A chance to address root cause of PH ills

It is good to note that the oligarchs are responding to President Duterte’s call to rid Philippine society of one of its most serious problems. Last Aug. 11, San Miguel Corp. (SMC) pledged P1 billion for the Duterte administration’s drug rehabilitation program (“SMC donates P1-B to gov’t for drug rehab centers,” News).

While the gesture is taken on a positive note, SMC ought to look deeper into the root causes of the problem if it is to seriously assist this administration. This company continuously holds on to some P17.5 billion worth of treasury shares that originally formed part of the Coconut Industry Investment Funds (CIIF)—the coco levy.

In 1983 the coconut levy funds were used by the Danding Cojuangco clique to acquire 31 percent of SMC’s common shares for P1.656 billion. The scheme used direct and indirect loans from the United Coconut Planters Bank and the CIIF oil mills—all coco levy-funded. Inconspicuously the monies were funneled through 14 holding companies. These companies bought the shares for an undisclosed principal.

Right after the fall of the Marcos dictatorship the assets were sequestered by the Cory Aquino government. The UCPB-CIIF group of companies was among the first to be sequestered.

It took some time before the two blocks of San Miguel shares were also sequestered. Prior to the sequestration, 4 percent of the CIIF block was made subject of a buy-back, a seeming attempt to clean up the tracks of a dubious transaction.

The Presidential Commission on Good Government filed one case to recover both blocks (Civil Case No. 33-F) and an auxiliary case to question the buy-back of 4 percent of the CIIF block.  In early 2000 the Supreme Court declared the buy-back illegal, as the assets subject to sequestration must be maintained in its original character. Subsequent appeals on the 4-percent shares, however, have left a final ruling hanging in air.

In September 2012 the Supreme Court laid its final ruling on the CIIF-SMC shares. The Court, with a vote of 11, no dissension, ruled that the CIIF block of shares was ill-gotten. The Court, therefore, declared that the CIIF oil mills, the 14 holding companies and the CIIF block of shares (27 percent) in SMC are public in nature, owned by government in trust for all the coconut farmers.

It should not be difficult to conclude that the 4-percent CIIF-SMC shares, being part and parcel of the original shares, should follow the same basic principles. Now estimated to be worth some P17.5 billion, the funds can be used to provide direct assistance to poor coconut farmers through government programs and help them get out of poverty. This would truly help the Duterte administration in addressing widespread poverty in the rural areas—the root cause of our society’s ills.

—JOEY FAUSTINO, executive director, Coconut Industry Reform (COIR) Movement Inc., coir_inc@yahoo.com