~;r:N/'. 'tE 
~'};:?'CE OF Tf![ :;[[ I-U:r.::\HY 
FIFTEENTH CONGRESS OF THE 
) 
, , 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
f 
S.B. No. 2051 
Introduced by Senator EDGARDO J. ANGARA 
ExpLANATORY NOTE 
The coconut industry is the country's oldest and most strategic industry contributing 
1.14% of, the total Gross Domestic Product amounting to US$ 760 million. The 
Philippines is a world leader in coconut exports dominating 59% of the global market. 
Statistics from Philippine Coconut Authority (PCA) indicated that area 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 crude 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 
1 


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. 
~y/~ 
EDGARDO J. ANGARA 
2 


I 
2 
3 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 2051 
Introdnced by Senator EDGARDO J. ANGARA 
AN ACT 
REVITALIZING THE COCONUT INDUSTRY, ApPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
Be it enacted hy the Senate and House of Representatives of the Philippines in Congress 
assemhlecl: 
ARTICLE I 
GENERAL PROVISIONS 
4 
SECTION 1. Short Title. - This Act shall be known as "The Coconut Industry 
5 
Development Act of 2010 ". 
6 
7 
SEC. 2. Statement of Policy. - It is the policy of the State to recognize the 
8 
essential role of coconut as a strategic, indigenous, replenishable and renewable source of 
9 
livelihood for a great number of people. 
10 
11 
Towards this end, the State shall promote the rapid, steady and continuous 
12 
integrated development and growth of the coconut industry in all its aspects and ensure 
13 
that the coconut farmers, farm workers, processors, lessees and tillers, and their families, 
14 
shall become direct participants in, apd beneficiaries of, such: development and growth 
IS 
thereby increasing their income and uplifting their quality oflife. 
16 
17 
SEC. 3. Goals and Objectives. - Pursuant to the above-mentioned policy, the 
18 
effort of govemment shall be directed towards the following goals aud objectives: 
19 
a) Promote the steady, accelerated and orderly development of the coconut 
20 
industry consistent with the agrarian reform policy ofthe govemment; 
• 
21 
b) Develop and establish the coconut based farming systems including but not 
22 
limited to the establishment of model coconut farms; 
23 
c) Hasten and advance industrialization in the coconut industry and the 
24 
diversification and proper utilization of coconut products aud by-products; 


1 
d) Promote the effective utilization and marketing of coconut products and by-
2 
products in the domestic and foreign markets and preserve the competitiveness and 
3 
reliability of the country as a major producer and supplier of said products, . by 
4 
establishing national standards acceptable in the international market 
5 
e) To increase production by expanding the planting and replanting program of 
6 
coconut trees in strategic areas identified as having the most potential; 
7 
D Conduct scientific researches and investigations in all areas pertaining to 
8 
agricultural, industrial, marketing and socio-economic aspect of the coconut industry and 
9 
encourage the participation of small farm holders in research and technology; 
109) Encourage and promote the organization of coconut farmers cooperatives, 
11 
associations, and organizations and provide them credit and financing schemes; 
12 
h) Generate and disseminate information and communication to fanllers, 
13 
producers and other sectors to ensure the appreciation and adoption of appropriate 
14 
technology and practices, inventions, as well as the proper awareness and correct 
15 
understanding of issues and development in the coconut industry; and 
16 
i) Coordinate and integrate all efforts of various agencies of government and 
17 
provide general direction for the steady and orderly development of the industry. 
18 
19 
ARTICLE II 
• 
20 
PHILIPPINE COCONUT INDUSTRY DEVELOPMENT 
21 
AUTHORITY 
22 
23 
SEC. 4. Philippine Coconut Industry Development Authority. - To implement 
24 
the policy and objectives of this Act, there is hereby created and established a corporate 
25 
body known as the Philippine Coconut Industry Development Authority (PHILCIDA), 
26 
hereinafter referred to as the Authority. 
27 
28 
SEC. 5. Powers and Functions. - The Authority shall exercise the following 
29 
powers and functions: 
30 
a) Formulate and adopt a general program of development geared towards 
31 
increased farm productivity, through planting or replanting of suitable seedling varieties, 
32 
rehabilitation and fertilization of coconut, integrated coconut-based farming systems and 
33 
product processing, and whenever necessary, the construction of related support and 
34 
infrastructure facilities. For this purpose, the Authority shall adopt a special program to 
35 
maximize the yield of small coconut farmers and their farm families particularly those 
36 
farms covered by the agrarian reform program of the government; 
37 
b) Undertake scientific researches and investigations on crop and varietal 
38 
improvement, pests and diseases, agronomy and mineral nutrition, coconut wood 


utilization, virology and biochemistry and epidemiology of cadang-cadang, and such 
2 
other similar studies on varietal and crop improvement of general or local suitability; 
3 
c) Undertake scientific researches and investigations on food, nonfood products 
4 
and by-products including bio-diesel, directly or in collaboration with other public 
5 
agencies or the private sector; 
6 
d) Establish, maintain and operate such number of research centers and 
7 
experiment stations, including laboratories, seed gardens, nurseries, pilot farms al1d 
8 
industrial facilities as may be necessary to undertake extensive research in coconut pests 
9 
and diseases, improvement of copra, manufacture of coconut products and by-products 
10 
and the greater utilization of the coconut for traditional and non-traditional uses; 
11 
e) Purchase or fabricate such machineries, material, equipment and supplies as 
12 
may be necessary to execute successfully such researches, investigations and 
13 
experimental work as provided under this Act on its own or in partnership with other 
14 
agenCIes; 
15 
f) Conduct intensive studies and data research, establish and maintain a database 
16 
of primary, accurate and reliable information on coconut culture, production, pricing 
17 
capacity, marketing, inventories as well as scientific thesis and treaties in coordination 
18 
with other government offices, the private sector and international agencies and bodies; 
19 
g) Promote the utilization and integration of in-house developed technologies; 
20 
h) Construct, invest, establish and operate integrated coconut centrals, processing 
21 
plants and integrated processing mills and other support facilities in aid of its research 
22 
and development function; 
23 
i) Create subsidiaries or enter into partnerships or joint ventures with any public 
24 
or private foreign or local entity, natural or juridical, and acquire, own or hold shares.of 
25 
stock or interest therein for the purpose of fully utilizing the commercial value of pioneer 
26 
and new technology generated in the industry, or of financing the manufacture, on 
27 
commercial scale, of coconut trees: Provided, That such subsidiary, partnership, joint 
28 
venture, which the Authority is authorized to create, shall be governed by the provisions 
29 
of general laws applicable to corporations and such entities: Provided, further, That after 
30 
such partnership, subsidiary, or joint venture with private Filipino citizens or entities 
31 
authorized to be created shall have b'ecome fully viable for commercial operation, and the 
32 
Authority has recovered its investments or contributions the Authority shall immediately 
33 
divest itselfofits interest over the partnership, subsidiary, or joint venture in favor or any 
34 
private person or entity. For purposes of this paragraph, the Authority shall make studies 
35 
and investigations of the enterprises and projects for which the loans, contributions and 
36 
subscriptions to the capital of the enterprise Of investments mentioned are needed, and 
37 
detelmine the advisability of financing the same; 


1 
j) Promote, encourage and help coconut planters, farmers, processors and workers 
2 
organize themselves into associations and cooperatives to give them greater control in the 
3 
marketing of their products and to help them obtain more credit facilities to register and 
4 
accredit such associations and cooperatives for purposes of participation in the 
5 
developmental programs of the Authority: Provided, That the Authority shall not directly 
6 
or indirectly influence the farmers in the exercise of their choice or selection of 
7 
candidates or leaders in the organizations; 
8 
k) Render training, extension service programs and disseminate information to 
9 
coconut fanners, farm workers and processors relative to production technology" 
10 
marketing systems and other technical skills and values, attitude formation and socio-
11 
economic development strategies; 
12 
1) Expand and develop the domestic and foreign market for coconut products and 
13 
by-products; 
14 
m) Regulate the marketing and the exportation of coconut products and by-
15 
products to conform with quality or food standards recognized by both the domestic and 
16 
international market; 
17 
n) Take samplings and conduct examination of any copra product to measure and 
18 
determine its moisture content as required in the trade; conduct laboratory analysis to 
19 
detelmine the chemical characteristics of coconut products and by-products including the 
20 
presence of toxin and other contaminations and issue the necessary commodity clearance 
21 
and export pennit: Provided, That the Authority may withhold the issuance of such 
22 
clearance or permit, or suspend or cancel any clearance or permit already issued in case 
23 
of violation by the holder of any provision of this Act or rules and regulations duly 
24 
promulgated by the Authority; 
25 
0) Require exporters, traders, millers, refiners, desiccators, oleo- chemical 
26 
processor, other manufacturers and end-users of coconut products and by-products to 
27 
submit periodic reports of production, receipts of deliveries or purchases or both, sales, 
28 
inventory, contracts and such other data the Authority may deem necessary to properly 
29 
and effectively promote the development of the industry. All information given to the 
30 
Authority by the individual firms shall be confidential in nature and could not be used 
31 
against them; 
32 
p) Undertake, initiate or participate in trade missions to obtain better preferential 
33 
trading arrangements with importing countries, and enter or otherwise participate in 
34 
behalf of the coconut trading industry in all agreements, arrangements, missions or 
35 
conventions with any foreign government or entity with respect to trading relations, 
36 
market quotas, tariff and non-tariff barriers and such other matters affecting the export of 
37 
coconut products and by-products; 


q) Provide, in coordination with the private sector, a system of accreditation of 
2 
association of traders, millers, desiccators, fanners, exporters and end-users of coconut 
3 
products; 
4 
r) To assist coconut farmers, organizations in marketing their products locally or 
5 
abroad when the need arises; 
6 
s) Assist coconut farmers organizations in establishing fanner- owned bonded 
7 
warehouses and processing facilities; 
8 
t) Impose and collect all fees, charges, assessments and imposts including 
9 
interests and surcharges authorized under this Act or its implementing rules and 
10 
regulations and disburse funds generated by the Authority from its operations to carry out 
11 
its functions; 
12 
u) Grant or accept and receive donations of any kind for any purpose not 
13 
inconsistent with the purposes ofthis Act; 
14 
v) Enter into, make and execute contracts of any kind as may be necessary or 
15 
incidental to the attainment of its purposes; 
16 
w) Promulgate Its own ruks for investigation and procedure to inVestigate 
17 
complaints involving violations of this Act or any rules and regulations issued pursuant 
18 
thereto, or any such other laws, rules and orders affecting the coconut industry; attribute 
19 
or settle conflicting claims or render the appropriate decision or award including the 
20 
imposition and administrative penalty of suspension of license, registration, pennit or 
21 
clearance issued in accordance with this Act; 
22 
x) Order the closure of any mill, refinery, processing finn, copra warehouse or 
23 
any place or building where coconut products are stored or to intercept and seize any 
24 
vehicle or ship or vessel carrying or transporting coconut products where there is 
25 
reasonable ground to believe that the owner, possessor ar .person or persons in control of 
26 
such place, building, vehicles, ship or vessel, of such products have violated the 
27 
provisions of this Act or any rules and regulations promulgated thereto in a manner that is 
28 
prejudicial and detrimental to the coconut industry, or the consuming public; 
29 
y) Develop and recommend measures and methodology quarantine for coconut 
30 
products and by-products and to impose such restrictions in the transport movement or 
31 
handling of the same in accordance with such standards and quarantine procedure 
32 
detem1ined by the Authority; 
33 
z) Call upon or deputize any official or law enforcement agency of the 
34 
government as may be necessary to assist the Authority in carrying out and enforcing its. 
35 
functions under this Act; 
36 
aa) Obtain loans and grants from local and foreign sources to finance or support 
37 
the operations of the Authority under this Act; 


bb) Issue subpoena or subpoe,na duces tecum to summon witnesses to appear in 
2 
any investigation or hearing conducted by it; and 
3 
cc) Exercise all powers and functions necessary or incidental to attain the nati<;mal 
4 
policy and objectives under this Act. 
5 
6 
ARTICLE III 
7 
BOARD OF DIRECTORS AND OTHER PERSONNEL 
8 
9 
SEC. 6. Board of Directors. - The corporate powers and duties of the Authority 
10 
shall be vested and exercised by a Board of Directors, hereinafter referred to as the 
II 
Board, composed of eleven (11) members to be appointed by the President, five (5) of 
12 
whom shall represent the coconut farmer sector, the trading and processing sector and the 
• 
13 
science and research sector. The chairman shall be designated by the President from 
14 
among the members appointed. 
15 
16 
SEC. 7, Tenure. - The members of the Board shall hold office for a term of six (6) 
[7 
years or until their successors shall have been appointed and qualified or unless sooner 
18 
removed for cause. The first members of the Board to be appointed under this Act shall 
19 
hold office as follows: Three (3) members for two years, Four (4) members for four years 
20 
and Four (4) members, inclusive of the chairman, for six years. Appointment to vacant 
21 
positions shall only be for the unexpired term of the predecessor. 
22 
23 
SEC. 8. Powers and Functions. - The Board shall exercise the following powers 
24 
and functions: 
25 
a) Formulate and adopt a national government plan for the coconut industry and 
26 
promulgate the necessary rules and regulations, policies and measures in support of the 
27 
plan; 
28 
b) Prescribe the organization of the Authority and fix the compensation of all its 
29 
personnel in accordance with law and determine and grant such allowances, and 
30 
incentives as it may deem proper with the rates to be approved by the Department of 
31 
Budget and Management; 
32 
c) Reorganize the Authority when there is a need to institute reforms in the 
33 
organizational structure to effect economy and promote efficiency. For this purpose, the 
34 
Board may group, coordinate, consolidate or integrate positions and create, classify, split 
35 
and abolish positions; 
36 
d) Adopt, promulgate or amend, revise, modifY or repeal. rules and regulations 
37 
necessary to implement the provisions ofthis Act; 


1 
e) Appoint the administrator and deputy administrators and other officers upon 
2 
the recommendation of the chairman and chief executive officer; 
3 
f) Approve the annual budget and such supplemental budgets of the Authority; 
4 
g) Review, revise, modify, increase or decrease the fees and assessment 
5 
authorized to be collected in this Act as market condition may warrant taking into 
6 
account public interest, cost of services and the prices of coconut products and by-
7 
products; and 
8 
h) Perfoffi1 such other duties as may be assigned to it by the President of the 
9 
Philippines. 
10 
11 
SEC. 9. Quorum and Meeting. - The Board shall meet as often as the exigency of 
12 
the service may demand. The presence of at least six (6) members shall constitute a 
, 
13 
quorum anq the vote of a majority of the members .present constituting a quorum shall be 
14 
necessary for the adoption of any rule, resolution, decision or any other act of the Board. 
15 
16 
SEC. 10. Compensation. - The members of the Board may receive per diems for 
17 
every meeting actually attended at such amount to be fixed by the Board but not to 
18 
exceed Two Thousand Pesos (P2,OOO.00) per board meeting: Provided, That it shall not 
19 
exceed four (4) board meetings during any month for each member. 
20 
21 
SEC. 11. Officers and Personnel. - The chairman of the Board, who shall have 
22 
the rank and privileges of a department secretary, shall be the head and chief executive 
23 
officer of the Authority. Upon his recommendation, the Board shall appoint an 
• 
24 
administrator of the Authority who shall be the chief operating officer, with the rank and 
25 
privi leges of a department undersecretary. The administrator shall have the responsibility 
26 
of managing the day-today affairs and operations of the Authority subject to the 
27 
supervision and control of the chief executive officer and in accordance with the policies 
28 
established by the Board. 
29 
There shall be such sufficient number of deputy administrators as the Board m'lY 
30 
prescribe to assist the administrator who shall be appointed or removed for cause by the 
31 
Board. The administrator and the deputy administrator may be delegated with such 
32 
powers and duties as the chairman and chief executive officer may prescribe from time to 
33 
time. 
34 
35 
SEC. 12. Application of the Civil Service Law. - All officers and employees of 
36 
the Authority shall be subject to the civil service laws, rules and regulations, and all 
37 
selection and appointments shall be based on merit and fitness. 
38 


1 
2 
3 
ARTICLE IV 
MANAGEMENT AND OPERATIONS 
4 
SEC. 13. Management. - The management of the corporate affairs of the 
5 
Authority shall be the responsibility of the chief executive officer with the assistance of 
6 
the administrator, deputy administrator and such other officers as may be determined by 
7 
the Board. 
8 
• 
9 
SEC .. 1.4 . Duties of the Chief Executive Officer. - The chief executive officer 
10 
shall exercise the following duties and responsibilities: 
11 
a) Initiate and develop corporate policies, programs and objectives for approval of 
12 
the Board; 
13 
b) Establish general administrative and operating policies; 
14 
c) Appoint all other non-officer employees of the Authority; 
15 
d) Execute for and in behalf of the Authority contracts, obligations and 
16 
agreements which are required to be <lpproved by the Board; 
17 
e) Appoint technical consultants; 
18 
f) Discipline officers and employees in accordance with civil service laws, rules 
19 
and regulations; 
20 
g) Submit the internal organizational structure of the Authority, financial 
21 
statements and other reports as may be required by the Board; 
22 
h) Delegate or assign any of the foregoing powers and duties except the power to 
23 
appoint any official in the hierarchy of authority and always subject to his supervision 
24 
and contro 1; and 
25 
i) Exercise such other powers and duties as may be delegated by the Board. 
26 
27 
SEC. IS. Corporate Planning Office. - To assist the chief executive officer in the 
28 
formulation of general plans and programs, promulgation of policies, the monitoring and 
29 
evaluation of industry and corporate activities, there shall be a Corporate Planning Office 
30 
which shall serve as the technical ann under the office of the chairman, having the status 
31 
of a branch which shall be headed by an executive director with a rank of a deputy 
32 
administrator. The executive director shall be co-terminous with the chairman and with 
33 
three (3) permanent managers performing the functions of plans and programs 
34 
development, policy research and analysis, and monitoring and evaluation . 
• 
35 
36 
SEC. 16. Duties of the Chief Operating Officer. - The chief operating officer 
37 
shall exercise the following duties and responsibilities: 


a) Ensllre that the administrative and operating policies are carried Ollt under the 
2 
direction and control of the chairman and chief executive officer; 
3 
b) Prepare and submit to the chief executive officer, within sixty (60) days before 
4 
the beginning of each calendar year, an annual operational budget of the Authority; and 
5 
c) Monitor operational problems, adopt remedial measures and submit policy 
6 
proposals to improve the day-to-day affairs and operations of the Authority. 
7 
8 
SEC. 17. Branch Offices. - The Authority shall have the following branches: 
9 
a) Agricultural Research and Development Branch for the execution and 
10 
implementatlOl1 of policies, plans and programs relating to 
advancement in 
II 
industrialization and development; 
12 
b) Industrial Research and Development Branch for the execution and 
13 
implementation of policies, plan& and programs relating to 
advancement in 
14 
industrialization and development for the coconut products and byproducts, particularly 
15 
on food, oleo-chemicals, fuels and lubricants; 
16 
c) Market Research and Development Branch for the formUlation and 
17 
implementation of policies, plans and programs relating to domestic and international 
18 
markets development affecting the coconut industry including the enforcement of market 
19 
rules and regulations formulated by the Authority; 
20 
d) Field Operations Branch for execution and implementation of policies, plans 
21 
and programs relating to production, marketing and processing activities; 
22 
e) Administration and Finance Branch for developing and maintaining the 
23 
deli very 0 f all necessary administrative, financial and manpower support for the whole 
24 
operations of the Authority; and 
25 
f) Development Information and Communication Branch for the execution and 
26 
implementation of policies, plans and programs relating to development. information and 
27 
communication as well as other socioeconomic research and development. 
28 
Every branch shall be headed by a deputy administrator or such qualified acting 
29 
or officer in charge as may be designated by the chief executive officer. 
30 
31 
SEC. 18. Regional Offices. - The Authority shall establish and organize regional 
32 
offices in accordance with the political and administrative regions in the country and such 
33 
number of provincial or district offices, or both, that will assist the Authority in the full 
34 
implementation ofthis Act. 
35 
36 
SEC. 19. Departments, Divisions and Units. - There shall be, under the office of 
37 
the chairman and chief executive officer, an administrator and deputy administrators of 
38 
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 
2 
expedient by the Board, which shall be headed by a person with the required 
3 
specialization or expertise. 
4 
5 
'ARTICLE V 
6 
SOURCES OF FUNDING 
7 
8 
SEC. 20. Coconut Development Fund. - There is hereby established a National 
9 
Coconut Development Fund, herein referred to as the "Coconut Fund," to be 
10 
administered by the Authority for the purpose of financing the growth and developme,nt 
11 
of the coconut industry, including human resource development, training of farmers and 
12 
other related activities. As initial capitalization, the sum of One Billion Pesos 
13 
(P 1 ,000,000,000.00) is hereby appropriated to be made available within one (1) year from 
14 
(he approval of this Act. 
15 
Thereafter, a continuing appropriation is hereby authorized to be appropriated in 
16 
the amount of not less than One Billion Pesos of the total industry export performance of 
17 
the immediately preceding year as reported by the Bangko Sentral ng Pilipinas and to be 
18 
deposited in a trust <;Iccount with an authorized government bank as may be determined 
19 
by the Authority. The amount shall be released annually by the said bank to the Authority 
20 
upon presentation of its approved budget and programs. 
21 
22 
SEC. 21. Special Corporate Support Fund. - The Authority shall have a Special 
23 
Corporate Support Fund for its administrative operating expenses to be funded from the 
24 
following sources: 
25 
a) An assessment of twelve centavos (PO.12) per kilogram of copra or husked 
26 
nuts, or their equivalent in other coconut products, delivered to and purchased by traders, 
27 
exporters, millers, desiccators and other end-users of coconut products: Provided, That 
28 
such assessment shall be collected by the Authority and deposited with any government 
29 
depository bank which shall be used exclusively for the operational, supplemental or 
30 
special budget duly approved by the Board: Provided, further, That no portion of the fund 
• 
31 
nor any unexpended balance thereof, including its earnings, shall be transferred to (he 
32 
general or any special funds of the government, but shall remain as corporate funds to be 
33 
used in accordance with the authorized purposes; and 
34 
b) The proceeds of regulatory and service fees or charges as may be determineq 
35 
and imposed by the Board in the implementation of the provisions of this Act to cover 
36 
reasonable costs of service in the issuance of licenses, certificates, export permits prior 
37 
commodity clearances including other incomes to be withdrawn in accordance with the 
38 
immediately preceding paragraph. Such regulatory and service fees or charges shall be 


exempted from the provisions of Presidential Decree No. 1234, entitled "Instituting A 
2 
Procedure For The Management Of Special And Fiduciary Funds Earmarked Or 
3 
Administered By Departments, Bureaus, Offices And Agencies of the National 
4 
Government, Including Government-Owned Or Controlled Corporations". 
5 
6 
SEC. 22. Other Sources of Funding. - In the event the funds as provided in 
7 
Sections 20 and 21 of this Act become insufficient, an amount not less than the initial 
8 
appropriation mentioned in Section 20 hereof shall be appropriated from the following 
9 
sources: 
10 
a) The proceeds of the value-added tax imposed on all coconut products and by-
11 
products, except copra, copra cake and meal which are hereby exempted from payment of 
12 
value added tax and on the services of coconut oil mills, desiccated coconut factories and 
13 
other processors of coconut products shall be collected by the Bureau of Internal Revenue 
14 
under Executive Order No. 273, entitled "Adopting A Value-Added Tax, Amending For 
15 
this Purpose Certain Provisions OJ The National Internal Revenue Code, And For Other. 
16 
Purposes," Provided, That such proCeeds of the value added tax shaH be deposited with 
17 
the Treasurer of the Philippines within the first ten (10) days of each quarter and shaH be 
18 
automatically appropriated to finance the programs and projects of the Authority; 
19 
b) The proceeds of the basic export and premium duties under Section 514 
20 
(Export Products Subject To Duty and Rates) of the Tariff and Customs Code levied on 
21 
copra, coconut oil, copra meal or cake and desiccated coconut exports, should the 
22 
President of the Philippines reimpose such duties under and by virtue of the flexible 
23 
clause provision of Section 515 of such 'Code: Provided, That such proceeds shall be 
24 
coHeeted by the Bureau of Customs and deposited with the Treasurer of the Philippines 
25 
within the first ten (10) days of each quarter and shall be automaticaHy appropriated and 
26 
released to finance socio-economic and developmental programs and projects of the 
27 
Authority; 
28 
c) The proceeds of loans which the Authority may obtain from financial 
29 
institutions: Provided, That should the total outstanding proceeds shall at anyone time 
30 
exceed One Billion Pesos (P I ,000,000,000.00), the transaction shaH be subject to the 
31 
approval of the President; and 
32 
d) The proceeds from sale of bonds and other certificates of indebtedness issued 
33 
by the Authority and duly approved by the Monetary Board, in an amount exceeding One 
34 
Hundred Million Pesos (PIOO,OOO,OOO.OO) at anyone time: Provided, That the bonds and 
35 
other certificates of indebtedness to be issued under this Act shall be exempt from 
36 
taxation: Provided, further, That proceeds of the bonds and other certificates of 
37 
indebtedness herein mentioned shall be used to 
finance socioeconomic and 


1 
developmental programs and projects of the Authority as the President of the Philippines 
2 
may approve. 
3 
4 
ARTICLE VI 
5 
REGISTRATION, LICENSE, PERMITS 
6 
7 
SEC. 23. Application for Registration. - Any person directly or indirectly 
8 
engaged in the business involving coconut products or by-products shall apply for 
9 
registration with the Authority. For purposes of this Act, such person shall include: 
lOa) Traders; 
11 
b) Processors; 
12 
c) Refiners; 
13 
d) Marine surveyors; 
14 
e) Trade intennediaries or brokers; 
15 
f) Laboratories dealing with the examination or analysis of coconut; either whole 
16 
or husked; copra and coconut oil such as, but not limited to, paring oil, Co chin oil, acid 
17 
oil, glycerine methyl ester, fatty alcohol, copra or paring meal; other coconut products; 
18 
and 
19 
g) Coconut lumber processors, sawmills and dealers. 
20 
21 
SEC. 24. License to Operate. - Upon approval of application for registration, the 
22 
Authority shall issue the corresponding license to operate under such rules and' 
23 
regulations promulgated for the purpose. The application for registration and license shall 
24 
be mandatory for both the principal and his agents in the case of natural persons, and the 
25 
central or main offices and their branches or subsidiaries in the case of juridical persons. 
26 
27 
SEC. 25. Limitation. - The lkense to operate shall be valid only for the business, 
28 
activity or function registered. Any additional business covered by this Act not included 
29 
in the registration shall be subject to a separate application in which the Authority may 
30 
issue a new or amended license to operate. 
31 
32 
SEC.26. Denial of Registration and License. - The Authority may refuse any 
33 
application for registration and issuance of license, or renewal thereof, if the applicant 
34 
has been found by the Authority, after inquiry or investigation, to have committed an act 
35 
or acts violative of the rules and regulations administered by the Authority. 
36 
37 
38 
ARTICLE VII 
COMMODITY SUPERVISION 


2 
SEC. 27. Application/or Export Clearance. - Notwithstanding any provision of 
3 
law to the contrary, all exporters of copra, coconut oil, desiccated coconut, copra cake or 
4 
meal, and other coconut products and by- products sha11 file with the Authority, not later 
5 
than ten (10) days prior to the date of loading, an application for export clearance 
6 
specifying the following: 
7 
8 
a) Name of exporter; 
9 
b) Commodity; 
10 
c) Volume; 
11 
d) Value; 
12 
e) Name and address of consignee; 
13 
1) Authorized agent bank report of foreign sale reference number for the report of 
14 
foreign sales; 
15 
g) Date of sale; 
16 
h) Period of shipment; 
17 
i) Port of loading; 
18 
j) Name of vessel; and 
19 
k) Destination and port of discharge. 
20 
21 
SEC. 28. Issuance 0/ Export Clearance. - The export clearance shall be issued by 
22 
the Authority upon satisfaction of the following: 
23 
a) The export price must not be less than ninety-five percent (95%) of the 
24 
prevailing market quotation or Bangko Sentral ng Pilipinas guiding rate as determined by 
25 
the Authority; and 
26 
b) The exporter has complied with the regulations governing the products for 
27 
export, including the payment of administrative fees and assessment. 
28 
29 
SEC. 29. Commodity Clearance. - Before shipment of coconut products covered 
30 
under Section 27 of this Act, the exporter shall obtain a commodity clearance from the 
31 
Authority showing the following: 
32 
a) An export clearance for the product issued to the exporter; 
33 
b) Inspection and sampling of the products by the inspector or surveyor appointed 
34 
or designated by the Authority; 
35 
c) Laboratory analysis of the samples attesting that the product is an exportable 
36 
quality, which analysis shall be valid only for one (1) month from the date it is reported 
37 
by the laboratory services of the Authority; and 
38 
d) Payment to the AuthoritY'ofall fees related to the exportation of the produots. 


2 
SEC. 30. Periodic Commodity Clearance. - A periodic commodity clearance 
3 
shall be issued to regular exporters of desiccated coconut with existing plant facilities 
4 
upon filing of an application on a plant basis within thirty (30) days prior to the date of 
5 
initial shipment covered by said clearance. The periodic commodity clearance shall be 
6 
valid [or a period of six (6) months from date of issuance unless sooner revoked or 
7 
canceled. 
8 
9 
SEC. 31. Use oj Moisture Meter. - For an accurate determination of moisture 
10 
content in the copra resecada, and in observation of the standard scale for moisture 
11 
content established by the Authority, all persons or firms engaged in the business 
12 
involving copra shall use moisture meters duly calibrated, serialized and sealed by the 
13 
Department of Science and Technology. 
14 
15 
SEC. 32. Fees. - The Authority shall collect in addition to the fees for the 
16 
issuance, renewal or replacement of license and registration such reasonable fees to cover 
17 
the cost of services under this Act. 
18 
19 
ARTICLE VIII 
20 
INCENTIVES 
21 
22 
SEC. 33. Restoration of Tax Incentives. - Notwithstanding the provisions of 
23 
Executive Order No. 93, entitled "Withdrawing All Tax And Duty Incentives, Subject To 
24 
Certain Exceptions, Expanding The Powers Of The Fiscal Incentives Review Board. And 
25 
For Other Purposes," the following tax incentives granted to the coconut industry, its 
26 
institutions, members and participants are hereby restored: 
27 
a) Deductibility for income tax purposes of gifts, donations, and contributions 
28 
made to the Authority to be used directly in the implementation of its development 
29 
programs; 
30 
b) The tax and fee exemption privileges granted to ago-industrial coconut 
31 
cooperatives under Section 1 of Republic Act No. 4403, entitled "An Act Encouraging 
32 
The Organization of Agro-Industrial Coconut Cooperatives Under The Jurisdiction Of 
33 
The Philippine Coconut Administration, Amending For The Purpose Republic Act 
34 
Numbered Eleven Hundred Forty-Five" as follows: 
35 
1. Agro-industrial coconut cooperatives with net assets of not more than 
36 
Five Hundred Thousand Pesos (p500,OOO.OO) shall be exempt from all taxes and 
37 
government fees of whatever nature; and those with net assets in excess of Five 
38 
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 
2 
municipal and city taxes, but shall be liable for the payment of income tax at the 
3 
fuJI rate provided for under existing laws on the amount allocated for interest on 
4 
capilal, fixed and percentage taxes at the full rate provided for under existing laws 
5 
on gross sales to non-members; and all other taxes provided for under existing 
6 
laws; 
7 
2. Agro-industrial coconut cooperatives may deposit their sealed cash 
8 
boxes, documents and valuable papers in the safes of city or municipal treasure 
• 
9 
and other government offices free of charge and the depository of said articles 
10 
shall issue a receipt therefore; and 
11 
3. Agro-industrial cooperatives shall be represented in courts by provincial 
12 
or city fiscal or the government corporate counselor his representative in any case 
13 
where they are a party either as a plaintiff or defendant, except when the 
14 
government is one ofthe parties; 
15 
c) Exemption from all assessments, levies, taxes and fees of whatever nature 
16 
arising from the sale or transfer to the Authority of coconut seednut for the planting or 
17 
replanting program under Presidential Decree No. 1468, entitled "Revising Presldential 
18 
Decree Numbered Nine Hundred Sixty One" 
19 
d) The deductibility as business expense for income tax purpose of contributions, 
20 
donations made by members of the coconut industry to coconut fanners cooperatives or 
21 
associations duly accredited by the Authority; 
22 
e) Exemption from payment of sales tax, special fund impost to diesel, specific 
23 
tax applied to diesel fuel, manufact~rer's tax on coconut oil to be used as engine fuel, 
24 
either in its pure state or as blending component for diesel fuel under Section 1 of 
25 
Execulive Order No, 827, entitled "Exempting Coconut Oil From The Coconut Levy And 
26 
Sales Tax As Well As From The Special Fund Impost To Diesel," including tbe 
27 
recognition as exports of all sales of coconut oil to the Philippine National Oil Company 
28 
under the coco diesel program and for purposes of the grant of export credits and other 
29 
privileges per Executive Order No, 846, entitled "Amending Executive Order No, 827" 
30 
and Letter of Instruclions No, 1332 to the Bangko Sentral ng Pilipinas, Philippine 
31 
National Oil Company and Philippine Coconut Authority and other agencies concerned 
32 
to ensure the 
33 
f) success of the coco-diesel program ofthe government; 
34 
g) Exemption from any an(l all assessable taxes, including income lax, duties, 
35 
levies, imposts and other similar charges as well as ad valorem duty imposed by 
36 
Executive Order No, 860, entitled "Imposing An Additional Duty Of Three Percent (3%) 
37 
Ad Valorem On All Imports, "on the purchase abroad and importation into the Philippines 
38 
by coco-chemical enterprises duly registered with the Board of Investment and the 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
Authority and the sale by foreign suppliers or contractors of a11 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. 
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 subj ect. of conversion where such tree 
or fa1111 is involved in the productivity and rehabilitation program of the Authority: 
. 
. 
Provided, furthermore, That the affected farmers, tenants, lessees and regular [arm 
workers shall be furnished of the findings of the Authority. 


• 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
SEC. 36. Measures to Protect the Industry. - When the general welfare of the 
industry, for national interest so requires, and when there exist unabated increase in 
production capacity resulting, singly or collectively, in cutthroat competition, 
overproduction, underselling, and smuggling of poor quality coconut products, thereby 
• 
threatening the viability and stability of the coconut industry or any sector thereof, the 
Authority shall regulate or otherwise suspend the issuance of license for the 
establishment and operation of any new coconut oil mill, desiccated coconut plant or 
refinery or the upgrading of capacities of existing mill, plant or refinery. In granting 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: 
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 willfully or deliberately violates any of the 
provisions of this Act or rules or regulations duly promulgated hereunder shall be 
punished by a fine of not less than Fifty Thousand Pesos (PSO,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 ofNaturaIization shall be cancelled. 
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. 


• 
2 
3 
ARTICLE XI 
TRANSITORY PROVISION 
4 
SEC. 39. Abolition. - The Philippine Coconut Authority is hereby abolished and 
5 
its powers and functions transferred to the Philippine Coconut Industry Development 
6 
Authority together with all its appropriation and funding from an sources, equipment and 
7 
other assets and such personnel as are necessary: Provided, That as a result or incident of 
8 
the abolition, no personnel shall be terminated or separated except when the Board shall 
9 
exercise its authority to reorganize pursuant to Article 111, Section 8 of this Act: 
10 
Provided, further, That the Authority, through its Board, shall effect the transfer of the 
II 
herein .personnel in a manner that will insure the least disruption of on-going programs 
12 
and projects: Provided, furthermore, That until such a reorganization is implemented all 
13 
officers and employees of the abolished agency shall continue to exercise all functions 
14 
and discharge all their duties and responsibilities. 
15 
16 
SEC. 40. Implementation. -'The Secretary of Agriculture shall, in coordination 
17 
with the Secretary of Environment and Natural Resources, issue the necessary rules and 
18 
regulations for the effective implementation ofthis Act. 
19 
20 
ARTICLE XII 
21 
MISCELLANEOUS 
22 
23 
SEC. 41. Separability Clause. - If any part or provision of this Act is declared 
24 
unconstitutional, other parts or provisions thereof which are not affected thereby shall 
25 
continue to be in full force and effect. 
26 
27 
SEC. 42. Repealing Clause. - All laws, decrees, executive orders, rules and 
28 
regulations and other issuances or parts thereof, inconsistent with the provisions of this 
29 
Act, are hereby repealed or modified accordingly. 
30 
31 
SEC. 43. Effectivity. - This Act shall take effect fifteen (15) days after its 
32 
publication in at least two (2) national newspapers of general circulation. 
33 
34 
Approved,