provisions of this Act, are hereby repealed or
modified accordingly. PD 1468 in so far as it is suppletory to this Act
shall remain in effe

Sec. 2. Separability Clause - If any part or provision of
this Act is declared unconstitutional, other parts or provisions thereof
which are not affected thereby shall continue to be in full force and
effect.

Sec. 3. Effectivity- This Act shall take effect upon its
publication in at least two (2) national newspapers of general
circulation.

Approved

19