At Large

Why the rush on coco levy funds?

Nobody seems to contest the fact that the billions of pesos in “coco levy funds,” collected during the martial law years ostensibly for the “development” of the coconut industry, truly belongs to coconut farmers.

But why is it that coconut farmers themselves, belonging to the Confederation of Coconut Farmers Organizations of the Philippines (CCFOP), are contesting two recent executive orders calling for the “inventory and privatization” and the “reconveyance and utilization” of these same funds?


In 2012, the Supreme Court ruled that these funds/assets are “owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry.” The two EOs would seem to pave the way for the implementation of the Supreme Court ruling, which settled decades-long controversies about the nature of the funds and their proper disbursement. The CCFOP is questioning the issuance and implementation of these two EOs, claiming that President Aquino overstepped his bounds by seeking to dispose of the assets without consulting the true “owners” of the funds (the coconut farmers) and without waiting for the passage of the necessary laws to govern their proper disposition.

To this end, the coconut farmers’ groups filed in the Supreme Court last week a Petition for Prohibition against EO 179 and EO 180 which govern the use of the coco levy funds.


Charlie Avila, executive director and spokesperson of the farmers’ groups, warned that the executive orders, once implemented, would cause the “new plunder of the coco levy funds.”

Avila said that while it is “fine” to conduct an inventory of all coco levy-funded assets and investments, it would be wrong to “make a mockery of what the (Supreme) Court has just declared public trust funds by rushing to privatize them.” He asks: “Since when did government have the right to include trust assets in its privatization program? The privatization hang-up of government… is a complete abandonment of its duties as trustee of the coco levy assets and… contrary to the Supreme Court ruling and the moral philosophy of trust ownership.”

* * *

A report on the EOs that came out in this paper’s business section says the EOs would “pave the way for the privatization of the coco levy funds, specifically shares in the United Coconut Planters Bank (UCPB), San Miguel Corp. and Coconut Industry Investment Fund (CIIF) Oil Mill Group.

The same report quotes former chair of the Presidential Commission on Good Government, Andres Bautista, as affirming that the “signing of the EOs would pave the way for the long-awaited sale of UCPB, which has drawn the interest of potential bidders like Philippine National Bank, East West Banking Corp., BDO Unibank Inc., Union Bank of the Philippines and China Banking Corp.”

The least that the “trustee” government can do to adhere to ethical and legal principles, said Avila, would be to consult the true owners of the funds, the “true beneficial owners who are all the coconut farmers.” Government, he added, cannot legally privatize trust assets without the consent of the true owners. He said that “the Aquino government has this bad habit of making short shrift of constitutional provisions and legal niceties. The coconut farmers of this country must not allow him to do so in the case of the coco levy trust funds.”

* * *


The proper and legal way to settle the question of the coco levy funds, said Avila, is “to constitute the coconut levy funds and assets more explicitly into a Coconut Industry Trust Fund by law, and provide the administrative structure, also by law, that will manage the trust funds and ensure that its use will benefit the coconut industry and the coconut farmers.”

Indeed, there are already bills filed in both the House of Representatives and the Senate which proposes the formation of a new government-owned and -controlled corporation or foundation to be called the Philippine Coconut Farmers’ Foundation or PCFF.

“More seriously,” said Avila, “the President cannot just arrogate unto himself, without legislative authority, the power to allocate, use and administer the billions of pesos of coconut funds and assets. The two chambers of Congress are doing this right now as is their right and duty, but the President would preempt them with these assailed EOs for how many billions of reasons and for what urgent purposes only his ruling party knows—although the farmers have their 2016 suspicions.”

The questioned EOs, added Avila, are “characterized by mere tokenism in farmer participation” with the farmers treated as “mere objects, not subjects, in the whole process. They are the classic excuse for the classic plunder of this kind of wealth.”

* * *

Just as alarming to Avila and the farmers he represents is what they call “the government’s accent on finance: the conveyance to or depositing in favor of the government the riches of the coco levy funds—now valued at P73.4 billion in hard cash, which are currently held in trust in the Bureau of Treasury and various other companies such as the UCPB, CIIF Oil Mills Group, Coco Live, UCPB-Gen, and Cocochem. In this regard, government agencies are quite in a rush. They want it all turned over now, in utter disregard of the exclusive authority of the judiciary on the matter.”

Of course, this is a free country and anyone is free to speculate on why the government is, as Avila puts it, “quite in a rush” to liquidate and privatize the coco levy funds.

No one could be more eager to see the funds properly disposed than the coconut farmers, who’ve waited for decades to seek justice. The least government can do, it seems, is to respect the farmers’ sentiments and consult them properly on where their money is to go and to be used for.

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TAGS: Coco levy funds, Coconut farmers, Coconut Industry Investment Fund, Confederation of Coconut Farmers Organizations of the Philippines, San Miguel Corp, UCPB, United Coconut Planters Bank
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