Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

5250

House Bill No.

Introduced by Hon. Delphine Gan Lee

EXPLANATORY NOTE

For almost half a century, the coconut farmers have long been waging a battle for
their right to gain access to the Coco Levy Fund and to have the opportunity to develop their
industry and provide better lives for their families. The huge potential of the coconut industry
to be a contributor to the Philippine economy remains largely untapped. Through
technological innovations, it is possible to hamess the coconut industry to address increasing

demands and offer its products to other markets.

This bill aims to create the Coconut Farmers Trust Fund for the growth of the industry
which will in effect benefit the entire nation.

Included in this bill is the financing of programs for the increased productivity of
coconut farms, capacity building of farmers, research and development of coconut-based
enterprises, and implementation of poverty-alleviation programs. It aims to revive the

industry and attract investors to make it viable and profitable.

The urgent passage of this bill is thus earnestly requested.

HON. DI "AN LEE
Represenftive, ARI Party-List



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS.
Second Regular Session

5250

House Bill No. __

Introduced by Hon. Delphine Gan Lee

AN ACT TO DEVELOP THE COCONUT INDUSTRY BY CREATING THE
COCONUT FARMERS TRUST FUND

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

SECTION 1. Short Title. ~ This Act shall be known as the “Coconut Farmers’ Trust
Fund Act of 2014.”

SECTION 2. Declaration of Policies. — The State recognizes that the agriculture

sector provides food and vital raw materials for the rest of the economy;

The State also recognizes that rising productivity and efficiency in the agricultural
sector are critical in maintaining the affordability of food and purchasing power, especially

among the poor;

It is hereby declared the policy of the State to consolidate the benefits due to coconut
farmers, especially the poor and marginalized, under various statutes and to expedite the
delivery thereof in order to achieve a balanced, equitable, integrated, and sustainable growth

and development for the coconut industry.

SECTION 3. The Coconut Farmers Trust Fund. — Pursuant to the provisions of the
Presidential Decrees and other issuances creating the coconut levy trust fund and in line with
‘the decisions of the courts affirming the trust character of the fund, there is hereby constituted
an irrevocable trust fund, to be known as the Coconut Farmers Trust Fund (hereinafter

referred to as the “Trust Fund”), which shall be capitalized, managed, utilized and accounted


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for in the manner provided in this Act.

SECTION 4. Purpose of the Trust Fund. ~The Fund shall be established for the
development of the coconut industry for the benefit of the small coconut farmers and fam
workers, Its purpose shall include the financing of programs or assistance for the benefit of
the coconut farmers, increased productivity of the coconut industry, and development of

coconut-based enterprises and other anti-poverty programs.

SECTION 5. Initial Capitalization of the Trust Fund, — The Coconut Industry
Investment Fund — San Miguel Corporation (CIIF-SMC) block of shares,

wrting with the
proceeds of the Series 1 preferred shares together with all dividends declared, paid or issued
thereon, as well as any increments thereto, and all other available funds shall form the initial
capital of the Trust Fund, The government shall reconvey the aforesaid proceeds, dividends,
and increments thereto to the Trust Fund Committee created under Section 9, under such

terms and conditions consistent with this Act.

Nothing in this Act shall be understood to prevent any person, group, or entity from
conveying to the Committee other properties and/or additional assets which shall from part of

the initial capitalization of the Trust Fund.

SECTION 6. Extent of the Trust Fund, ~ The ‘Trust Fund shall be composed of the
following:
(a) Initial capitalization as provided in Section 5;
(b) Such other properties and/or assets intended for the purpose herein stated, and
conveyed or transferred to the Committee emanating from all coco levy recovered
assets; and ,

(c) Grants, donations, and other lawful transfers by public or private entities,

SECTION 7. Perpetual Nature of the Trust Fund. — In order to ensure an enduring
character of the Fund and to maximize its benefits to the coconut farmers and the industry, it
shall be managed and administered in a prudent manner consistent with its character as a
perpetual fund:

(a) The principal shall be perpetually maintained and preserved. For this purpose, the

principal is defined as all recovered coco levy assets including their dividends


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which shall be managed to generate income and/or interest. The principal may be
augmented by grants, donations, and other lawful transfers by public or private
entities;

(b) In the event that any property or asset of the Trust Fund (or any portion hereof, as
the case may be) is subsequently sold, alienated or disposed of, the proceeds and
revenues arising out of and realized from such sale, alienation or dispositions,
shall form part of the principal;

(©) Only the income, interest earnings; and

(@) and monetary benefit realized by and accruing on the principal shall be used for

such purposes and endeavors specific under the provisions of this Act.

SECTION 8. Designation of Trustee Bank/s. — The Committee shall designate a

reputable depository bank/s of the Trast Fund, which shall:
(a) Manage, utilize, and account for the Trust Fund of a portion thereof in the manner
hereinafter provided by the Committee; and
(b) Exercise the tasks, fumctions, and duties determined and established by the
Committee created under the provisions of this Act, to the extent allowed under
applicable laws.

SECTION 9. The Coconut Farmers Trust Fund Committee. ~ A Coconut Farmers
Trust Fund Committee (he “Committee”) is hereby created under the Office of the President.
Its purpose shall be the management and administration of the trust fund and the disposition
and utilization of its earnings for the development of the coconut industry and ultimately

benefit the small coconut farmers and farm workers.

‘The Committee shall be composed of the President of the Philippines acting as the
Chairperson, and four (4) other members, as follows:

(a) The Secretary of Agriculture;

(b) One (1) representative from coconut farmers’ organizations which have
considerable experience and reputable track record;

(©) One (1) representative from the finance and banking sector, which must have been
in the finance and banking industry for at least ten (10) years; and

(d) One (1) representative from civil society organizations with a focus on uplifting
the small coconut farmers and the industry which has a considerable experience

and reputable track record:


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With the exception of the President and the Secretary of Agriculture whose position in
the Committee is co-terminous with their respective terms in office, the members of the
Committee shall each hold a term of three (3) years and can only be reappointed once by the

President.

SECTION 10. Functions and Responsibilities of the Committee. — ‘Yo ensure that

the benefits and gains arising out of the Trust Fund directly redound to, and are received by,

the small coconut farmers and farm workers, the Committee shall:

(a) Decide on the disposition, utilization, and allocation of the said funds and assets in

consultation with the coconut farmers for the following special purposes:
a, Increase in the productivity of small coconut farmers through sustainable
means;
b. Rehabilitation of the coconut industry and promotion of coconut-based
farm systems;
c. Establishment of coconut-based enterprises and modernization towards
global competitiveness; and
d. Other poverty alleviation and social equity programs.
(b) Set the investment and asset management policy of the Trust Fund in
consideration of all existing coconut industry development studies and plans
consistent with the purposes of this Act. The said asset management policy shall

include an immediate evaluation of all reconveyed assets, determine its usefulness

to the coconut farmers and the industry, and recommend the appropriate

disposition thereof if neede:

(c) Periodically review the established priorities for the preferential assistance to
small coconut farmers and farm workers, revised as necessary in accordance with
changing conditions;

(d) Formulate the rules and regulations governing the allocation, utilization, and
disbursements of the Fund;

(ec) Form a Seeretariat that will provide staff work and serve the needs of the
Committee for the purposes stated in this Act;

(0) Monitor implementation and exercise oversight functions;

(g) Perform such other acts necessary, proper, or conducive to attain the purposes of

the Fund.


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Secretariat shall be sourced from a portion of the interest earnings of the principal which shall

ION 11. Operating Budget. ~ The operating budget of the Committee and its

not exceed ten percent (10%) of the amount of projects and programs for implementation,

SECTION 12. Implementing Agencies, - The Committee may call upon any

department, bureau, office, age!

and instrumentality of the government, including
government owned and controlled corporations, such as the Philippine Coconut Authority,
the Department of Agriculture, Department of Science and Technology, and the Department
of Energy to implement identified programs and projects.

SECTION 13. Reconveyance of Assets. — The Presidential Commission on Good
Government, the Office of the Solicitor General, and other appropriate government
instrumentalities are hereby directed to take all the necessary steps to reconvey all recovered

coconut levy funds and assets to the Committee.

SECTION 14. Separability Clause. - If any provision of this Act or the application of
such provision to any person or circumstance is declared invalid, the remainder of the Act or
the application of such provision to other persons or circumstances shall not be affected by
such declaration,

SECTION 15. Repeating Clause. — Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule or regulation contrary to or

inconsistent with this Act is hereby repealed, modified, or amended accordingly.

SECTION 16. Effectivity Clause. — This Act shall take effect fifteen (15) days after

its publication in at least two (2) newspapers of general circulation.

Approved,