Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

3223

House Bill No.

Introduced by Representative: Florencio Gabriel “Bem” G. Noel

EXPLANATORY NOTE

Article XII, Section 1 of the 1987 Constitution provides: The goals of the national
economy are a more equitable distribution of opportunities, income, and wealth; a sustained
increase in the amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life for all, especially
the underprivileged.

The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both domestic
and foreign markets. However, the State shall protect Filipino enterprises against unfair
foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective organizations, shall be encouraged to
broaden the base of their ownership.

Coconut remains to be one of the most important crops and major export products of the
Philippine, and it contributes to 3.6% of the country’s gross value-added (GVA) in agriculture,
next to banana, corn and rice. Indeed, the country remains to be a top producer and exporter of
coconut worldwide.

However, despite the continued growth of coconut exports, there has been no remarkable
improvement in the coconut industry for the past years. Thus, there is an urgent need to address
the stagnant growth of the coconut industry because the available resources and opportunities are
not being maximized. In improving and developing the coconut industry, funds will be more
accessible for developmental programs, improvement of coconut farmer's income, and
improvement of the farms’ productivity, among others.


In line with the 1987 Constitution’s mandate, this bill is seen as timely and necessary
‘measure to consolidate all assets and benefits emanating from the coconut levy in order to create
a trust fund for the exclusive benefit of coconut farmers and farm workers as embodied in the
Coconut Farmers Development Fund.

The coconut industry is an important pillar of Philippine agriculture and its development
would pave way for the significant improvement of the lives of millions of Filipino people.
Hence, the passage of this bill is one of the collective efforts exerted to finally claim back, for the
benefits of the coconut farmers and their families, the billion worth coco levy funds. In
positioning, and striving to reach the full potential of the cloconut industry, the country should
be persistent in pushing for the disbursement of the coco levy.

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

FLORENCIO GABRIEL G. NOEL


3223

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

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

Section 1. Short Title. This Act shall be known as the "Coconut Farmers and Industry
Development Trust Fund Act.”

Section 2. Declaration of Policy. It is hereby declared the policy of the State to pursue
and attain the balanced, equitable, integrated, and sustainable growth and development of
the coconut industry. Towards this end, the State shall adopt the necessary measures to
immediately address the serious problems besetting the coconut industry, protect the
socio-economic well-being of coconut farmers, and ensure that the benefits due them,
especially the poor and the marginalized, under various statutes shall be consolidated and
their delivery expedited.

Chapter I
Definition of Terms

Section 3. Definition of Terms. As used in this Act:

1. Coconut Industry Investment Fund (CIF) refers to the Fund created pursuant to
Presidential Decree (PD) No. 1468, which authorized the United Coconut Planters Bank
(UCPB) to utilize the surplus funds from the Coconut Consumers Stabilization Fund
(CCSF) and the Coconut Industry Development Fund (CIDF) for investments in the form
of shares of stock in corporations organized for the purpose of engaging in the
establishment and operation of industries, commercial activities, and other allied business
undertakings related to the coconut industry in all its aspects and the establishment of a
research program into the commercial and industrial uses of coconut.

2. CIF Holding Companies refer to the fourteen (14) holding companies, namely: (1) Anglo
Ventures Corporation; (2) ASC Investors, Inc.; (3) Are Investors, Incorporated; (4) AP
Holdings, Incorporated; (5) Fernandez Holdings, Incorporated; (6) First Meridian
Development, Inc.; (7) Randy Allied Ventures, Incorporated; (8) Rock Steel Resources,
Incorporated; (9) Roxas Shares, Incorporated; (10) San Miguel Officers Corporation,
Incorporated; (11) Soriano Shares, Incorporated; (12) Te Deum Resources, Incorporated;
(13) Toda Holdings, Incorporated; and (14) Valhalla Properties Limited, Incorporated,
created by the CIF Oil Mills Group to acquire, hold and manage the shares of stocks of
San Miguel Corporation (SMC).

3. CIF Oil Mills Group refers to the six (6) ClIF companies, namely: (1) Southern Luzon
Coconut Oil Mills; (2) Cagayan de Oro Oil Company, Incorporated; (3) lligan Coconut
Industries, Incorporated; (4) San Pablo Manufacturing Corporation; (5) Granexport


Manufacturing Corporation; and (6) Legaspi Oil Company, Incorporated, acquired by the
UCPB using the CIIF.

CIF SMC Block Shares refer to the 33,133,266 shares of stock in SMC, sequestered by
the Presidential Commission on Good Government (PCGG) in April 1986 representing
31% of the total outstanding capital stock of SMC.

Converted SMC Series I Preferred Shares refer to that portion of the ClIF SMC Block
Shares covering 753,848,312 preferred shares of stock in SMC representing 24% of the
outstanding capital stock of SMC.

Coconut Farmer refers to:
|. Farmer-owner of a coconut farm who:

a. Tills the land (owner-cultivator); or
b. Does not till the land but has control and supervision over the cultivation
of a farm; and

2. A non-owner of the coconut farm who is either a:

a. Leaseholder or tenant who tills or supervises the cultivation of the farm; or

b. Farm worker or laborer, whether seasonal or itinerant, engaged in the
harvesting of the nuts and processing of copra as major means of
livelihood.

Coconut Levy Assets refer to any and all kinds of property, whether real or personal,
tangible or intangible, wherever situated, which have been acquired through or otherwise
funded by the Coconut Levy Funds, including those assets that may be recovered in favor
of the Government, as well as the fruits or income therefrom, including those acquired in
exchange or substitution thereof. These shall include, among others, the following:

|. The shares of stock in the UCPB determined to be owned by the Government;
2. The CIF Oil Mills Group;

3. The ClIF Holding Companies;

4, The Converted SMC Series | Preferred Shares; and

5. Remaining CIIF SMC Block Shares or the proceeds of their sale.

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

1. The Coconut Investment Fund created under Republic Act (RA) No. 6260;


3

4.
3.

The Coconut Consumer Stabilization Fund, later renamed as the Coconut
Stabilization Fund, created under PD No. 276;

The Coconut Industry Development Fund created under PD No. 582;

The Coconut Industry Investment Fund created pursuant to PD No. 1468; and

The Coconut Reserve Fund under PD No. 1468 and PD No. 1842.

i. Investment Guidelines refer to the investment management guidelines, rules, procedures,
and policies to be formulated by the Coconut Farmers and Industry Trust Fund Committee
created under Section 11 of this Act, hereinafter referred to as the Committee, and as may
be amended from time to time, which shall provide the parameters for investments of the
Trust Fund or any portion thereof, and shall include, among others, asset allocation, criteria
for selection of fund managers, required income from the fund, and other investment
management threshold requirements.

Trust Income refers to the income, interest earnings, and other monetary benefits realized

by and accruing to the Trust Fund or any portion thereof.

k. Trust Principal refers to:

2

The initial Trust Principal which shall composed of the proceeds from the
redemption of the Converted SMC Series 1 Preferred Shares, dividends declared,
paid, or issued on the Converted SMC Series 1 Preferred Shared, and all income
or interest derived therefrom as of of the effectivity of this Act, and anmy other
cash Coconut Levy Asswt, that are held by the Bureau of Treaure (BTr) as a
special account in the general fund and as an escrow account, and cash held by
UCPB as administrator of the CIF;

Any and all proceeds of privatization of the Coco Levy Assets remitted thereto by
the Privatization and Management Office (PMO), and

Proceeds of privatization of any or all properties or assets conveyed by any
person, group, or entity to the Committee, from time to time, as provided in
Section 8 hereof.
Chapter II
Audit and Reconveyance of Coconut Levy Assets

Section 4. Accounting, Inventory and Audit and Inventory of Coconut Levy Assets. Upon the
effectivity of this Act, the PCGG shall conduct a complete accounting and inventory of the
Coconut Levy Assets as well as the investments, disbursement, and expenditures relating to the
coconut levy fund and submit a certified report to the BTr, the Commission on Audit (COA), and
the Office of the President (OP).

The COA shall audit the accounting and inventory of the Coconut Levy Assets
prepared and submitted by the PCGG for the purpose of, among others, determining
completeness of said inventory, the existence of the subject assets, establishing the
reasonableness of the asset valuation, and tracing of the flow of the coconut levy fund.


The COA shall submit to the PCGG its initial audit report, the reviewed Report on
the Accounting and Inventory of the Coconut Levy Assets, and the valuation as well as the
empirical basis and methodologies employed for said valuation, together with its observations
for revision and compliance, within ninety (90) days from submission of the Report on the
Accounting and Inventory of the Coconut Levy Assets. However, if necessary, further audit may
be undertaken after the initial audit.

The PCGG shall then incorporate the COA’s observations for revision and
compliance in the Report on the Accounting and Inventory of the Coconut Levy Assets and
submit the revised version to the COA within thirty (30) days, subject to reasonable time
extension, from the submission of the COA’s observations for revision and compliance.

After determining that the observations for revision and compliance were
incorporated in the revised Report on the Accounting and Inventory of the Coconut Levy Assets
by the PCGG, the COA shall submit the final version of the Report on the Accounting and
Inventory of the Coconut Levy Assets to the Committee, as well as the empirical basis and
methodologies employed for the valuation.

The Committee shall publish the same, within fifteen (15) days from its receipt of the final
version of the Report on the Accounting and Inventory of the Coconut Levy Assets, in at least
two (2) newspapers of national circulation.

Section 5. Reconveyance of Coconut Levy Assets. Immediately upon the effectivity of this Act,
the PCGG, the government representatives to the boards of sequestered/surrendered
corporations, and any government agency or person in possession, custody, control, or
administering any Coconut Levy Asset shall perform or cause the performance of the following:

1. Reconveyance of the title of such asset to the Republic of the Philippines;

2. Delivery of all stock certificates and other evidence of ownership to the BTr for
safekeeping; and

3. Deposit all cash assets in the Trust Fund.

Any provision of the law to the contrary notwithstanding, the BTr and the UCPB shall directly
remit the initial Trust Principal to the Trust Fund; Provided, That the BTr shall transfer the
remaining cash assets from the special account in the General Fund within a period of five (5)
years in equal amounts each year.

The COA shall conduct an audit to determine compliance with pertinent laws, rules, and
regulations on reconveyance of the Coconut Levy Assets to the government.

The COA shall also conduct the regular financial and compliance audit of the Coconut Levy
Assets, and submit the annual audit report thereon as mandated by the government auditing rules
and regulations, until said assets are privatized.


Chapter Ill
Coconut Farmers and Industry Development Trust Fund

Section 6. The Coconut Farmers and Industry Development Trust Fund. There is hereby
created a trust fund to be maintained for a period not to exceed thirty (30) years or until the fund
is fully utilized to be known as the Coconut Farmers and Industry Development Trust Fund,
hereinafter referred to as the Trust Fund, which shall consist of the Trust Principal and the Trust
Income. No portion of the Trust Fund shall be derived from the General Fund of the National
Government; Provided That, any unutilized balance in the Trust Fund after thirty (30) years shall
revert to the General Fund of the National Government, and shall be capitalized, managed,
utilized, and accounted for in the manner provided in this Act. Nothin; this Act shall be
understood to prevent or prohibit any person, group, or entity from conveying to the Committee
other properties and/or additional assets either for the use of the coconut industry or for the
purposes of privatization, in which case the proceeds of such privatization shall form part of the
‘Trust Fund.

Section 7. Purpose of the Trust Fund. The Trust Fund shall be used exclusively for the ultimate
benefit of coconut farmers and for the development of the coconut industry, as embodied in the
Coconut Farmers and Industry Development Plan to be prepared pursuant to Section 21 hereof.

Section 8. Capitalization of the Trust Fund. All assets and/or properties derived from all
coconut levy recovered assets; and all dividends, interest earnings, and incomes that are
available upon the effectivity of this Act shall form part of the initial capital of the Trust Fund.
‘The Trust Fund shall thereafter be augmented with all the proceeds of privatization/disposition
of the Coconut Levy Assets remitted directly thereto by the PMO in accordance with this Act,
including any and all forms of income, interests, earnings, yields, or any monetary
benefit derived therefrom prior to the privatization/disposition of these Coconut Levy Assets.

In order to ensure the enduring character of the Trust Fund, the Principal thereof shall be
augmented by grants, donations, and other lawful transfers by public or private entities. At the
end of the year, all unspent portion of the trust income for the year shall accrue to the Trust
Principal.

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

1. Ten Billion Pesos (PHP 10,000,000,000.00) of the initial trust principal, which
shall be known as the Jumpstart Fund, may be used within two (2) years
commencing from the approval of the plan by the President to jumpstart the
development of the industry;

2. All disbursements shall only be made on the basis of the funding requirement of
the program, activity, or project by the Committee as provided in the Coconut
Farmers and Industry Development Plan; Provided, That an annual allocation of


at least Five Billion Pesos shall be released for the programs and projects
provided under this Act; and

3. The ceiling for expenses of the Committee for the administration, monitoring,
evaluation, information services, and other necessary activities for the effective
performance of its functions under this Act shall be provided in the Implementing
Rules and Regulations under Section 26 of this Act.

All releases from the Trust Fund approved by the Committee shall be released directly to the
implementing agencies; Provided That, coconut productivity and developmental programs and
projects shall be implemented by the Philippine Coconut Authority (PCA) created under PD No.
232 (s. 1973), as amended by PD No. 1468 (s. 1978). Other coconut productivity and
developmental programs and projects implemented by other agencies shall be closely
coordinated with the PCA.

Disbursements or expenditures by the concerned implementing agencies in violation of the
purpose of the Trust Fund shall be void and shall subject the erring officials and employees to
disciplinary actions in accordance with existing laws, and to appropriate criminal action under
existing penal laws. Disbursements of the funds should be done in accordance with the
Government Accounting Manual and all other related laws, rules, and regulations.

Section 10. Designation of the Bureau of the Treasury as Depository of the Trust Fund. Any
law to the contrary notwithstanding, the BTr is hereby designated as the depository of the Trust
Fund, which shall:

1. Hold and account the Trust Fund in the manner set forth by the Committee;

2. Release funds directly to the implementing agencies upon the instruction of the
Committee;

3. When so appointed by the Committee, act as a fund manager of the investments of
the Trust Fund with the authority and accountability as that of a private fund
manager; and

4. Perform other tasks as may be authorized by the Committee.

The Committee may designate alternative depository banks which shall perform the same
functions as that of the BTr.

Chapter IV
Coconut Farmers and Industry Development and Industry Trust Fund Committee

Section 11. Creation of the Coconut Farmers and Industry Development Trust Fund
Committee. The Coconut Farmers and Industry Development Trust Fund Committee is hereby
created under the OP.


‘The Committee shall have the following powers and functions:

z

10.

Coordinate and monitor the implementation of the Coconut Farmers and Industry
Development Plan;

‘Approve any allowable disbursement out of the Trust Fund pursuant to Section 14
of this Act;

Formulate the Investment Guidelines pursuant to the allowable investment stated in
Section 28 of this Act;

Appoint a fund manager, if necessary, to handle the investment of the Trust
Principal;
Identify the Coconut Levy Assets that will be privatized, retained, or abolished and
submit its recommendation to the President for approval;

Approve the marketing and disposition program for the Coconut Levy Assets
approved for privatization;

After obtaining the approval of the President, authorize the sale and other mode of
privatization of Coconut Levy Assets approved for privatization;

Authorize the rehabilitation of Coconut Levy Assets approved for privatization
pending actual disposition;

Submit reports and recommendations to the President in connection with its
functions under this Act; and

Exercise such other incidental powers and functions as may be necessary to attain
the objectives of this Act.

The PCA shall provide Secretariat support to the Committee.

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

hz

2

Six (6) representatives from the government who shall be serving in ex officio
capacities:

a. Secretary of the Department of Agriculture (DA), as Chairperson;

b. Secretary of the Department of Finance (DOF), as Vice Chairperson;

c. Secretary of the Department of Trade and Industry (DTI);

d. Secretary of the National Economic and Development Authority (NEDA) ;

e. Administrator of the PCA; and

f. A representative from the Office of the Executive Secretary.

‘Three (3) representatives from the coconut farmers’ organizations, one (1) from
Luzon, one (1) from Visayas, and one (1) from Mindanao, who have considerable
experience, substantial membership, and reputable track records.


3. Two (2) representatives from the coconut industry sector who have considerable
experience and reputable track records.

The nominees of the coconut farmers’ organizations shall be validated and shortlisted by the
PCA. The list of nominees, which shall number at least three (3) per island group, shall be
submitted to the President not later than thirty (30) days following the effectivity of this Act. The
representatives of the coconut industry sector shall be appointed by the President from a list of
nominees, which shall number at least six (6), submitted by the PCA.

‘The government representatives in the Committee shall serve only during their respective terms
in office. The representatives from the coconut farmers’ organizations and the coconut industry
sector shall each hold a term of three (3) years, unless sooner removed for cause, and may be
reappointed once. Any of the representatives shall continue to hold office until their successor is
appointed; Provided That, any appointment to fill a vacancy in the Committee shall be only for
the unexpired term.

Section 13. Ex Officio Alternates. The ex officio members of the Committee may designate their
respective permanent alternates who shall be the officials next-in-rank to them and their acts
shall be considered acts of their principals.

Section 14. Meetings of the Committee. The Committee shall meet once a month, or as often as
deemed necessary and expedient to discharge its responsibilities. The presence of at least a
majority of the members present at a meeting at which a quorum exists shall be adequate for any
decision by the Committee; Provided, That the approval of at least a majority of the members of
the Committee shall be required on matters involving the following:

1. Any single disbursement of funds involving more than Fifty Million Pesos (Php
50,000,000.00);

2. Any proposed investment involving more than One Hundred Million Pesos (Php
100,000,000.00); and

3. All dispositions or privatization proposals.

Provided further, That the disbursements requiring the approval of at least a majority
of the members of the Committee may be subject to the President's disallowance.

‘The Chairperson, if unavailable, may designate the Vice Chairperson to convene the
Committee and preside over the Committee's meeting on behalf of the Chairperson.

Section 15. Compensation of the Members of the Committee. The members of the Committee
may be entitled to per diems and reimbursable expenses, in accordance with the COA rules and
regulations.

Section 16. Obligations of the Members of the Committee. The members of the Committee
shall act with due care, diligence, skill, and good faith in all its dealings with the Trust Fund and


the Coconut Levy Assets. They shall avoid conflicts of interest and declare before the
Committee any interest they may have in any particular matter.

Where a member of the Committee receives any profit or benefit by virtue of his
office, including acquiring shares in corporations that form part of the Coconut Levy Assets,
using the Coconut Levy Assets for one’ s benefit, receiving commission on contracts from the
Coconut Levy Assets, or taking advantage of corporate opportunities involving the Coconut
Levy Assets, all such profits or benefits shall be returned to the Trust Fund without prejudice to
any administrative, civil, or criminal action against such member. This provision shall be
applicable notwithstanding the fact that such member of the Committee used one's own funds in
the venture.

‘The Committee shall recommend to the President the removal and replacement of the member
who performs such acts.

Section 17. Executive Director of the Committee. The administrator of the PCA shall be
appointed as executive Director of the Committee.

The Executive Director shall have the following powers and functions:

1. Execute policies and administer the programs approved or promulgated by the
Committee;

2. Monitor the progress of the implementation of the Plan and submit periodic reports
to the Committee;

3. 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;

4. Keep and maintain official records and reports of the proceedings of the Committee;
5. Administer oaths in all matters falling within the jurisdiction of the Committee; and
6. Exercise such other duties as may be vested by the Committee that are consistent

with the provisions of this Act.

Section 18. Cooperation with the Committee. The Committee may also call upon any
department, bureau, office, agency, and instrumentality of the Government, including
Government-Owned or -Controlled Corporations (GOCCs), for any assistance it may need in the
discharge of its functions and responsibilities as well as in the implementation of its programs
and projects.

Section 19. Accounting and Auditing. The Committee shall maintain records and accounts of all
investments, income, receipts, disbursements, and other transactions relating to the management,
administration, and disposition of the Trust Fund. These records and accounts shall be


maintained in accordance with existing accounting and auditing laws, rules, and regulations. The
Trust Fund shall be audited by the COA.

Section 20. Legal Counsel. The Solicitor-General shall be the ex officio
counsel of the Committee on legal matters.

Chapter V
Coconut Farmers and Industry Development Plan

Section 21. Preparation of the Coconut Farmers and Industry Development Plan. An Ad Hoc
Committee is hereby created to be composed of technical officials from the Department of
Agriculture, the Department of Agrarian Reform, the Department of the Interior and Local
Government, the Department of Finance, the Department of Public Works and Highways, the
Department of Science and Technology, the Department of Social Welfare and Development,
Department of Health, the Department of Trade and Industry, the Department of Budget and
Management, the National Economic and Development Authority, the National Anti-Poverty
Commission, the Technical Education and Skills Development Authority, the Land Bank of the
Philippines, and the Development Bank of the Philippines.

In addition, twelve (12) representatives from the coconut farmers’ organizations composed of
four (4) from Luzon, four (4) from Visayas, and four (4) from Mindanao; and four (4)
representatives from the different coconut industry sectors who all have considerable experience,
substantial membership, and reputable track records, shall also be members of the Ad Hoc
Committee.

‘The nomination process of the representatives from the coconut farmers organizations and the
different coconut industry sectors shall be the same as that in Chapter IV, Section 12 of this Act;
Provided, That, the list of nominees from the coconut farmers’ organizations shall number at
least twelve (12) per island group; Provided, also, that eight (8) of the twelve (12)
representatives from the Coconut Farmers’ Organizations must not have more than five (5)
hectares of coconut farm landholding; Provided Further, That, the list of nominees from the
coconut industry sector shall number at least twelve (12).

The Administrator of the PCA shall act as the Ad Hoc Committee's Chairperson.

The members of the Ad Hoc Committee shall be compensated in the same manner
as that of the Committee under Chapter IV, Section 15 of this Act.

The Ad Hoc Committee, in consultation with coconut farmers’ organizations,
industry associations, civil society organizations, academe, concerned government agencies, and
other stakeholders in the coconut industry shall indicate in an integrated coconut industry
strategy the policies for the development and rehabilitation of the coconut industry. It shall
prepare every five (5) years, or as determined by the Committee, a medium term plan of
programs, activities, and projects, which shall be funded out of the Trust Fund and which shall
be known as the Coconut Farmers and Industry Development Plan, hereinafter referred to as the


Plan. The Plan shall be consistent with the Philippine Development Plan and shall be subject to
mandatory review every year.

‘The Administrator of the PCA shall submit an annual report to the Committee on
the status of the implementation of the Plan and its corresponding programs/projects.

‘The PCA shall commission an independent study on the third year, or any other
date as may be determined by the Committee, to assess the impact of the programs and projects
in the Plan. The results of the independent study shall be one of the bases to update the Plan. The
conduct of the study shall be chargeable to the regular funds of the PCA.

In the formulation of the Plan, the Ad Hoc Committee shall be guided by the
following objectives:

1. Increase in the income of coconut farmers and increase coconut productivity
including intercropping and livestock-raising;

xv

|. Establishment of coconut-based enterprises including integrated processing of
coconut products and downstream products;

itation and modernization of the coconut industry towards global
competitiveness;

4. Provision of timely and critical support to coconut farmers organization; and

5. Establishment of social protection programs that directly benefit the coconut
farmers and farm workers, in case these social protection programs are not funded
by an appropriations law or any other special laws, or where funding is
insufficient. The social protection programs shall include: (1) social services such
as life, medical, and accident insurance coverage of the coconut farmers and farm
workers; (2) scholarships for the benefit of the deserving descendants of the
coconut farmers and farm workers; and (3) livelihood programs.

The Plan shall provide an indicative funding requirement or allocation for the
implementation of any and all of the programs and projects, which funding or allocation shall be
itemized or broken down on a project-to-project basis; Provided, That (a) for projects which are
recurring, or to be implemented on a regular basis, the allocation shall indicate the annual fund
that may be required to implement the project; and (b) for projects that are to be implemented or
concluded within a period of time, the allocation shall indicate the total fund that may be
required for the implementation of the whole project, itemized according to the phases or stages
of the project. The Plan shall also include the contribution of the regular budget of the PCA.

Within ninety (90) days from the appointment of all farmer-representatives and the
industry representatives, the Plan shall be submitted by the Ad Hoc Committee to the Committee
which shall, in turn, submit the Plan to the President, as endorsed by the Economic Development
Cluster, for approval. Immediately upon its approval, the Plan shall be returned to the Committee
for the disbursement of funds in accordance with the provisions of this Act. Any amendment to


the Plan shall require the approval of the President, as endorsed by the Economic Development
Cluster.

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

Chapter VI
Privatization of the Coconut Levy Assets

Section 22. Privatization of Coconut Levy Assets. Privatization of Coconut Levy Assets.
Pursuant to the national policy on the efficient and transparent privatization of government assets
(including GOCCs) which are unnecessary or inappropriate for the government sector to
maintain:

1. The Governance Commission for Government-Owned or -Controlled Corporations
shall determine whether it is to the best interest of the Government to privatize
any non-cash Coco Levy Asset and recommend to the President the privatization
and the mode of the divestment, taking into account the need to generate
maximum cash recovery and the implications of such divestment on the coconut
industry.

2. The PMO shall be the disposition entity for non-cash Coconut Levy Assets which
shall have been approved for divestment by the President and shall expeditiously
sell, alienate, or dispose of the same upon securing the favorable recommendation
of the Privatization Council pursuant to EO No. 323 (s. 2000) and other relevant
laws, orders, rules, and regulations, and the prior approval of the Committee. In
the discharge of this additional mandate, the PMO is hereby empowered to
implement the actual marketing/disposition program for the non-cash Coconut
Levy Assets, to execute and deliver, on behalf of the Government, the deeds of
sale, contracts, and other instruments as may be necessary or appropriate to
convey title to such assets to take possession of and conserve the non-cash Coco
Levy Assets transferred to it, and engage external expertise as may be necessary
in the fulfillment of its tasks under this Act. Any sale and other mode of
privatization shall not be considered final unless favorably recommended by the
Privatization Council and approved by the Committee.

3. The PMO shall, within three (3) months from the closure of its books at the end of
each fiscal year, submit a comprehensive annual report to the President, through
the Privatization Council, on the status of its privatization efforts and its
disposition program for the non-cash Coco Levy Assets, which report shall
include a description of the assets privatized and disposed of, the purchasers, the
consideration received, and the agreed terms of payment.


Section 23. Proceeds from Privatization. Al\ proceeds and receipts or revenues arising out of or
in connection with the privatization of the Coconut Levy Assets shall be deposited to the Trust
Fund, after deducting reasonable expenses actually, directly, and exclusively incurred by the
PMO in connection with such privatization as stated under Section 22 hereof.

Section 24. Allowable Investment. The Committee shall manage the Trust Principal with the
skill, care, prudence, and diligence necessary under the circumstances that a prudent person
acting in like capacity and familiar with such matters would exercise in the conduct of an
enterprise of a like character with similar aims. Pursuant thereto and in line with the basic
principles of safety, growth, and liquidity, the Trust Principal shall only be invested in any or all
of the following:

1. Bonds, securities, securities, promissory notes, or other evidence of indebtedness of
the Government of the Philippines, or in bonds, securities, promissory notes, and
other evidence of indebtedness to which full faith, credit, and unconditional
guarantee of the Republic of the Philippines is pledged;

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

e

Deposits and loans and/or investments in any domestic bank doing business in the
Philippines and in good standing with the Bangko Sentral ng Pilipinas; Provided,
That in case of such deposits, these shall not exceed at any time the unimpaired
capital and surplus or total private deposits of the depository bank, whichever is
smaller; Provided Further, That the bank shall have been first designated as a
depository for this purpose by the Monetary Board of the Bangko Sentral ng
Pilipinas; Provided Finally, That such investments shall be subject to a ceiling to be
fixed by the Committee in the implementing rules and regulations.

Chapter VII
Final Provisions

Section 25. Suppletory Application of Republic Act No. 10149. In the interpretation of the
provisions of this Act, the provisions of RA No. 10149, otherwise known as the “GOCC
Governance Act of 2011,” shall apply suppletorily.

Section 26. Implementing Rules and Regulations. Within thirty (30) days from the date of the
constitution of the Committee, it shall formulate and promulgate the rules and regulations for the
proper implementation of this Act, in consultation with the PMO.

Section 27. Congressional Oversight. The Congressional Oversight Committee on Agricultural
and Fisheries Modernization (COCAFM) shall exercise oversight functions over the
implementation of this Act.


Section 28. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected by such declaration shall remain in full force
and effect.

Section 29. Repealing Clause. All laws, executive and administrative orders, rules and
regulations inconsistent with this Act are hereby repealed or amended accordingly.

Section 30. Effectivity Clause. This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in two (2) newspaper of general circulation.