Senate approves Coco Levy Trust Fund bill

This bill would create the coconut industry trust fund to finally allow coconut farmers to directly benefit from coco-levy funds collected by government during the Marcos regime.

In a landmark move, the Senate on Monday passed on third and final reading a proposed measure that would create the coconut industry trust fund to finally allow coconut farmers to directly benefit from coco-levy funds collected by government during the Marcos regime. Senate Bill No. (SBN) 1233, or the proposed Coconut Farmers and Industry Development Act, was approved with 19 yes votes, one no vote and zero abstention.

Under the bill, the government would be mandated to "consolidate the benefits due to coconut farmers, especially the poor and marginalized, under various statutes and to expedite the delivery thereof, to attain increased farm productivity and income of coconut farmers through the rehabilitation and modernization of the coconut industry."

The bill would create the new Coconut Farmers and Industry Trust Fund, which should be "used exclusively for the benefit of the coconut farmers and for the development of the coconut industry," in line with a new Coconut Farmers and Industry Development Plan.

SB 1233 provides that the trust fund must be utilized for coconut farm improvements, to encourage self-sufficiency among farmers (35%), programs for shared facilities (35%), scholarship programs (15%) and initiatives for the empowerment of coconut farmers' organizations and their cooperatives (15%).

The bill also mandates the automatic appropriation of PHP10 billion to the annual budget of the Philippine Coconut Authority (PCA) to augment funds for farmers, increase the income of coconut farmers and support the agency's developmental efforts.

Senator Cynthia Villar, one of the co-authors of the measure, said the bill would "address the decades-old issue surrounding the coconut levy fund and how it can be used for the direct benefit of 3.5 million coconut farmers in the country." “The bill included provisions that would safeguard the PHP100-billion coconut levy funds composed of cash and assets and ensure increased income for all coconut farmers,” the chair of the Senate Committee on Agriculture and Food said.

She said the bill also requires the "investment of the trust fund only in Philippine government securities to ensure the safety of the fund and for assured returns." “The increased representation of coconut farmers in the reconstituted PCA will ensure that the protection of farmers' interest is the paramount consideration in the agency's decision-making process," she said.

The reconstitution of the PCA was among the amendments introduced by Senator Ralph Recto, also a co-author of the measure. The measure requires that membership in the PCA Board be amended to include six representatives from the coconut farmers - with two representatives each for Luzon, Visayas and Mindanao - to be appointed by the President. The trust fund would be managed by the reconstituted PCA.

Recto said the fund will remain a trust to be invested safely, administered simply by a body dominated by farmers, matched with bigger government funds, and spent in a manner pursuant to a menu that will benefit the many coconut farmers as quickly as possible.

“The levies will remain a public trust, but will be transparent. So it will not suffer the fate of typical off-budget accounts like the lamentable Road Users Tax Fund, and the lost Malampaya collections, its usage, reporting and expenditure will strictly follow budget, accounting, procurement and auditing rules,” Recto said.

Meanwhile, Senator Francis Pangilinan voted for the measure’s approval with reservations. Pangilinan, who originally sponsored and authored the bill during his tenure as chair of the Committee on Agriculture and Food, said his reservations were due to the major amendments introduced to the original version of the bill. The senator said that he believes that the amended version is far from what is expected from the original version.

Before Recto’s amendment, the original version provides that the trust fund would be managed by a Trust Committee. "We had hoped that only minor changes would be imposed on our version. But unfortunately, the wish of the majority in the Senate, expressed and formalized through a vote, has to be respected,” he said.

“With these sentiments, I vote ‘Yes with reservations,’ hopeful that the Bicameral Conference Committee will see the wisdom of the original SB 1233,” Pangilinan said.

Senator Risa Hontiveros, the lone dissenter, said she voted no particularly due to the removal of the Trust Fund Committee. While being one of the co-authors of the proposed measure, she said that at the heart of the "Coconut Farmers and Industry Development Act" is the Trust Fund Committee.

She said that while coconut farmers welcome the idea of reconstituting the PCA for more farmer representation in its governing board, “it can do more harm than good.”

In voicing her opposition to the approved version of the bill, she said the PCA charter remains the same; the PCA is a Government-Owned and Controlled Corporation whose primary function is to generate revenue and not the development of the coconut industry for the benefit of the coconut farmers; the PCA has regulatory and other functions that will overburden the institution from fulfilling its function of administering the trust fund; and the PCA was part of the coco levy scam itself during the time of Marcos.

The House of Representatives approved on third reading a bill creating the Coconut Industry Trust Fund last September 2017.


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