Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _2552

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

From 1971 to 1982, small and marginalized coconut farmers have been remitting
Coconut levy funds to the government. These funds were intended to support and advance
the development of the coconut industry for the benefit of coconut farmers,

Various laws and issuances were Signed to ensure that coconut levy funds were
collected throughout the years. These include:

1) On June 19, 1971, Republic Act 6260, known as the “Coconut Investment Fund”

(CIF) was implemented and authorized the collection from coconut farmers a sum

equivalent to 0.55 on the first domestic sale for every 100kg of copra;

On August 20, 1973, P.D. 276 created the Coconut Consumers Stabilization

Fund (CCSF) which imposed an additional of P15 for every 100kg sale of copra

resecada;

On November 14, 1974, the Coconut Industry Development Fund (CIDF) was

established to finance the establishment, operation, and maintenance of hybrid

Coco seed farm and replanting program. The levy was made permanent; and

4) On October 2, 1981, PD 1841 (the Coconut Industry Stabilization Fund) revised
levies and imposed the amount of P50 for every 100kg of copra resecada and
later was raised to P100 per 100kg of copra

2)

3)

As a testament to the effectivity of collections during the first decade of its
implementation, through the blood and sweat of the coconut farmers, the levy accumulated
the amount of P9.625 billion.

After the EDSA Revolution of 1986, the administration of the late former President
Corazon Aquino, through the Presidential Commission on Good Government, sequestered
all assets acquired by Marcos and his cronies including the coco levy funds. But despite the


huge amount of existing coconut levy funds, the genuine stakeholders — the small and
marginalized coconut farmers, remain underprivileged and the coconet industry remains
stagnant and dragged down,

It is estimated that the coco levy funds, inclusive of earnings, interests and other
Philpeme as fave grown to some P200 billion according to a July 11, 2013 report of the
Philippine Daily Inquirer.

twas a great moment when after almost four decades, the highest court of the land
affirmed that the funds were indeed owned by the small coconst farmers and should be
treated as public funds.

On January 24, 2012, the Supreme Court declared the CIIF. block of shares as
having been purchased by means of the coconut levy funds and therefore should be treated
s public funds

Executive Orders 312 and 313 of former President Estrada, which ‘sought to privatize
shares in San Miguel Corporation that were bought with coco levy funds, were junked by
the Supreme Court in April 2012.

In the most recent ruling of the Supreme Court dated July 9, 2013, the high court
upheld its decision that shares in the UCPB of Cojuangco were owned by the government.
The coconut levy funds should be used for the benefit of the small and marginalized
Coconut farmers and farm workers.

‘The abovementioned decisions by the courts regarding the coco levy funds affirm
the need to retum these funds to their rightful owners. itis iranie ther coconut, popularly

‘This bill seeks to address the decades-long struggle of coconut farmers by enacting
@ genuine law on the use of the coconut levy funds. It is meant to Provide a mechanism to
Protect the rights, welfare and interest of the small and marginalized coconut farmers and
farm workers.

'n view of the forgoing, the passage of this bill is earnestly ey

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No 2552

Introduced by Representative Sharon Garin

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

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

Section 2. Declaration of Policy. Its hereby declared the policy of the State to
pursue and attain the balanced, equitable, integrated, and sustainable growth and
development of the coconut industry. Towards this end, the State shall adopt the
necessary measures to immediately address the serious Problems besetting the
coconut industry, protect the ‘Socio-economic well-being of coconut farmers, and
enser ytnat the benefits due them, especially the poor and the marginalized,
under various statutes shall be consolidated and their delivery expedited. Any
measure or program undertaken in accordance to this Act shall be deemed
complementary to and shall not be a replacement for existing and potential coconut
development programs already conducted by other agencies

Chapter |
Definition of Terms

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

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

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its aspects and the establishment of a research program into the
commercial and industrial uses of coconut,

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

GUE Ol Mills Group refers to the six (6) CiIF companies, namely: (1)
Pouthern Luzon Coconut Oil Mills; (2) Cagayan de Oro Gil Company,
feorporated; (3) ligan Coconut Industries, Incorporated: (4) San Pabie
Manufacturing Corporation; (5) Granexport Manufacturing “Corporation,
and (6) Legaspi Oil Company, Incorporated, acquired by the UCPB
using the CIIF

GIF SMC Block Shares refer to the thirty-three million one hundred
thirty-three thousand and two hundred sixty-six (33,133,266) shares of
stock in SMC, sequestered by the Presidential Commission on Good
Government (PCGG) in April 1986 representing thirty-one percent (31%)
Of the total outstanding capital stock of SMC.

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

€) Tills the land (owner-cultivator); or

b) Does not till the land but has control and ‘Supervision over the
Cultivation of a farm; and

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

@) Leaseholder or tenant who tills or supervises the cultivation of the
farm; or

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


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Coconut Levy Assets refer to any and all kinds of property, whether
real or personal, tangible or intangible, wherever situated, which have been
acquired through or otherwise funded by the Coconut Levy Funds, including
those assets that may be recovered in favor of the Government, as well as
the fruits or income derived therefrom, including those acquired in exchange
or substitution thereof, including but not limited to the following:

1. The shares of stock in the UCPB determined to be owned by the
Government;

2. The CIIF Oil Mills Group;

3. The CIIF Holding Companies;

4. The Converted SMC Series 4 Preferred Shares; and

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

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

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

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

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

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

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

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

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

benefits realized by and accruing to the Trust Fund or any portion

thereof.

Trust Principal refers to

1. The initial Trust Principal composed of dividends dectared, paid, or
issued on the Converted SMC Series 1 Preferred Shares; the
Proceeds from the redemption of the Converted SMC 1 Preferred

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Shares; all income or interest derived therefrom as of the effectivity

Pris Act: or any other cash Coconut Levy Asset deposited in tr,

Bureau of the Treasury (BTr) and the UCPB as administrator of the
HIF;

2. Any ‘and all proceeds of privatization of the Coco Levy Assets
remitted thereto by the Privatization and Management Office (PMO)
gry zed under Article Ill of Executive Order (EO) No. 323 (s. 2001);
and

3. Proceeds of privatization of any or all Properties or assets conveyed
by any person, group, or entity to the Committee from tine to time,
a8 provided in Section'8 hereof.

Chapter 1!
Audit and Reconveyance of Coconut Levy Assets

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

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

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

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

Inventory of the Coconut Levy Assets to the Committee, a¢ well as tre empirical basis
and methodologies employed for the valuation.

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


1 Section 5. Reconveyance of Coconut Levy Assets. Immediately upon the
3 Sffectvity of this Act, the PCGG, the government representatives to the Cou of
@ Seduestered/surrendered corporations, and any government agency or person in
5 Possession, custody, control, or administering any Coconut Levy Asset shall perform
5 or cause the performance of the following

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a Reconveyance of the title of such asset to the Republic of the
Philippines;
b Delivery of all stock certificates and other evidence of ownership
10 to the BTr for safekeeping: and
11 ©. Deposit all cash assets in the Trust Fund.
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ia Any Provision of the law to the contrary notwithstanding, the BTr and the UCPB
1g shall directly remit the initial Trust Principal to the Trust Fund. Provided, That the BTr
iz Shall transfer the remaining cash assets from the special account in the General Fund
78 _ within a period of five (6) years in equal amounts each year

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

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32 The COA shall also conduct the regular financial and compliance audit of the Coconut
23 Levy Assets, and submit the annual audit report thereon ee mandated by the
32 Severnment auciting rules and regulations, unti said assets are privatized,

2s

26 Chapter Ill
27 Coconut Farmers and Industry Development Trust Fund
28

29 Section 6. The Coconut Farmers and Industry Development Trust Fund. There
30 is hereby created a trust fund to be maintained for a Period not to exceed thirty (30)
31 years or until the fund is fully utilized to be known as the Coconut Farmers and
32 Industry Development Trust Fund, hereinafter referred to as the Trust Fund, which
33 shall consist of the Trust Principal and the Trust Income. No Portion of the Trust
34 Fund shall be derived from the General Fund of the National Government; Provided
35 That, any unutilized balance in the Trust Fund after thirty (30) years shall revert to the
36 General Fund of the National Government, and shall be capitalized, managed,
37 utilized, and accounted for in the manner provided in this Act. Nothing in this Act
38 shall be understood to prevent or prohibit any person, group, or entity from
39 conveying to the Committee other properties and/or additional assets either for
40 the use of the coconut industry or for the purposes of Privatization, in which case
41 the proceeds of such privatization shall form part of the Trust Fund.

42

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

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48 Section 8. Capitalization of the Trust Fund. All assets and/or Properties derived
49 from all coconut levy recovered assets; and all dividends, interest earnings, and
50 incomes that are available upon the effectivity of this Act shall form part of the initial

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Capital of the Trust Fund. The Trust Fund shall thereafter be augmented with all
the proceeds of privatization/disposition of the Coconut Levy Assets remitted
directly thereto by the PMO in accordance with this Act, including any and all
forms of “income, interests, earings, yields, or any monetary benefit derived
therefrom prior to the privatization/disposition of these Coconut Levy Assets.

In order to ensure the enduring character of the Trust Fund, the Principal thereof
shall be augmented by grants, donations, and other lawful transfers by public or

private entities. At the end of the year, all unspent portion of the trust income for
the year shall accrue to the Trust Principal

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

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

b. All disbursements shall only be made on the basis of the funding
Pecvinement of the program, activity, or project by the Committee of
Provided in the Coconut Farmers and industry Development Plan, Provided,
That an annual allocation of at least Five Billion Pesos shall be released for
the programs and projects provided under this Act: and

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

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

Disbursements or expenditures by the concerned implementing agencies in violation
of the purpose of the Trust Fund shall be void and shall Subject the erring officials

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

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

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

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

d. Perform other tasks as may be authorized by the Commitee.

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

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

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

The Committee shall have the following powers and functions:

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

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

© Formulate the Investment Guidelines pursuant to the allowable investment
Stated in Section 28 of this Act

d. Appoint a fund manager, if necessary, to handle the investment of the
Trust Principal;

@. Identify the Coconut Levy Assets that will be privatized, retained, or
abolished and submit ts recommendation to the President for approval;

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

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

h. Authorize the rehabilitation of Coconut Levy Assets approved for
Privatization pending actual disposition:

"Submit reports and recommendations to the President in connection

with its functions under this Act; and
Exercise such other incidental powers and functions as may be
Necessary to attain the objectives of this Act.

The PCA shalll provide Secretariat support to the Committee

Section 12. Composition. The Committee shall be composed of the following:
a. Six (6) representatives from the government who shall be serving in ex
Officio capacities:
J. Secretary of the Department of Agriculture (DA), as Chairperson;
2. Secretary of the Department of Finance (DOF), as Vice Chairperson;

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3. Secretary of the Department of Trade and Industry (OT);

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

5. Administrator of the PCA; and

6. Arepresentative from the Office of the Executive Secretary.

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

© — Two (2) representatives from the coconut industry sector who have
Considerable experience and reputable track records

The nominees of the coconut farmers’ organizations shall be validated and
Shortlisted by the PCA. The list of nominees, which shall number at least three (3)

Sector shall be appointed by the President from a list of nominees, which shall
number at least six (6), submitted by the PCA

The government representatives in the Committee shall serve only during their
Creoealive terms in office. The representatives from the cocenut farmers’

[epresentatives shall continue to hold office until their Successor is appointed;
Provided That, any appointment to fill a vacancy in the Committee shall be only for
the unexpired term.

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

Section 14. Meetings of the Committee. The Committee shail meet once a
month, or as often as deemed necessary and expedient to discharge its

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

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

©. All dispositions or privatization proposals

Provided further, That the disbursements requiring the approval of at least a majority
of the members of the Committee may be subject fo the Presidents disallowance.

The Chairperson, if unavailable, may designate the Vice Chairperson to convene
the Committee and Preside over the Committee's meeting on behalf of the
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Section 15. Compensation of the Members of the Committee. The members of the
Committee may be entitled to per diems and reimbursable expenses, in accordance
with the COA rules and regulations.

Section 16. Obligations of the Members of the Committee. The members of
the Committee shall act with due care, diligence, skill” and good faith in all its
Gealings with the Trust Fund and the Coconut ‘Levy Ascets They shall avoid
ponticts of interest and declare before the Committee any interest they may have
in any particular matter.

Where a member of the Committee receives any profit or benefit by virtue of his
Pffice, including acquiring shares in corporations ‘that form part of the Coconut
Levy Assets, using the Coconut Levy Assets for one'e benefit, receiving
commission on contracts from the Coconut Levy Assets. or taking advantage of
bonemete ;opPortunities involving the Coconut Levy Assets, all Such profits or
benefits shall be returned to the Trust Fund without prejudice to any administrative,
Gvil, OF criminal action against such member. This provision crey be applicable
romithstanding the fact that such member of the Committee used ones ‘own funds
in the venture

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

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

The Executive Director shall have the following powers and functions:

& Execute policies and administer the programs approved or promulgated
by the Committee:

b. Monitor the Progress of the implementation of the Plan and submit
Periodic reports to the Committee;

© Prepare an annual report on the activities of the Committee at the close
Of each fiscal year and to submit a copy thereof to the President and
Congress;

. Keep and maintain official records and Teports of the proceedings of
the Committee:

€. Administer oaths in all matters falling within the jurisdiction of the
Committee; and

f. Exercise such other duties as may be vested by the Committee that
are consistent with the provisions of this Act.

Section 18. Cooperation with the Committee. The Committee may also call upon
any department, bureau, office, agency, and instrumentality of the Government,
including Government-Owned or Controlled Corporations (GOCCs), for any
assistance it may need in the discharge of its functions and responsibilities as well
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Section 19. Accounting and Auditing. The Committee shall maintain records and
accounts of all investments, income, receipts, disbursements, and other
transactions relating to the management, administration, and disposition of the Trust
Fund. These records and accounts shall be maintained in accordance with existing
audited eee cualting laws, rules, and regulations. ‘The Trust Fund has be
audited by the COA.

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

Chapter V
Coconut Farmers and industry Development Plan

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

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

The Ad Hoc Committee, in consultation with coconut farmers’ organizations,
industry associations, civil society organizations, academe, concerned government
ageies. and other stakeholders in the coconut industy shall indoors in an
integrated coconut industry strategy the policies for ‘the development and
rehabilitation of the coconut industry. It shall prepare every five (5) years, or as

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determined by the Committee, a medium term plan of Programs, activities, and
Projects, which shall be funded out of the Trust Fund and which’ shall be known
as the Coconut Farmers and Industry Development Plan, hereinafter referred to as.
the Plan. The Plan shall be consistent with the Philippine Development Plan and
Shall be subject to mandatory review every year

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

ctermined by the Committee, to assess the impact of the programs and
projects in the Plan. The results of the independent study shall be one ef tra bases to
pbdate the Plan. The conduct of the study shall be chargeable to the regular funds of
the PCA.

The PCA shail commission an independent ‘study on the third year, or any other date
y be d

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

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

5. Establishment of coconut-based enterprises including integrated
Processing of coconut products and downstream products:

¢- Rehabilitation and modernization of the coconut industry towards global
competitiveness;

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

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

Within ninety (90) days from the appointment of all farmer-representatives and the
industry representatives, the Plan shall be submitted by the Ad few Committee to
the Committee which shall, in turn, submit the Plan to the President, as endorsed
by the Economic Development Cluster, for approval Immediately upon its

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

Chapter VI
Privatization of the Coconut Levy Assets

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

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

b. The PMO shall be the disposition entity for non-cash Coconut Levy Assets
which shail have been approved for divestment by the President and shall
expeditiously sell, alienate, or dispose of the same upon securing the
favorable recommendation of the Privatization Council Pursuant to EO No.

Prior approval of the Committee. In the discharge of this additional mandate,

treo shall include a description of the assets privatized ard disposed of,
the Purchasers, the consideration received, and. the agreed terms of
Payment.

Busing out of or in connection with the privatization of the Geconne Levy Assets shall
be deposited to the Trust Fund, after deducting reasonable expenses actually,
and exclusively incurred by the PMO in connection with euch privatization as stated
under Section 22 hereof

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

@. Bonds, securities, securities, promissory notes, or other evidence of
indebtedness of the Government of the Philippines, or in bonds, securities,
Promissory notes, and other evidence of indebtedness to whieh full faith,
Gredit, and unconditional guarantee of the Republic of the Philippines is
pledged

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

Chapter Vil
Final Provisions

Section 25. Suppletory Application of Republic Act No. 10149 and Executive
Order No. 323. |n the interpretation of the provisions of this Act, the provisions of RA
No. 10149, otherwise known as the “GOCC Governance Act of 2011,
suppletorily. EO No. 323, entitled, “Constituting an Inter-Agency Privatization Council
and Creating a Privatization and Management Office under the Department of Finance
for the Continuing Privatization of Government Assets and Corporations,” shall also
apply suppletorily.

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

Section 27. Congressional Oversight. The Congressional Oversight Committee on
Agricultural and Fisheries Modernization shail exercise Oversight functions over the

13


Semiausunn

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

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

Section 30. Effectivity. This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulaors