‘Fire sale monopoly’

The Marcos coconut levy robbed farmers blind for years. Are these victims again being set up for an P84.3-billion “fire sale monopoly”?

President Aquino froze tapping into sequestered 700 million San Miguel Corp. shares until the Supreme Court hands down a final decision on claims. Quarterly dividends, over the last two years, crested at P8.8 billion. Men have killed for less.

Ferdinand Marcos’ Presidential Decree No. 276 used martial law to clamp a levy on coconut farmers in 68 provinces. Their taxes bankrolled a hydra of coco mills, a bank, even a producers’ federation that never mustered the names of supposed one million members. Eduardo Cojuangco was coconut overseer, until People Power drove him into exile with the dictator in 1986.

In the post-Edsa Revolt era, ex-Marcos commissars signed up the best legal  minds that looted levies could  buy to keep the plunder. The capo di tutti capi in this struggle was Cojuangco. He cashed in as main beneficiary. In a less than compelling Supreme Court decision, Arroyo justices ruled: Cojuangco could legally pocket 16.2 million in San Miguel Corp. shares.

“The joke of the century,” snapped then Justice Conchita Carpio Morales. Cojuangco “used for his personal benefit the very same funds entrusted to him,” Morales’ dissenting opinion states. “[These] were released to him through illegal and improper machination of loan transactions. [His] contravention of corporation laws … indicates a clear violation of fiduciary duty…”

Go through the fine print of an earlier Supreme Court decision on conversion of SMC shares, Budget Secretary Florencio Abad suggested in an Inquirer interview. It has a curiously “stitched-in qualification”: Should the government sell its shares, San Miguel Corp. “shall have (a) exclusive option to buy said shares and (b) at P75 per share.”

Wait! Isn’t that a Court-sanctioned fire sale for a cozy monopoly? A share now commands P114 at the stock exchange, Coconut Industry Investment Fund chair Wigberto Tañada said. In a free market, the government would probably earn P87 billion for the small farmers. A January 2012 evaluation priced the government’s SMC shares cresting at almost P85 billion.

But this booby-trapped provision would shackle the government into settling for only P57 billion. Who’d pocket the “diff” this time around? The loss would be a staggering  P30 billion. Small coconut farmers would be suckered all over again; that would be “joke of the century 2.”

“Why the Supreme Court attached that condition is something that has to be seriously looked into,” Abad added. That, sir, is an understatement. Since the Inquirer published Abad’s question, reactions have cascaded in.

“We cannot even begin to imagine the US Supreme Court ordering the Budweiser Company, which is a major brewery here since 1876, to sell its shares below market prices,” notes Manuel de Torre, now a Milwaukee resident. “That’s price-rigging.” Onli in da Pilipins?

“Who cobbled these legal shackles?” Carmen Montemayor of Danao City inquired. “They create an economic monopoly by judicial fiat. Publish the names of the justices who crafted, then voted for, an aberration that makes this Supreme Court a purchasing agent for San Miguel.”

Justices flip-flopped in cases like 16-towns-turned-cities-back-to-towns and PAL flight attendants, recalls engineer Leonor Lagasca from Iloilo. “Has anybody been writing sub rosa ‘Dear Mr. Justice’ letters? What legal dodges will the justices come up with now? Only transparency guarantees accountability.”

Various options are being raised how best the Aquino administration can prevent further theft of the levy and how to use it best for the future. It is mulling a trust fund and considering various pending bills in Congress.

The track record is shabby, Sen. Joker Arroyo cautions. Proceeds from the P52-billion sale of military camps were to benefit soldiers. While others made a killing, the soldiers were left out. Arroyo has called for the immediate cash distribution to coconut farmers of assets

Impoverished coconut farmers cannot wait forever for the Supreme Court, says Secretary Joel Rocamora of the National Anti-Poverty Commission. The administration could borrow against the sequestered assets to underwrite a P10-billion, five-year “road map” to revitalize the coconut industry,

The commission identified 609 poorest municipalities in the country. Of these, 493 cultivate coconut. In the first year of this road map, the funds will go to 153 municipalities in  Camarines Sur, Leyte, Albay, Quezon, Sorsogon, Camarines Norte, Lanao del Norte, Northern Samar, Eastern Samar, Davao Oriental and Sarangani.

Last December, Senate President Juan Ponce Enrile urged Congress to approve a trust fund for coconut farmers. Otherwise, these assets would be dissipated, he warned. UCPB has been criticized for issuing questionable loans to San Miguel. The bank is now under a P30-billion government rehabilitation program.

Coconut farmers’ groups, along with Bishop-Ulama-Pastors conferences, back the creation of a trust fund from the sales of SMC shares, for the coconut industry rehabilitation. They also urge an updated census of coconut planters. No “wang wang” group should take over the farmers’ voice.

President Aquino has a once-in-a-lifetime opportunity to curb the avaricious who’ve battened off on the small coconut farmers. This demands grit. “For greed, all nature is too little,” Seneca once said.

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