/
EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
©flier of t!)t »fi.utnrp
S E N A T E  
Senate Bill No. 
^  ^
*19 
JUL -1 
All ;05
R E C ti
r
Introduced by Senator FRANCIS N. PANGILINAN
AN ACT
CREATING THE COCONUT FARMERS AND INDUSTRY TRUST FUND, 
PROVIDING FOR ITS MANAGEMENT AND UTILIZATION, AND FOR OTHER 
PURPOSES
EXPLANATORY NOTE
More than 40 years have passed since levies were imposed on the produce of 
coconut farmers, supposedly for their benefit and the development of the coconut 
industry. Four decades later, it is high time that the benefits due to coconut farmers, 
especially the poor and marginalized, are consolidated and given to them to achieve a 
balanced, equitable, integrated, and sustainable growth and development of the coconut 
industry.
This crucial piece of legislation seeks the establishment of a Trust Fund dedicated 
for the benefit of coconut farmers and development of the coconut industry. Further, this 
measure aims to create the mechanism for the mandates prescribed by different Supreme 
Court decisions on the disposition of some of the coconut levy assets; to conform to 
governmental procedures on the management and utilization of the available coco levy 
funds; and to realize the aspirations of the coconut farmers on how the coco levy funds 
can be managed, invested, allocated, and utilized.
In view of the foregoing, the passage of this measure, which was passed by both 
Houses last Congress, is earnestly sought.
FRANCTS'N. PANGILINAN


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E  
Senate Bill No. 31
of tl)r srrrriarp
•19 
JUL -1 
All «5
RECEiV- 
[i\
Introduced by Senator FRANCIS N. PANGILINAN
AN ACT
CREATING THE COCONUT FARMERS AND INDUSTRY TRUST FUND, 
PROVIDING FOR ITS MANAGEMENT AND UTILIZATION, AND FOR OTHER 
PURPOSES
Be it enacted by the Senate and the House of Representatives of tite Philippines in Congress 
assembled:
1 
SECTION 1. Short Title. - This Act shall be known as the "Coconut Farmers and
2 
Industry Development Act."
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,
5 
under various statutes and to expedite the delivery thereof 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. ~ As used in this Act:
10 
(a) " CIIF" shall refer to the Coconut Industry Investment Fund created by virtue
11 
of Presidential Decree 1468;
12 
(b) "CIIF - Oil Mills Group" shall refer to the CIIF 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.;
16 
(c) "CIIF Holding Companies" shall refer to the fourteen (14) holding companies;
17 
namely; Anglo Ventures Corporation; ACS Investors, Inc.; Arc Investors, Inc.; AP


1 
Holdings, Inc.; Fernandez Holdings, Inc.; First Meridian Development, Inc.; Randy Allied
2 
Ventures, Inc.; Rock Steel Resources, Inc.; Roxas Shares, Inc.; San Miguel Officers Corp.,
3 
Inc.; Soriano Shares, Inc.; Te Deum Resources, Inc.; Toda Holdings, Inc.; and Valhalla
4 
Properties Limited, Inc.;
5 
(d) “CIIF SMC Block Shares" shall refer to the 33,133,266 shares of stock in San
6 
Miguel Corporation (SMC), sequestered by the PCGG in April 1986 and representing 31 %
7 
of the total outstanding capital stock of SMC;
8 
(e) “Converted SMC Series 1 Preferred Shares" shall refer to that portion of the CIIF
9 
SMC Block Shares covering 753,848,312 preferred shares of stock in SMC and
10 
representing 24% of the outstanding capital stock of SMC;
11 
(f) " Coconut Levy Assets" shall refer to any and all kinds of property, whether real
12 
or personal, tangible or intangible, wherever situated, which have been acquired through
13 
the Coconut Levy Funds as defined in this Section, including those assets that may be
14 
recovered in favor of the government, as well as the fruits, or income therefrom, including
15 
those acquired in exchange or substitution thereof.
16 
These shall include, among others, the following;
17 
i. 
The shares of stock in Lfnited Coconut Planters Bank (UCPB) that were
18 
determined to be owned by the government;
19 
ii. 
The CIIF - Oil Mills Group;
20 
iii. 
The CIIF Holding Companies; and
21 
iv. 
The Converted SMC Series 1 Preferred Shares;
22 
(g) “Coconut Levy Funds" shall refer to various funds generated from levies, taxes,
23 
charges, and other fees exacted or imposed pursuant to or in connection with the sale of
24 
copra rececada or its equivalent in other coconut products, and collected for the most part
25 
from coconut farmers, planters, millers, refiners, processors, exporters, desiccators and
26 
other end-users of copra rececada or its equivalent in other coconut products.
27 
Specifically, the term shall refer to any or all of the following:


2
3
4
5
6
7
8 
9
10
1
i. 
The Coconut Investment Fund created under Republic Act No. 6260;
ii. 
The Coconut Consumers Stabilization Fund, later renamed as the 
Coconut Industry Stabilization Fund, created under Presidential Decree 
No. 276;
iii. 
The Coconut Industry Development Fund created under Presidential 
Decree No. 582;
iv. 
The Coconut Industry Investment Fund created under Presidential 
Decree No. 1468; and
V. 
The Coconut Reserve Fund under Presidential Decree No. 1468 and 
Presidential Decree No. 1842.
11 
(h) "Committee'' shall refer to the Coconut Farmers and Industry Trust Committee
12 
created under Section 12 of this Act;
13 
(i) "Investment Guidelines" shall refer to the investment management guidelines,
14 
rules, procedures, and policies to be formulated by the Committee, as may be amended
15 
from time to time, which shall provide the parameters for investment of the Trust Fund
16 
or any portion thereof, and shall include, among others, asset allocation, criteria for
17 
selection of fund managers, required income from the Trust Fund, and other investment
18 
management threshold requirements;
19 
0) " PCA" shall refer to the Philippine Coconut Authority, created under
20 
Presidential Decree 232 (S. 1973), as amended by Presidential Decree 1468 (S. 1978);
21 
(k) "PCGG" shall refer to the Presidential Commission on Good Government,
22 
created under Executive Order No.l (S. 1986);
23 
(1) "PMO" shall refer to the Privatization and Management Office organized
24 
under Article III of Executive Order No. 323 (S. 2000);
25 
(m) "Plan" shall refer to the Coconut Farmers and Industry Development Plan, to
26 
be prepared under Section 11 of this Act;
27 
(n) " President" shall refer to the President of the Republic of the Philippines;


1 
(o) "Prohibited Investments" shall refer to any of the following: direct investments
2 
into companies, private placements and direct lending, derivative instruments, margin
3 
purchases, short sales, and investments in real estate;
4 
(p) "Trust Fund" shall refer to the Coconut Farmers and Industry Trust Fund
5 
created under Section 6 of this Act;
6 
(q) " Trust Fund Income" shall refer to the income, interest earnings, and other
7 
monetary benefits, realized by and accruing to the Trust Fund or any portion thereof; and
8 
(r) "Trust Fund Principal" shall refer to:
9 
i. 
theinitialTrustPrincipal which shall be composed of the proceeds from
10 
the redemption of the Converted SMC Series 
1 Preferred Shares,
11 
dividends declared, paid, or issued on the Converted SMC Series 
1
12 
Preferred Shares, and all income or interest derived therefrom as of the
13 
effectivity of this Act, and any other cash Coconut Levy Asset, that are
14 
held by the Bureau of Treasury (BTr) as a special account in the general
15 
fund and as an escrow account, and cash held by UCPB as administrator
16 
of the CIIF;
17 
ii. 
any and all proceeds of privatization of the Coconut Levy Assets
18 
remitted thereto by the Privatization and Management Office, and
19 
iii. 
proceeds of privatization of any or all properties or assets conveyed by
20 
any person, group or entity to the Committee, from time to time, as
21 
provided in Section 7 hereof.
22 
II
23 
Audit and Reconveyance of Coconut Levy Assets
24 
SEC. 4. Accounting, Inventory and Audit of Coconut Levy Assets. - Within thirty
25 
(30) days from the effectivity of this Act, the PCGG shall conduct a complete accounting
26 
and inventory of the Coconut Levy Assets, including the amount, value, description and
27 
nature of such funds, properties, assets, records, choses in action, and other rights, claims.


1 
or causes of action pertaining thereto, as well as the investments, disbursements and
2 
expenditures relating to the Coconut Levy Funds and submit a report to the Office of the
3 
President, the Committee, the Commission on Audit (COA), and the BTr.
4 
The COA shall audit the accounting and inventory of the Coconut Levy Assets
5 
prepared by the PCGG, for the purpose of, among others, determining the completeness
6 
of said inventory, establishing the reasonableness of the asset valuation, and tracing the
7 
flow of the Coconut Levy Funds.
8 
Within sixty (60) days from the submission of the accounting and inventory of the
9 
Coconut Levy Assets, the COA shall submit to the Committee its audit report, together
10 
with a complete list of Coconut Levy Assets and their valuation, and the empirical basis
11 
and the methodologies employed for the said valuation.
12 
The Committee shall, within fifteen (15) days from its receipt of the audit report,
13 
publish the same in at least two (2) newspapers of national circulation.
14 
Nothing herein shall be construed as preventing the PMO from procuring a third-
15 
party appraisal of any of the Coconut Levy Assets prior to or in the course of preparing
16 
the privatization or disposition plans for the said assets.
17 
SEC. 5. Reconveyance of Coconut Levy Assets. - Immediately upon the effectivity
18 
of this Act, the PCGG, the government representatives to the boards of
19 
sequestered/surrendered corporations, and any government agency or person having
20 
any Coconut Levy Asset in its administration, authority, custody or control, shall perform
21 
or cause the performance of the following:
22 
(1) reconvey title to the Republic of the Philippines over the Coconut Levy Assets;
23 
(2) deliver all stock certificates and other evidence of ownership to the BTr for
24 
safekeeping; and
25 
(3) transfer all cash Coconut Levy Assets to the Trust Fund.


1 
The COA shall conduct an audit to determine compliance with pertinent laws,
2 
rules and regulations on reconveyance of the Coconut Levy Assets to the Republic of the
3 
Philippines.
4 
III
5 
Coconut Farmers and Industry Trust Fund
6 
SEC. 6. The Coconut Fanners and Industry Tnist Fund. - There is hereby created a
7 
trust fund to be known as the "Coconut Farmers and Industry Trust Fund," herein
8 
referred to as the "Trust Fund," which shall be capitalized, managed, invested, utilized,
9 
and accounted for in the manner provided in this Act.
10 
The Trust Fund shall be perpetually maintained and shall be used exclusively for
11 
the benefit of the coconut farmers and for the development of the coconut industry.
12 
SEC. 7. Capitalization of the Trust Fund. - The proceeds from the redemption of
13 
the Converted SMC Series 1 Preferred Shares, dividends declared, paid, or issued on the
14 
Converted SMC Series 1 Preferred Shares, and all income or interest derived therefrom
15 
as of the effectivity of this Act, and any other cash Coconut Levy Asset, that are held by
16 
the BTr as a special account in the general fund and as an escrow account, and cash held
17 
by UCPB as administrator of the CIIF, shall form part of the initial Trust Principal of the
18 
Trust Fund. For this purpose, any provision of law to the contrary notwithstanding, the
19 
BTr and UCPB shall transfer any and all monies to the Trust Fund.
20 
The Trust Fund shall thereafter be augmented with all proceeds of
21 
privatization/disposition of the Coconut Levy Assets remitted directly thereto by the
22 
PMO in accordance with this Act, any and all forms of income, interests, earnings, yields,
23 
or any monetary benefit derived prior to the privatization or disposition of any of the
24 
Coconut Levy Assets, and any and all forms of income, interests, earnings, yields, or any
25 
monetary benefit derived from retained Coconut Levy Assets.
26 
Nothing in this Act shall be understood to prevent or prohibit any person, group or
27 
entity from conveying to the Committee other properties and/or additional assets either


1 
for the use of the coconut industry, or for purposes of privatization, in which case, the
2 
proceeds of such privatization shall form part of the Trust Fund.
3 
No portion of the Trust Fund shall accrue to the general fund of the National
4 
Government.
5 
SEC. 8. Management and Investment of the Trust Fund. - The Committee shall
6 
manage and invest the Trust Principal with the skill, care, prudence and extraordinary
7 
diligence necessary under the circumstances that a prudent person acting in like capacity
8 
and familiar with such matters would exercise in the conduct of an enterprise of a like
9 
character and with similar aims. For this purpose, it shall adhere to the basic principles
10 
of safety, capital preservation, growth, and liquidity.
11 
To achieve its goals, the Committee shall promulgate the necessary Investment
12 
Guidelines and shall tap the services of the BTr and other fund managers in
13 
implementing the said Investment Guidelines. No funds shall be invested in Prohibited
14 
Investments.
15 
Immediately upon the effectivity of this Act, and until such time that the Committee
16 
has promulgated the Investment Guidelines and appointed fund managers for the Trust
17 
Fund, the BTr shall invest all cash Coconut Levy Assets under its administration in
18 
government securities that will provide the best possible return for the Trust Fund.
19 
SEC. 9. Utilization of the Trust Fund Principal and the Trust Fund Income. - For
20 
purposes of the initial implementation of the Plan, the execution of programs and projects
21 
identified in the Plan that are allowed to be funded out of the Trust Fund, and pending
22 
the accrual or availability of the Trust Fund Income, the amount not exceeding ten percent
23 
(10%) of the initial Trust Fund Principal may be disbursed by the Committee within two
24 
(2) years commencing from the approval of the Plan by the President. Thereafter, only
25 
the Trust Fund Income accruing during the immediately preceding year can be used to
26 
fund the programs and projects identified in the Plan.


1 
All fund releases approved by the Committee shall be released directly to the
2 
implementing agencies.
3 
SEC. 10. Designation of the Bureau of Treasury as Depository of the Trust Fund. -
4 
Any law to the contrary notwithstanding, the Bureau of Treasury is hereby designated as
5 
the depository of the Trust Fund, which shall: (a) hold and account the Trust Fund in the
6 
manner set forth by the Committee, (b) release funds directly to the implementing
7 
agencies upon the instruction of the Committee, (c) when so appointed by the Committee,
8 
act as a fund manager of the investments of the Trust Fund with the authority and
9 
accountability as that of a private fund manager, and (d) perform other tasks as may be 
10 
mandated by the Committee.
11
12
IV
Coconut Farmers and Industry Development Plan
13 
SEC. 11. Preparation of the Coconut Farmers and Industry Development Platu -
14 
The National Economic and Development Authority, the Department of Agriculture, the
15 
Department of Agrarian Reform, the Department of the Interior and Local Government,
16 
the Department of Public Works and Highways, the Department of Social Welfare and
17 
Development, the Department of Trade and Industry, the Philippine Coconut Authority,
18 
the Commission on Higher Education, National Anti-Poverty Commission, three (3)
19 
representatives from coconut farmers organizations, one each coming from Luzon,
20 
Visayas and Mindanao, and one (1) representative of the industry associations, are herein
21 
constituted as an ad-hoc committee that will prepare the Coconut Farmers and Industry
22 
Development Plan. The Director-General of NEDA, as chair the ad hoc committee, shall
23 
identify the coconut farmers organizations and industry association that will become
24 
members of the ad hoc committee.
25 
In the performance of its function, the ad-hoc committee shall consult coconut
26 
farmers and their organizations, industry associations, civil society organizations,
27 
academe, concerned government agencies and other stakeholders in the coconut
28 
industry.


1 
The Plan shall set the directions and policies for the development and rehabilitation
2 
of the coconut industry. It shall define the roles and contribution of Coconut Levy Assets
3 
to support said rehabilitation and development, which shall serve as basis in the retention
4 
or privatization/disposition of any or all of the Coconut Levy Assets.
5 
In the formulation of the Plan, the ad-hoc committee shall be guided by the following
6 
objectives:
7 
a) increased farm productivity and income of coconut farmers;
8 
b) establishment of coconut-based enterprises
9 
c) rehabilitation and modernization of the coconut industry towards global
10 
competitiveness; and
11 
d) poverty alleviation and social equity.
12 
The Plan shall include a national program for (a) coconut productivity, including
13 
intercropping and livestock raising; (b) community-based coconut enterprises, including
14 
integrated processing of coconut products and downstream products; (c) coconut farmers
15 
organization and development; and (d) social protection that directly benefit coconut
16 
farmers, farm workers, and their families, taking into consideration existing social
17 
protection programs of the government. For purposes of the establishment and granting
18 
of social protection programs, the Committee is hereby authorized to validate the
19 
reliability and completeness of the coconut farmers registry of the PCA from which the
20 
beneficiaries shall be identified.
21 
The Plan shall provide the criteria for targeting beneficiaries, the indicators in
22 
determining the attainment of the abovementioned objectives, and the mechanisms for
23 
monitoring and evaluating the impact, of the different components of the program.
24 
For the avoidance of doubt, programs relating to planting, replanting, fertilization,
25 
research and development, market promotion, farm-to-market roads, and direct lending,
26 
shall be funded through regular appropriations.


1 
The Plan shall provide an indicative funding requirement or allocation for the
2 
implementation of any and all of the programs and projects to be funded by the initial
3 
Trust Fund Principal and the Trust Fund Income, which funding or allocation shall be
4 
itemized or broken down on a project-to-project basis: Provided, That (i) for projects which
5 
are recurring, or to be implemented on a regular basis, the allocation shall indicate the
6 
annual fund that may be required to implement said project; and (ii) for projects that are
7 
to be implemented or concluded within a period of time, the allocation shall indicate the
8 
total fund that may be required for the implementation of the whole project, itemized
9 
according to the phases or stages of said project.
10 
Within one hundred eighty (180) days from the start of the effectivity of this Act,
11 
the Plan shall be submitted to the President, as endorsed by the Committee, for approval.
12 
Any amendment to the Plan shall require the approval of the President.
13 
V
14 
The Coconut Farmers and Industry Trust Committee
15 
SEC. 12. Creation of the Coconut Fanners and Industry Tmst Committee. - There
16 
is hereby created the Coconut Farmers and Industry Trust Committee which shall be
17 
attached to the Office of the President.
18
19
20 
21 
22
23
24
25
26
27
28
The Committee shall have the following powers and functions:
(a) Supervise, coordinate and monitor the implementation of the Coconut 
Farmers and Industry Development Plan;
(b) Formulate and amend, as may be necessary, the Investment Guidelines: 
Provided, That no funds shall be invested in Prohibited Investments;
(c) Appoint fund managers as it deems necessary to manage the investments of 
the Trust Fund;
(d) Approve disbursements from the initial Trust Fund Principal and the Trust
Fund Income, including the funding for (i) the operation of the Committee
which shall not exceed Forty Million Pesos (P40,000,000.00) on the first year
and not more than three percent (3%) of the Trust Fimd Income for every year
10


2
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1
thereafter, (ii) the formulation of the Plan, and (iii) the conduct of the 
inventory and audit of the Coconut Levy Assets, which shall be charged 
against the initial Trust Fund Principal or the Trust Fund Income when 
available;
(e) Exercise on behalf of the National Government all rights and incidents of 
ownership to the Coconut Levy Assets, including the right to vote, whether 
directly or through duly authorized nominees, shares of stock held in the 
name of the National Government;
(f) Pursuant to the directions and policies set in the Plan, identify all portions of 
the Coconut Levy Assets for privatization or disposition and arrange for their 
transfer to the PMO for the same purposes;
(g) Establish guidelines for the privatization or disposition of the Coconut Levy 
Assets by the PMO;
(h) Approve, or disapprove, on behalf of the National Government and without 
need of any further approval by, or other action from any other government 
institution or agency, the sale, disposition or dissolution of such assets, which 
sale or disposition shall be conducted by the PMO: Provided, That the 
Committee itself, or any of its members, are prohibited from undertaking the 
marketing of any such assets, participating in the negotiation for their sale, or 
making the sale itself, or bring about any situation which may give rise to a 
conflict of interest;
(i) Approve the financial requirements of the PMO in relation to its functions set 
forth in this Act, including its annual budget for operations, conservation, 
rehabilitation, management and privatization/disposition of the Coconut 
Levy Assets transferred and entrusted under its care;
11


2
3
4
5
6
7
8
1
0  
Appoint, transfer, remove for cause, personnel of the Committee, and fix their 
remuneration in accordance with the Salary Standardization Law and civil 
service laws, rules and regulations;
(k) Issue policies, rules, and guidelines as may be necessary to implement the 
provisions of this Act; and
(l) Exercise such other incidental powers and functions as may be necessary to 
attain the objectives of this Act.
SEC. 13. Composition. - The Committee shall be composed of the Secretary of 
9 
Finance as Chairman, the Secretary of Agriculture as Co-Chairman, the Director-General
10 
of the National Economic and Development Authority, the Secretary of the Department
11 
of Trade and Industry, the Administrator of the Philippine Coconut Authority, and six
12 
(6) representatives from the coconut farmers sector, divided into two (2) representatives
13 
each for the island groupings of Luzon, Visayas and Mindanao, as members.
14 
The six (6) representatives from the coconut farmers sector must be Filipino citizens,
15 
registered with the coconut farmers registry, have considerable experience and reputable
16 
track record in promoting coconut farmer interests and welfare, and nominated by
17 
coconut farmers organizations or cooperatives that are active for the past three (3) years
18 
in farmer organization and development or community enterprise development. They
19 
shall be appointed by the President from a list of four (4) nominees for each island
20 
grouping, as submitted by the Committee. They shall each hold a term of three (3) years,
21 
and may be reappointed once. Any appointment to fill the vacancy in the Committee
22 
arising from death, removal, retirement, or resignation of the representative of the
23 
coconut farmers sector shall be made only for the unexpired term.
24 
Within thirty (30) days following the effectivity of this Act, the Committee shall
25 
promulgate a nomination and screening process of nominees as representatives of the
26 
coconut farmers sector in the Committee, in consultation with coconut farmers
27 
organizations.
12


1 
SEC. 14. Ex Officio Alternates. - The ex officio members of the Committee may
2 
designate their respective alternates who shall be the officials next-in-rank to them and
3 
their acts shall be considered the acts of their principals.
4 
SEC. 15. Meetings. - The Committee shall meet at least once a month or as frequent
5 
as may be necessary and expedient to discharge its responsibilities.
6 
The presence of at least a majority of the members of the Committee shall constitute
7 
a quorum, and the concurrence of a majority of the members present at a meeting at
8 
which a quorum exists shall be adequate for any decision by the Committee: Provided,
9 
That the approval of at least seven (7) members of the Committee is required where the
10 
matter involves the approval of (i) any privatization or disposition proposal involving
11 
more than Five Hundred Million Pesos (PhP500/000,000.00), in pursuance of the policies
12 
and directions set in the Plan with regard to the privatization of Coconut Levy Assets,
13 
and (ii) the disbursement of funds exceeding Fifty Million Pesos (PhP50,000,000.00), and:
14 
Provided, finally. That the approval of at least nine (9) members is required where the
15 
matter involves: (i) the promulgation of the Investment Guidelines, and (ii) investment
16 
of a portion of the Trust Fund involving at least Five Hundred Million Pesos
17 
(P500,000,000.00).
18 
SEC. 16. Compensation of the Members of the Committee. - Members of the
19 
Committee may be entitled to per diems and reimbursable expenses, as prescribed under
20 
existing rules and regulations issued by the President and the Department of Budget and
21 
Management.
22 
SEC 17. Executive Director of the Committee. - The President, upon
23 
recommendation of the Committee, shall appoint an Executive Director who shall possess
24 
the following qualifications: a Filipino citizen, a degree holder, has professional
25 
experience preferably in public finance, investment management, program and policy
26 
development, or project monitoring and evaluation, and knowledgeable with the
27 
development of the coconut industry.
13


1
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5
6
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8 
9
10
11
12
13
21
22
The Executive Director shall have the following powers and functions:
a) Execute and administer the policies and decisions promulgated by the 
Committee;
b) Monitor the progress of the implementation of the Plan, and submit periodic 
reports to the Committee;
c) Direct and supervise officials, employees, representatives and agents of the 
Committee;
d) 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;
e) Keep and maintain official records and reports of the proceedings of the 
Committee;
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
15 
consistent with the provisions of this Act.
16 
SEC. 18. Accounting and Auditing. - The Committee shall maintain records and
17 
accounts of all investments, receipts, disbursements and other transactions relating to the
18 
management, administration, and utilization of the Trust Fund. These records and
19 
accounts shall be maintained in accordance with existing accounting and auditing laws,
20 
rules and regulations, and shall be audited by the COA.
VI
Privatization of the Coconut Levy Assets
23 
SEC. 19. Privatization of the Coconut Levy Assets. - Pursuant to the direction and
24 
policies set in the Plan, the Committee shall determine the Coconut Levy Assets which
25 
need to be privatized and which should be retained by the National Government to
26 
support the coconut farmers and the development of the coconut industry.
27 
For this purpose, the Committee shall be guided by any of the following standards:
14


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


1 
form of divestment or transmission of rights over the Coconut Levy Assets, including a
2 
partnership with the private sector in the management or operation of these Coconut
3 
Levy Assets prior to actual sale or disposition.
4 
Prior to the implementation of any privatization plan for corporations transferred
5 
to it, the PMO shall have the following powers:
6 
i. require any of the subject corporations to adopt and implement cost-reduction
7 
measures to enhance the viability, and therefore the disposability of such
8 
corporations, to potential buyers, including measures requiring personnel
9 
retrenchment plans or other forms of corporate downsizing;
10 
ii. direct any of the subject corporations to submit to the PMO, within fixed time-
11 
tables, such reports and information as the PMO may require in the exercise of
12 
its ownership, administrative, and disposition over such corporations or their
13 
assets; and
14 
iii. cause 
the subject corporations 
to undergo 
rehabilitation, 
merger,
15 
consolidation, spin-off, or other corporate acts of reformatory nature as it may
16 
deem necessary or desirable to expedite the disposition and privatization
17 
under this Act.
18 
In all such cases, no corporate measure shall be implemented without the approval
19 
of the Committee.
20 
SEC. 22. Committee to Determine Transfer Value. - The Committee is hereby vested
21 
with full and complete powers and prerogatives to determine transfer values and related
22 
valuations at which the Coconut Levy Assets shall be transferred and conveyed to the
23 
PMO pursuant to the mandate of this Act and upon reasonable consultation with the
24 
COA or a third-party appraiser: Provided, That any valuation approved by the Committee
25 
for purposes of the transfer to the PMO shall not be deemed a condonation, waiver, or
26 
extinguishment of any obligation by any party whose vested rights may be impaired by
27 
such transfer.
16


2
3
4
5
1
6
7
16
17
SEC. 23. Remittance of Proceeds of Privatization. - Any provision of law to the 
contrary notwithstanding, all proceeds or receipts from the sale of Coconut Levy Assets, 
except portions thereof for reimbursable custodianship and operational expenses, or such 
amount approved by the Committee to be retained by the PMO, shall be remitted to the 
Trust Fund.
SEC. 24. 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
8 
Coconut Levy Assets, which shall include, among others, a description of the individual
9 
assets as disposed of, their purchasers, the consideration received, and the agreed terms
10 
of payment.
11 
The PMO shall, within three (3) months following the closure of books at the end of
12 
each fiscal year, submit a comprehensive annual report duly approved or endorsed by
13 
the Committee, to the President and Congress on the status of its privatization efforts and
14 
its disposition program for the Coconut Levy Assets, which shall include the items
15 
described in the immediately preceding paragraph.
VII
Miscellaneous
18 
SEC. 25. Suppletory Application of Republic Act No. 10149. - The provisions of
19 
Republic Act No. 10149, otherwise known as the "GOCC Governance Act of 2011,"
20 
insofar as they are not inconsistent with the provisions of this Act, shall apply
21 
suppletorily.
22 
SEC. 26. Congressional Oversight. - The Congressional Oversight Committee on
23 
Agricultural and Fisheries Modernization (COCAFM) shall exercise oversight on the
24 
implementation of this Act.
25 
SEC. 27. Separability Clause. - If any provision of this Act is declared invalid or
26 
unconstitutional, the other provisions not affected by such declaration shall remain in full
27 
force and effect.
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1 
SEC. 28. Repealing Clause. - All laws, executive orders, administrative orders, and
2 
rules and regulations inconsistent with this Act are hereby repealed or amended
3 
accordingly.
4 
SEC. 29. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
5 
complete publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
18