P1 Billion Lost in Foregone Interest Income Due to Non-Passage of Coco Levy Trust Fund Law: PCGG

September 2, 2016

MANILA – The non-passage of the coco levy trust fund law in the last Congress cost P1 billion in foregone interest income, the Presidential Commission on Good Government (PCGG) said in its report to the Senate during the first hearing on the bill seeking to return to Filipino coconut farmers the monies collected from them during Martial Law.

Cocolevy Hearing

That is why, Senator Francis “Kiko” Pangilinan said: “The sooner we are able to bring it back into a trust fund [through the coco levy trust fund law], then magkakaroon na naman ng interest.”

Pangilinan convened the Senate Committee on Agriculture and Food, which he chairs, and conducted its first hearing to discuss several coco levy trust fund bills filed at the Upper House.

Giving an update on the status of the cash and assets held in trust by the government in behalf of Filipino coconut farmers, PCGG officer-in-charge Danilo Daniel said the coco levy fund trust now totals P75.354 billion.

The cash, which totals P62.5 billion, is broken down into: principal at P56.5 billion, interest at P3.6 billion, San Miguel Corp. share dividends at P854 million, and remittance from the United Coconut Planters Bank at P1.48 billion. The government securities, which totals P12.847 billion, is broken down into: principal at P12.33 billion and interest at P515.3 million.

In an interview with reporters after the hearing, Pangilinan said the Supreme Court’s partial entry of judgment caused the transfer of the monies from the trust fund to a special account in the general fund.

“Pag nasa trust fund iyan, kumikita ng interest. Ngunit nang magdesisyon na ang Korte Suprema, nagkaroon na ng partial entry of judgment, inilipat na from the trust fund to a special account. Yung 62 billion na iyon dahil nasa special account na siya, under the law, in the Administrative Code, hindi na siya puwedeng kumita pa ng interest,” he explained.

(“It earns interest in a trust fund. But after the Supreme Court decision, there was a partial entry of judgment and the monies were transferred from the trust fund to a special account. The P62 billion now under the special account, under the law, in the Administrative Code, it cannot earn interest anymore.”)

If the bill is fast-tracked into a law, “then it will be put into a trust fund. Hindi na siya special account. Pag nasa trust fund na siya, pwede na siyang kumita ng interest (It’s not a special account anymore. If it’s in a trust fund, it can earn interest),” Pangilinan further explained.

Asked if it’s still possible to pass the law to fulfill President Duterte’s promise to make the coco levy fund available to the coconut farmers within his first 100 days in office, Pangilinan said: “We have 30 days to go [before the first 100 days]. Siguro maaantala nang kaunti pero palagay ko naman eh kung kaunting delay lang ay maiintindihan naman ng ating mga kababayan (We may have to wait a little longer, but I think our fellow countrymen will understand this).”

Provisions in the coco levy fund trust bill

The law to be enacted from the measures seeking to allow the coconut farmers use the trust fund will end the Martial Law-era injustice and uplift the lives of 3 million coconut farmers from whom the levy was collected, Pangilinan said.

He said the funds may now be used to develop the coconut industry using the whole coconut, not just the copra (or the dried mature coconut meat) which forms the core of the industry now.

Doing this will allow the country to produce and export more value-added coco products, the senator said.

“Instead of mostly raw and crude coconut oil derived from copra, we will export more processed and value-added coco products and by-products like virgin coconut oil, coco sugar, coco milk, among others,” Pangilinan said in his opening statement.

He said the funds should be used to increase the income of coconut farmers and workers.

“We will enhance farm productivity, set up coco-based community enterprises like seednut nurseries, integrated processing centers (for coco husk, shell, water, meat, sap, and lumber), natural fertilizer (coco peat and vermiculture) production and livestock integration, and intercropping. Farmers and farm workers will take part in replanting, fertilization, and pest management,” Pangilinan said.

He said the funds may also be used to organize coconut farmers and farm workers, most of whom are unorganized, at barangay and municipal levels.

“Through self-organization, they will also able to establish their own registry, farm production data, history of pests and diseases, adaptation measures, vulnerability maps and data, and power and water sources — skills and abilities needed to scientifically manage farms,” Pangilinan said.