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FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
~R~ 13 AIC 2 1  
Introduced by Senator EDGARDO J. ANGARA 
EXPLANATORY NOTE 
The coconut industry is the country's oldest and most strategic industry, 
contributing 1.14% o f ,  the total Gross Domestic Product amounting to 
US$ 760 million. The Philippines is a world leader in coconut exports, 
dominating 59% ofthe global market. 
Statistics from Philippine Coconut Authority (PCA) indicated that areas 
planted with coconut covers 3.258 M hectares equivalent to 27% of total 
agricultural land. Sixty-eight (68) out of seventy-nine (79) provinces are 
considered coconut areas, representing 1,195 coconut municipalities. 
Moreover, coconut products are still the number one agricultural export 
earner of our country. More than twenty million Filipinos all over the 
country depend on the planting and harvesting of coconuts for their living. 
Due to the recent glut of palm oil in the world market and typhoons that hit 
the country last year, our coconut farmers are in desperate straits. 
As of October 2008, coconut oil prices fell to new record low within the last 
two (2) years. According to PCA, coconut oil and copra prices were greatly 
affected by the overall weak tone in vegetable oils, lingering uncertainties in 
global financial markets, steep decline in cmde mineral oil prices, and lower 
Asian vegetable oils markets. 
In Southern Tagalog, copra prices went down from Php 28.25 per kg in 2007 
to Php 24.75 per kg in 2008. This rapid and steep decline in prices is worse 
in the Visayas and Mindanao regions, averaging more than Php 7.00 of 
decline within a year. Given this stark situation, farmers are no longer 
harvesting coconuts. More farmers cut trees and sell them as lumber, instead 
of harvesting the coconut. 
If this low copra selling price and production continues, the coconut industry 
will collapse. 


This calamity requires emergency action, in order to provide immediate and 
long-term relief to coconut farmers suffering from the effects of abnormally 
low prices of copra and other coconut products. 
Thus, this bill seeks to create a corporate body known as the Philippine 
Coconut Industry Development Authority (PHILCIDA) in order to promote 
rapid, steady and continuous integrated development and growth of the 
coconut industry. In the end view of ensuring that the coconut farmers, farm 
workers, processors, lessees and tillers, and their families, shall become 
direct participants in, and beneficiaries of, such development and growth 
thereby increasing their income and uplifting their quality of life. 
Approval of this bill is earnestly sought. 
EDGARD J. ANGARA 
Senator 


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;nFfg;.< 
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,.~ 
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.CI.,,‘<.i; ’ :i,t’i 
FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
~~~ 
13 Aic :z1 
I 
S E N A T E  
Senate Bill No. 2 8 7 
Introduced by Senator EDGARDO J. ANGARA 
AN ACT 
REVITALIZING THE COCONUT INDUSTRY, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled: 
ARTICLE I 
GENERAL PROVISIONS 
SECTION 1. 
Short Title. - This Act shall be known as “The 
Coconut Industry Development Act of 2008. ” 
SEC. 2. 
Statement of Policy. - It is the policy of the State to 
recognize the essential role of coconut as a strategic, indigenous, 
replenishable and renewable source of livelihood for a great number of 
people. 
Towards this end, the State shall promote the rapid, steady and 
continuous integrated development and growth of the coconut industry in all 
its aspects and ensure that the coconut farmers, farm workers, processors, 
lessees and tillers, and their families, shall become direct participants in, and 
beneficiaries of, such: development and growth thereby increasing their 
income and uplifting their quality of life. 
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SEC. 3. Goals and Objectives. - Pursuant to the above-mentioned 
policy, the effort of government shall be directed towards the following goals 
and objectives: 
a) Promote the steady, accelerated and orderly development of the 
coconut industry consistent with the agrarian reform policy of the 
government; 
b) Develop and establish the coconut based farming systems including 
but not limited to the establishment of model coconut f m s ;  
. .  
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 of the country as a major producer and supplier 
of said products, by * establishing national standards acceptable in the 
international market 
e) To increase production by expanding the planting and replanting 
program of coconut trees in strategic areas identified as having the most 
potential; 
f) Conduct scientific researches and investigations in all areas 
pertaining to agricultural, industrial, marketing and socio-economic aspect 
of the coconut industry and encourage the participation of small farm 
holders in research and technology; 
g) Encourage and promote the organization of coconut farmers 
cooperatives, associations, and organizations and provide them credit and 
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financing schemes; 
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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; and 
i) Coordinate and integrate all efforts of various agencies of 
government and provide general direction for the steady and orderly 
development of the industry. 
ARTICLE I1 
PHILIPPINE COCONUT INDUSTRY DEVELOPMENT 
AUTHORITY 
SEC. 4. 
Philippine Coconut Industry Development Authority. - 
To implement the policy and objectives of this Act, there is hereby created 
and established a corporate body lcnown as the Philippine Coconut Industry 
Development Authority (PHILCIDA), hereinafter referred to as the 
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Authority. 
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following powers and functions: 
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SEC. 5 .  Powers and Functions. - The Authority shall exercise the 
a) 
Formulate and adopt a general program of development geared 
towards increased farm productivity, through planting or replanting of 
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suitable seedling varieties, rehabilitation and fertilization of coconut, 
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integrated coconut-based farming systems and product processing, and 
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whenever necessary, the construction of related support and infrastructure 
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facilities. For this purpose, the Authority shall adopt a special program to 
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maximize the yield of small coconut farmers and their farm families 
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particularly those farms covered by the agrarian reform program of the 
government; 
b) 
Undertake scientific researches and investigations on crop and 
varietal improvement, pests and diseases, agronomy and mineral nutrition, 
coconut wood utilization, virology and biochemistry and epidemiology of 
cadang-cadang, and such other similar studies on varietal and crop 
improvement of general or local suitability; 
c) 
Undertake scientific researches and investigations on food, non- 
food products and by-products including bio-diesel, directly or in 
collaboration with other public agencies or the private sector; 
d) Establish, maintain and operate such number of research centers 
and experiment stations, including laboratories, seed gardens, nurseries, pilot 
farms and industrial facilities as may be necessary to undertake extensive 
research in coconut pests and diseases, improvement of copra, manufacture 
of coconut products and by-products and the greater utilization of the 
coconut for traditional and non-traditional uses; 
e) 
Purchase or fabricate such machineries, material, equipment and 
supplies as may be necessary to execute successhliy such researches, 
investigations and experimental work as provided under this Act on its own 
or in partnership with other agencies; 
f) 
Conduct intensive studies and data research, establish and 
maintain a database of primary, accurate and reliable information on coconut 
culture, production, pricing capacity, marketing, inventories as well as 
scientific thesis and treaties in coordination with other government offices, 
the private sector and international agencies and bodies; 
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g) 
technologies; 
Promote the utilization and integration of in-house developed 
h) 
Construct, invest, establish and operate integrated coconut 
centrals, processing plants and integrated processing mills and other support 
facilities in aid of its research and development function; 
i) 
Create subsidiaries or enter into partnerships or joint ventures 
with any public or private foreign or local entity, natural or juridical, and 
acquire, own or hold shares of stock or interest therein for the purpose of 
fully utilizing the commercial value of pioneer and new technology 
generated in the industry, or of financing the manufacture, on commercial 
scale, of coconut trees: Provided, That such subsidiary, partnership, joint 
venture, which the Authority is authorized to create, shall be governed by 
the provisions of general laws applicable to corporations and such entities: 
Provided, further, That after such partnership, subsidiary, or joint venture 
with private Filipino citizens or entities authorized to be created shall have 
become fully viable for commercial operation, and the Authority has 
recovered its investments or contributions the Authority shall immediately 
divest itself of its interest over the partnership, subsidiary, or joint venture in 
favor or any private person or entity. For purposes of this paragraph, the 
Authority shall make studies and investigations of the enterprises and 
projects for which the loans, contributions and subscriptions to the capital of 
the enterprise or investments mentioned are needed, and determine the 
advisability of financing the same; 
j) 
Promote, encourage and help coconut planters, farmers, 
processors and workers organize themselves into associations and 
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cooperatives to give them greater control in the marketing of their products 
and to help them obtain more credit facilities to register and accredit such 
associations and cooperatives for purposes of participation in the 
developmental programs of the Authority: Provided, That the Authority 
shall not directly or indirectly influence the farmers in the exercise of their 
choice or selection of candidates or leaders in the organizations; 
k) 
Render training, extension service programs and disseminate 
information to coconut farmers, farm workers and processors relative to 
production technology,, marketing systems and other technical skills and 
values, attitude formation and socio-economic development strategies; 
1) 
Expand and develop the domestic and foreign market for coconut 
products and by-products; 
m) Regulate the marketing and the exportation of coconut products 
and by-products to conform with quality or food standards recognized by 
both the domestic and international market; 
n) Take samplings and conduct examination of any copra product to 
measure and determine its moisture content as required in the trade; conduct 
laboratory analysis to determine the chemical characteristics of coconut 
products and by-products including the presence of toxin and other 
contaminations 
. .  
and issue the necessary commodity clearance and export 
permit: Provided, That the Authority may withhold the issuance of such 
clearance or permit, or suspend or cancel any clearance or permit already 
issued in case of violation by the holder of any provision of this Act or rules 
and regulations duly promulgated by the Authority; 
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0) Require exporters, traders, millers, refiners, desiccators, oleo- 
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chemical processor, other manufacturers and end-users of coconut products 
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and by-products to submit periodic reports of production, receipts of 
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deliveries or purchases or both, sales, inventory, contracts and such other 
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data the Authority may deem necessary to properly and effectively promote 
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the development of the industry. All information given to the Authority by 
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the individual firms shall be confidential in nature and could not be used 
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against them; 
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Undertake, initiate or participate in trade missions to obtain better 
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preferential trading arrangements with importing countries, and enter or 
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otherwise participate in behalf of the coconut trading industry in all 
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agreements, arrangements, missions or conventions with any foreign 
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government or entity with respect to trading relations, market quotas, tariff 
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and non-tariff barriers and such other matters affecting the export of coconut 
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products and by-products; 
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Provide, in coordination with the private sector, a system of 
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accreditation of association of traders, millers, desiccators, farmers, 
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To assist coconut farmers, organizations in marketing their 
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s) 
Assist coconut farmers organizations in establishing farmer- 
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p) 
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exporters and end-users of coconut products; 
products locally or abroad when the need arises; 
owned bonded warehouses and processing facilities; 
t) 
Impose and collect all fees, charges, assessments and imposts 
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including interests and surcharges authorized under this Act or its 


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implementing rules and regulations and disburse funds generated by the 
Authority from its operations to carry out its functions; 
u) 
Grant or accept and receive donations of any kind for any 
purpose not inconsistent with the purposes of this Act; 
v) 
Enter into, make and execute contracts of any kind as may be 
necessary or incidental to the attainment of its purposes; 
w) Promulgate Its own rules for investigation and procedure to 
investigate complaints involving violations of this Act or any rules and 
regulations issued pursuant thereto, or any such other laws, rules and orders 
affecting the coconut industry; attribute or settle conflicting claims or render 
the appropriate decision or award including the imposition and 
administrative penalty of suspension of license, registration, permit or 
clearance issued in accordance with this Act; 
x) Order the closure of any mill, refinery, processing firm, copra 
warehouse or any place or building where coconut products are stored or to 
intercept and seize any vehicle or ship or vessel carrying or transporting 
coconut products where there is reasonable ground to believe that the owner, 
possessor ar .person or persons in control of such place, building, vehicles, 
ship or vessel, of such products have violated the provisions of this Act or 
any rules and regulations promulgated thereto in a manner that is prejudicial 
and detrimental to the coconut industry, or the consuming public; 
y) 
Develop and recommend measures and methodology quarantine 
for coconut products and by-products and to impose such restrictions in the 
transport movement or handling of the same in accordance with such 
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standards and quarantine procedure determined by the Authority; 
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z) 
Call upon or deputize any official or law enforcement agency of 
the government as may be necessary to assist the Authority in carrying out 
and enforcing its fbctions under this Act; 
aa) Obtain loans and grants from local and foreign sources to finance 
or support the operations of the Authorityunder this Act; 
bb) Issue subpoena or subpoena duces tecum to summon witnesses to 
appear in any investigation or hearing conducted by it; and 
cc) Exercise all powers and functions necessary or incidental to 
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attain the national policy and objectives under this Act. 
ARTICLE I11 
BOARD OF DIRECTORS AND OTHER PERSONNEL 
SEC. 6. 
Board of Directors. - The corporate powers and duties of 
the Authority shall be vested and exercised by a Board of Directors, 
hereinafter referred to as the Board, composed of eleven (1 1) members to be 
appointed by the President, five (5) of whom shall represent the coconut 
farmer sector, the trading and processing sector and the science and research 
sector. The chairman shall be designated by the President from among the 
members appointed. 
SEC. 7. 
Tenure. - The members of the Board shall hold office for 
a term of six (6) years or until their successors shall have been appointed and 
qualified or unless sooper removed for cause. The first members of the 
Board to be appointed under this Act shail hold office as follows: Three (3) 
members for two years, Four (4) members for four years and Four (4) 
members, inclusive of the chairman, for six years. Appointment to vacant 
positions shall only be for the unexpired term of the predecessor. 
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SEC. 8. 
Powers and Functions. - The Board shall exercise the 
following powers and functions: 
a) Formulate and adopt a national government plan for the coconut 
industry and promulgate the necessary rules and regulations, policies and 
measures in support of the plan; 
b) Prescribe the organization of the Authority and fix the 
compensation of all its personnel in accordance with law and determine and 
grant such allowances and incentives as it may deem proper with the rates to 
be approved by the Department of Budget and Management; 
c) Reorganize the Authority when there is a need to institute reforms 
in the organizational structure to effect economy and promote efficiency. 
For this purpose, the Board may group, coordinate, consolidate or integrate 
positions and create, classify, split and abolish positions; 
d) Adopt, promulgate or amend, revise, modify or repeal rules and 
regulations necessary to implement the provisions of this Act; 
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e) Appoint the administrator and deputy administrators and other 
officers upon the recommendation of the chairman and chief executive 
officer; 
fl Approve the annual budget and such supplemental budgets of the 
Authority; 
g) Review, revise, modify, increase or decrease the fees and 
assessment authorized to be collected in this Act as market condition may 
warrant taking into account public interest, cost of services and the prices of 
coconut products and by-products; and 
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h) Perform such other duties as may be assigned to it by the 
President of the Philippines. 
SEC. 9. 
Quorum and Meeting. - The Board shall meet as often 
as the exigency of the service may demand. The presence of at least six (6) 
members shall constitute a quorum and the vote of a majority of the 
members present constituting a quorum shall be necessary for the adoption 
of any rule, resolution, decision or any other act of the Board. 
SEC. 10. 
Compensation. - The members of the Board may receive 
per diems for every meeting actually attended at such amount to be fixed by 
the Board but not to exceed Two Thousand Pesos (02,000.00) per board 
meeting: Pvovided, That it shall not exceed four (4) board meetings during 
any month for each member. 
SEC. 11. 
Of’j5cers and Personnel. - The chairman of the Board, 
who shall have the rank and privileges of a department secretary, shall be the 
head and chief executive officer of the Authority. 
Upon his 
recommendation, the Board shall appoint an administrator of the Authority 
who shall be the chief operating officer, with the rank and privileges of a 
department undersecretary. The administrator shall have the responsibility 
of managing the day-today affairs and operations of the Authority subject to 
the supervision and control of the chief executive officer and in accordance 
with the policies established by the Board. 
There shall be such sufficient number of deputy administrators as the 
Board may prescribe to assist the administrator who shall be appointed or 
removed for cause by the Board. 
The administrator and the deputy 


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administrator may be delegated with such powers and duties as the chairman 
and chief executive officer may prescribe from time to time. 
SEC. 12. 
Application of the Civil Service Law. - All officers and 
employees of the Authority shall be subject to the civil service laws, rules 
and regulations, and all selection and appointments shall be based on merit 
and fitness. 
ARTICLE IV 
MANAGEMENT AND OPERATIONS 
Management. - The management of the corporate affairs 
of the Authority shall be the responsibility of the chief executive officer with 
the assistance of the administrator, deputy administrator and such other 
officers as may be determined by the Board. 
SEC. 13. 
SEC. . .  
14. 
Duties of the Chief Executive Officer. - The chief 
executive officer shall exercise the following duties and responsibilities: 
a) 
Initiate and develop corporate policies, programs and objectives 
for approval of the Board; 
b) Establish general administrative and operating policies; 
c) Appoint a11 other non-officer employees of the Authority; 
d) Execute for and in behalf of the Authority contracts, obligations 
and agreements which are required to be approved by the Board; 
e) Appoint technical consultants; 
f) Discipline officers and employees in accordance with civil service 
laws, rules and regulations; 
g) Submit the internal organizational structure of the Authority, 
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financial statements and other reports as may be required by the Board; 
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h) Delegate or assign any of the foregoing powers and duties except 
the power to appoint any official in the hierarchy of authority and always 
subject to his supervision and control; and 
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i) Exercise such other powers and duties as may be delegated by the 
Board. 
SEC. 15. 
Corporate Planning Office. - To assist the chief 
executive officer in the formulation of general plans and programs, 
promulgation of policies, the monitoring and evaluation of industry and 
corporate activities, there shall be a Corporate Planning Office which shall 
serve as the technical arm under the office of the chairman, having the status 
of a branch which shall be headed by an executive director with a rank of a 
deputy administrator. The executive director shall be co-terminous with the 
chairman and with three (3) permanent managers performing the functions 
of plans and programs development, policy research and analysis, and 
monitoring and evaluation. 
SEC. 16. 
Duties of the Chief Operating Officer. - The chief 
operating officer shall exercise the following duties and responsibilities: 
a) Ensure that the administrative and operating policies are carried 
out under the direction and control of the chairman and chief executive 
officer; 
b) Prepare and submit to the chief executive officer, within sixty (60) 
days before the beginning of each calendar year, an annual operational 
budget of the Authority; and 
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c) Monitor operational problems, adopt remedial measures and 
submit policy proposals to improve the day-to-day affairs and operations of 
the Authority. 
SEC. 17. 
Branch Offices. - The Authority shall have the following 
branches: 
a) Agricultural Research and Development Branch for the execution 
and implementation of policies, plans and programs relating to advancement 
in industrialization and development; 
b) Industrial Research and Development Branch for the execution 
and implementation of policies, plans and programs relating to advancement 
in industrialization and development for the coconut products and by- 
products, particularly on food, oleo-chemicals, fuels and lubricants; 
c) Market Research and Development Branch for the formulation 
and implementation of policies, plans and programs relating to domestic and 
international markets development affecting the coconut industry including 
the enforcement of market rules and regulations formulated by the 
Authority; 
d) Field Operations Branch for execution and implementation of 
policies, plans and programs relating to production, marketing and 
processing activities; 
e) Administration and Finance Branch for developing and 
maintaining the delivery of all necessary administrative, financial and 
manpower support for the whole operations of the Authority; and 
f) Development Information and Communication Branch for the 
execution and implementation of policies, plans and programs relating to 
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development. information and communication as well as other socio- 
economic research and development. 
Every branch shall be headed by a deputy administrator or such 
qualified acting or officer in charge as may be designated by the chief 
executive officer. 
SEC. 18. 
Regional OfJices. - The Authority shall establish and 
organize regional offices in accordance with the political and administrative 
regions in the country and such number of provincial or district offices, or 
both, that will assist the Authority in the full implementation of this Act. 
SEC. 19. 
Departments, Divisions and Units. - There shall be, 
under the office of the chairman and chief executive officer, an administrator 
and deputy administrators of specialized departments, divisions, units or 
offices as may be necessary to provide the needed administrative, technical 
and specialized services, as may be deemed proper and expedient by the 
Board, which shall be headed by a person with the required specialization or 
expertise. 
ARTICLE V 
SOURCES OF FUNDING 
. .  
SEC. 20. 
Coconut Development Fund. - There is hereby 
established a National Coconut Development Fund, herein referred to as the 
“Coconut Fund,” to be administered by the Authority for the purpose of 
financing the growth and development of the coconut industry, including 
human resource development, training of farmers and other related activities. 
As 
initial 
capitalization, the 
sum of 
ONE 
BILLION 
PESOS 
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(P1,000,000,000.00) is hereby appropriated to be made available within one 
(1) year from the approval of this Act. 
Thereafter, a continuing appropriation is hereby authorized to be 
appropriated in the amount of not less than One Billion Pesos of the total 
industry export performance of the immediately preceding year as reported 
by the Banglto Sentral ng Pilipinas and to be deposited in a trust account 
with an authorized government bank as may be determined by the Authority. 
The amount shall be released annually by the said bank to the Authority 
upon presentation of its approved budget and programs. 
SEC. 21. 
Special Corporate Support Fund. - The Authority shall 
have a Special Corporate Support Fund for its administrative operating 
expenses to be funded from the following sources: 
a) An assessment of twelve centavos (P0.12) per kilogram of copra 
or husked nuts, or their equivalent in other coconut products, delivered to 
and purchased by traders, exporters, millers, desiccators and other end-users 
of coconut products: Provided, That such assessment shall be collected by 
the Authority and deposited with any government depository bank which 
shall be used exclusively for the operational, supplemental Qr special budget 
duly approved by the Board: Provided, further, That no portion of the fund 
nor any unexpended balance thereof, including its earnings, shall be 
transferred to the general or any special funds of the government, but shall 
remain as corporate fimds to be used in accordance with the authorized 
purposes; and 
b) The proceeds ofregulatory and service fees or charges as may be 
deiemincd .and imposed by the Board in the implementation of the 
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provisions of this Act to cover reasonable costs of service in the issuance of 
licenses, certificates, export permits prior commodity clearances including 
other incomes to be withdrawn in accordance with the immediately 
preceding paragraph. Such regulatory and service fees or charges shall be 
exempted from the provisions of Presidential Decree No. 1234, entitled 
“Instituting A Procedure For The Management Of Special And Fiduciary 
Funds Earmarked Or Administered By Departments, Bureaus, Offices And 
Agencies of the National Government, Including Government-Owned Or 
Controlled Corporations. ,, 
SEC. 22. 
Other Sources of Funding. - In the event the funds as 
provided in Sections 20 and 21 of this Act become insufficient, an amount 
not less than the initial appropriation mentioned in Section 20 hereof shall be 
appropriated from the following sources: 
a) 
The proceeds of the value-added tax imposed on all coconut 
products and by-products, except copra, copra cake and meal which are 
hereby exempted from payment of value added tax and on the services of 
coconut oil mills, desiccated coconut factories and other processors of 
coconut products shall be collected by the Bureau of Internal Revenue under 
Executive Order No. 273, entitled “Adopting A Value-Added Tax, Amending 
For n i s  Purpose Certain Provisions Of 
The National Internal Revenue 
Code, And For Other.Purposes,”: Provided, That such proceeds of the 
value added tax shall be deposited with the Treasurer of the Philippines 
within the first ten (10) days of each quarter and shall be automatically 
appropriated to finance the programs and projects of the Authority; 
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b) The proceeds of the basic export and premium duties under 
Section 514 (Export Products Subject To Duty and Rates) of the Tariff and 
Customs Code levied on copra, coconut oil, copra meal or cake and 
desiccated coconut exports, should the President of the Philippines reimpose 
such duties under and by virtue of the flexible clause provision of Section 
5 15 of such 'Code: Provided, That such proceeds shall be collected by the 
Bureau of Customs and deposited with the Treasurer of the Philippines 
within the first ten (10) days of each quarter and shall be automatically 
appropriated and released to finance socio-economic and developmental 
programs and projects of the Authority; 
c) The proceeds of loans which the Authority may obtain from 
financial institutions: Provided, That should the total outstanding proceeds 
shall at any one time exceed One Billion Pesos (P1,000,000,000.00), the 
transaction shall be subject to the approval of the President; and 
d) The proceeds from sale of bonds and other certificates of 
indebtedness issued by the Authority and duly approved by the Monetary 
Board, 
in 
an 
amount 
exceeding One 
Hundred 
Million Pesos 
(P100,000,000.00) at any one time: Provided, That the bonds and other 
certificates of indebtedness to be issued under this Act shall be exempt from 
taxation: 
Provided, further, That proceeds of the bonds and other 
certificates of indebtedness herein mentioned shall be used to finance socio- 
economic and developmental programs and projects of the Authority as the 
President of the Philippines may approve. 
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ARTICLE VI 
REGISTRATION, LICENSE, PERMITS 
SEC. 23. 
Application for Registration, - Any person directly or 
indirectly engaged in the business involving coconut products or by-products 
shall apply for registration with the Authority. For purposes of this Act, 
such person shall include: 
a) Traders; 
b) Processors; 
c) Refiners; 
d) Marine surveyors; 
e) Trade intermediaries or brokers; 
f) Laboratories dealing with the examination or analysis of coconut; 
either whole. or husked; copra and coconut oil such as, but not limited to, 
paring oil, Cochin oil, acid oil, glycerine methyl ester, fatty alcohol, copra or 
paring meal; other coconut products; and 
g) Coconut lumber processors, sawmills and dealers. 
SEC. 24. 
License to Operate. - Upon approval of application for 
registration, the Authority shall issue the corresponding license to operate 
under such rules and' regulations promulgated for the purpose. 
The 
application for registration and license shall be mandatory for both the 
principal and his agents in the case of natural persons, and the central or 
main offices and their branches or subsidiaries in the case of juridical 
persons. 
SEC. 25. 
Limitation. - The license to operate shall be valid only 
for the business, activity or function registered. Any additional business 
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license to operate. 
covered by this Act not included in the registration shall be subject to a 
separate application in which the Authority may issue a new or amended 
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SEC.26. 
Denial of Registration and License. - The Authority 
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may refuse any application for registration and issuance of license, or 
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renewal thereof, if the applicant has been found by the Authority, after 
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inquiry or investigation, to have committed an act or acts violative of the 
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rules and regulations administered by the Authority. 
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ARTICLE VI1 
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COMMODITY SUPERVISION 
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SEC. 27. 
Application for Export Clearance. - Notwithstanding 
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any provision of law to the contrary, all exporters of copra, coconut oil, 
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desiccated coconut, copra cake or meal, and other coconut products and by- 
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products shall file with the Authority, not later than ten (1 0) days prior to the 
IS 
date of loading, an application for export clearance specifjmg the following: 
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a) Name of exporter; 
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b) Commodity; 
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c) 
Volume; 
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d) Value; 
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e) Name and address of consignee; 
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g) Date of sale; 
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h) Period of shipment; 
2s 
i) 
Port of loading; 
f) 
Authorized agent bank report of foreign sale reference number 
for the report of foreign sales; 
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j) 
Name of vessel; and 
k) Destination and port of discharge. 
SEC. 28. 
Issuance of Export Clearance. - The export clearance 
shall be issued by the Authority upon satisfaction of the following: 
a) The export price must not be less than ninety-five percent (95%) 
of the prevailing market quotation or Bangko Sentral ng Pilipinas guiding 
rate as determined by the Authority; and 
b) The exporter has complied with the regulations governing the 
products for export, including the payment of administrative fees and 
assessment. 
SEC. 29, 
Commodity Clearance. - Before shipment of coconut 
products covered under Section 27 of this Act, the exporter shall obtain a 
commodity clearance from the Authority showing the following: 
a) 
An export clearance for the product issued to the exporter; 
b) Inspection and sampling of the products by the inspector or 
surveyor appointed or designated by the Authority; 
c) Laboratory analysis of the samples attesting that the product is an 
exportable quality, which analysis shall be valid only for one (1) month from 
the date it is reported by the laboratory services of the Authority; and 
d) Payment to the Authority of all fees related to the exportation of 
the products. 
SEC. 30. 
Periodic 
Commodity 
Clearance. - A 
periodic 
commodity clearance shall be issued to regular exporters of desiccated 
coconut with existing plant facilities upon filing of an application on a plant 
basis within thirty (30) days prior to the date of initial shipment covered by 
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said clearance. The periodic commodity clearance shall be valid for a period 
of six (6) months from date of issuance unless sooner revoked or canceled. 
SEC. 3 1 .  
Use of Moisture Meter. - For an accurate determination 
of moisture content in the copra resecada, and in observation of the standard 
scale for moisture content established by the Authority, all persons or firms 
engaged in the business involving copra shall use moisture meters duly 
calibrated, serialized and sealed by the Department of Science and 
Technology. 
SEC. 32. 
Fees. - The Authority shall collect in addition to the fees 
for the issuance, renewal or replacement of license and registration such 
reasonable fees to cover the cost of services under this Act. 
ARTICLE VI11 
INCENTIVES 
SEC. 33. 
Restoration of Tax Incentives. - Notwithstanding the 
provisions of Executive Order No. 93, entitled “Withdrawing All Tax And 
Duty Incentives, Subject To Certain Exceptions, Expanding The Powers Of 
The Fiscal Incentives Review Board And For Other Purposes,” the 
following tax incentives granted to the coconut industry, its institutions, 
members and participants are hereby restored: 
a) Deductibility for income tax purposes of gifts, donations, and 
contributions made to the Authority to be used directly in the 
implementation of its development programs; 
b) The tax and fee exemption privileges granted to ago-industrial 
coconut cooperatives under Section 1 of Republic Act No. 4403, entitled 
“An Act Encouraging The Organization Of Agro-Industrial Coconut 
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Cooperatives Under The Jurisdiction Of The Philippine Coconut 
Administration, Amending For The Purpose Republic Act Numbered Eleven 
Hundred Forty-Five, ” as follows: 
1. Agro-industrial coconut cooperatives with net assets of not 
more than Five Hundred Thousand Pesos (p500,000.00) shall be 
exempt Erom all taxes and government fees of whatever nature; and 
those with net assets in excess of Five Hundred Thousand Pesos 
(P500,000.00) shall be exempt from the payment of documentary 
stamp tax, resident taxes, tax on banks and insurance companies and 
municipal and city taxes, but shall be liable for the payment of income 
tax at the full rate provided for under existing laws on the amount 
allocated for interest on capital, fixed and percentage taxes at the full 
rate provided for under existing laws on gross sales to non-members; 
and all other taxes provided for under existing laws; 
2. Agro-industrial coconut cooperatives may deposit their 
sealed cash boxes, documents and valuable papers in the safes of city 
or municipal treasurer and other government offices free of charge 
and the depository of said articles shall issue a receipt therefor; and 
3. Agro-industrial cooperatives shall be represented in courts 
by provincial or city fiscal or the government corporate counsel or his 
representative in any case where they are a party either as a plaintiff 
or defendant, except when the government is one of the parties; 
c) Exemption from all assessments, levies, taxes and fees of 
whatever nature arising from the sale or transfer to the Authority of coconut 
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No. 1468, entitled “Revising Presidential Decree Numbered Nine Hundred 
Sixty One;” 
d) The deductibility as business expense for income tax purpose of 
contributions, donations made by members of the coconut industry to 
coconut farmers cooperatives or associations duly accredited by the 
Authority; 
e) Exemption from payment of sales tax, special fund impost to 
diesel, specific tax applied to diesel fuel, manufacturer’s tax on coconut oil 
to be used as engine fuel, either in its pure state or as blending component 
for diesel fuel under Section 1 of Executive Order No. 
827, entitled 
“Exempting Coconut Oil From The Coconut Levy And Sales Tax As Well As 
From The Special Fund Impost To Diesel,” including the recognition as 
exports of all sales of coconut oil to the Philippine National Oil Company 
under the coco diesel program and for purposes of the grant of export 
credits and other privileges per Executive Order No. 846, entitled 
“Amending Executive Order No. 827” and Letter of Instructions No. 1332 
, .  
to the Bangko Sentral ng Pilipinas, Philippine National Oil Company and 
Philippine Coconut Authority and other agencies concerned to ensure the 
f) 
success of the coco-diesel program of the government; 
g) Exemption from any and all assessable taxes, including income 
tax, duties, levies, imposts and other similar charges as well as ad valorem 
duty imposed by Executive Order No. 860, entitled “Imposing An 
Additional Duty Of Three Percent (3%) Ad Valorem On All Imports,” on 
the purchase abroad and importation into the Philippines by coco-chemical 
enterprises duly registered with the Board of Investment and the Authority 
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and the sale by foreign suppliers or contractors of all required, necessary 
and useful machinery, equipment and services for the establishment of a 
chemical processing plant under Executive Order No. 880, entitled 
“Declaring The Establishment Of A Coconut Chemical Industry As A 
Means To Rationalize The Coconut Industry Of The Philippines And 
Granting Additional Incentives Therefor; ” 
h) Exemption from all taxes, duty, imposts and other charges of 
whatever nature arising from acquisition of capital equipment and 
machinery including real estate tax on land and its improvement used by 
any person or enterprise to undertake a private productivity program in 
accordance with a farm development plan approved by the Authority, which 
privileges shall be enjoyed for a period of ten (10) years from the date of 
said approval: Provided, That the project shall be implemented and fully 
developed within five (5) years from the date of approval of the farm 
developmental plan; and 
i) Generally, all other tax and non-tax incentives granted to the 
coconut industry, its institutions, members and participants under other 
existing applicable laws, decrees, executive orders and similar issuances. 
SEC. 34. 
Tax Exemption. - Notwithstanding the provisions of any 
law to the contrary, all real and personal properties, equipment and 
machinery acquired by the Authority for its operations under this Act shall 
be exempt from all taxes, fees, duties, imposts and assessments, both 
national and local except income tax. 
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ARTICLE IX 
' SPECIAL PROVISIONS 
SEC. 35. 
Conservation of Coconut Trees. - In order to conserve 
and protect the resources devoted to coconut industry, the Authority shall 
regulate the cutting or destruction of coconut trees, and in furtherance 
thereof, no person shall convert public and agricultural lands primarily 
devoted to coconut into other uses without the prior approval of the 
Department of Agrarian Reform (DAR) and the Authority: Provided, That 
the cutting or conversion may be allowed only in cases where it is shown 
that majority of the coconut trees in the land have become senescent and 
economically unproductive as determined and certified by the Authority: 
Provided, further, That no coconut trees may be cut nor any coconut farms 
be subject. of conversion where such tree or farm is involved in the 
productivity and rehabilitation program of the Authority: 
Provided, 
furthermore, That the affected farmers, tenants, lessees and regular farm 
workers shall be furnished of the findings of the Authority. 
SEC. 36. 
Measures to Protect the Zndustry. - When the general 
welfare of the industry, for national interest so requires, and when there exist 
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unabated increase in production capacity resulting, singly or collectively, in 
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cutthroat competition, overproduction, underselling, and smuggling of poor 
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quality coconut products, thereby threatening the viability and stability of 
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the coconut industry or any sector thereof, the Authority shall regulate or 
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otherwise suspend the issuance of license for the establishment and 
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operation of any new coconut oil mill, desiccated coconut plant or refinery 
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or the upgrading of capacities of existing mill, plant or refinery. In granting 
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the license, the Authority shall evaluate and determine the need for the 
establishment of additional mills or plant or upgrading the capacity of any 
existing mills or plant in relation to: 
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a) The existing market demand; 
b) The production capacity prevailing in the country, locally or any 
sector of the industry; 
c) The level and flow of supply or raw materials; and 
d) 
Such other circumstances which may affect the viability or 
stability of the industry concerned. 
ARTICLE X 
PENALTIES 
SEC. 37. Penalties. - Any person who willhlly or deliberately 
violates any of the provisions o f  this Act or rules or regulations duly 
promulgated hereunder shall be punished by a fine o f  not less than Fifty 
Thousand Pesos (P50,OOO.OO) but not more than One Hundred Thousand 
Pesos (PlOO,OOO.OO), or by imprisonment of not more than five (5) years, or 
both: Provided, That should the violation constitute an act punishable under 
the Revised Penal Code, the pertinent provision and penalty prescribed in 
the said Code shall apply. 
If the violation be committed by an association, partnership, 
corporation or any juridical person, the officer or officers, director or 
employee responsible for the violation shall be held liable and shall suffer 
the penalties provided herein. An alien found guilty shall after having 
served his sentence be immediately deported and in case of a naturalized 
citizen, his Certificate of Naturalization shall be cancelled. 
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SEC. 38. 
Interest and Charges. - Assessment and regulatory or 
service fees or charges which are not paid on the due date thereof shall be 
subject to penalty interest of fourteen (14%) percent per annum plus a 
surcharge of twenty five (25%) percent in case of willful or fraudulent 
failure to pay. 
ARTICLE XI 
TRANSITORY PROVISION 
SEC. 39. 
Abolition. - The Philippine Coconut Authority is hereby 
abolished and its powers and functions transferred to the Philippine Coconut 
Industry Development Authority together with all its appropriation and 
funding from all sources, equipment and other assets and such personnel as 
are necessary: Provided, That as a result or incident of the abolition, no 
personnel shall be terminated or separated except when the Board shall 
exercise its authority to reorganize pursuant to Article 111, Section 8 of this 
Act: Provided, further, That the Authority, through its Board, shall effect the 
transfer of the herein .personnel in a manner that will insure the least 
disruption of on-going programs and projects: Provided, furthermore, That 
until such a reorganization is implemented all officers and employees of the 
abolished agency shall continue to exercise all functions and discharge all 
their duties and responsibilities. 
. .  
SEC. 40. 
Implementation. - The Secretary of Agriculture shall, in 
coordination with the Secretary of Environment and Natural Resources, 
issue the necessary rules and regulations for the effective implementation of 
this Act. 
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ARTICLE XI1 
MISCELLANEOUS 
SEC. 41. 
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 hll force and effect. 
SEC. 42. 
Repealing Clause. - All 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. 
SEC. 43. 
Effectivity. - This Act shall take effect fifteen (15) days 
after its publication in at least two (2) national newspapers of general 
circulation. 
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Approved, 
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