For coconut levy fund, new council ‘safest bet’

/ 12:01 AM June 04, 2015

The coconut industry is a dominant sector in the Philippine economy. It involves 25 percent of our population, 86 percent of our provinces, and 26 percent of our arable lands. Yet it contributes only 1.14 percent to our gross national product. That, in a nutshell, describes the state of the coconut industry in the Philippines.

Our government has all the good intentions—at least, on paper—to improve the industry and the life of the 25 million Filipinos who are dependent on it for livelihood. Thus in 1971, it passed Republic Act No. 6260, the Coconut Investment Act, which established the coconut levy fund. Its objectives: to maximize coconut production, give coconut farmers greater responsibility in developing the coconut industry, and ensure stable and better incomes for coconut farmers. The coconut levy fund is reported to have grown to around P83 billion—P73 billion in cash and P10 billion in UCPB shares and CIIF oil mill assets. This, however, has benefited only a few crony politicians, not the coconut farmers.


In 1973, President Marcos created the Philippine Coconut Authority (PCA) through Presidential Decree No. 232. Its mandate was “to promote accelerated growth and development of the coconut industry so that the benefits of such growth shall accrue to the greatest number, and to provide continued leadership and support in the integrated development of the industry.” Looking at the state of our coconut industry now, it seems that in its 42 years of existence, the PCA has not been effective in pursuing its mandate.

In 2001, the Supreme Court ruled that the coconut levy fund was “public in character.” It took another 12 years before it gave its final ruling which declared the entire coconut levy fund to be public money, and that it should be used solely for the benefit of coconut farmers and the coconut industry. The ruling was good, but it remained only on paper.


In March 2015, President Aquino issued two executive orders, 179 and 180, ordering the sale of all coco levy assets, the proceeds of which would be used to improve coconut farm productivity, boost coconut farmers’ income, strengthen coconut farmers’ organizations and ensure a balanced and sustainable growth for the coconut industry. These orders would give control of the use and disposition of the coconut levy fund to government agencies.

Apparently, trust in the government when it comes to the wise use of public funds—especially after the scandals involving the Priority Development Assistance Fund, the Disbursement Acceleration Program and Janet Lim Napoles, together with the continuing widespread corruption in government, the scale of which, by World Bank officials’ estimates, lays waste a third of the Philippine annual budget—is at an all-time low. Many sectors and farmer groups—among them the Confederation of Coconut Farmers Organizations of the Philippines, Philippine Association of Small Coconut Farmers’ Organization Inc., Pambansang Koalisyon ng mga Magsasaka’t mga Manggagawa sa mga Niyugan, Bayan Muna and Kilusang Magbubukid ng Pilipinas—fear that the coconut levy fund will just be dissipated, or benefit politicians (the KKK or President Aquino’s kamag-anak, kabarilan and kaklase), and leave the coconut farmers with an empty bag, as usual. Thus it behooves the government to put up a mechanism which will best protect the interests of the coconut farmers, boost the coconut industry, and keep the coconut levy fund intact.

My suggestion is to put up a Coconut Levy Fund Council (CLFC), composed of representatives from the government (e.g., the PCA, the Department of Finance, the Commission on Appointment, etc.—40 percent of CLFC), coconut farmer organizations (40 percent), and academe and businessmen (20 percent). The council will administer the fund. It will invest the fund prudently following proven investment guidelines, and use only the earnings of the fund for programs that will truly benefit the coconut farmers and improve the coconut industry. Information on the investment and use of the fund should be made available by the council to print and broadcast media and in social media for all to see for the sake of transparency.

The government may have all the good intentions. But as they say, the road to hell is often paved with good intentions. And it seems that that is the direction the coconut industry is going after 44 years of the way government has been handling—or rather, misusing and abusing—the coconut levy fund. It is high time for change. And that change can come only if the government, coconut farmers, business and academe are all involved in a meaningful way to effect that change. For that, the CLFC, or its equivalent, seems to be our safest bet at the moment.

—SAMUEL J. YAP, [email protected]

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TAGS: coco levy fund, Janet Lim-Napoles, PDAF, Philippine Coconut Authority
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