Republic of the Philippines HOUSE OF REPRESENTATIVES. Quezon City EIGHTEENTH CONGRESS, First Regular Segsjon, 335 House Bill No. Introduced by Representative: Florencio Gabriel “Bem” G. Noe! EXPLANATORY NOTE Article XII, Section I of the 1987 Constitution provides: The goals of the national economy are a more equitable distribution of opportunities. income, and wealth: a sustained increase in the amount of goods and services produced by the nation for the benefit of the people: and an expanding productivity as the key to raising the quality of life for all. especially the underprivileged. The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices. In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations. shall be encouraged to broaden the base of their ownership. Coconut remains to be one of the most important crops and major export products of the Philippine, and it contributes to 3.6% of the country’s gross value-added (GVA) in agriculture, next to banana, corn and rice. Indeed, the country remains to be a top producer and exporter of coconut worldwide However, despite the continued growth of coconut exports, there has been no remarkable improvement in the coconut industry for the past years. Thus, there is an urgent need to address the stagnant growth of the coconut industry because the available resources and opportunities are hot being maximized. In improving and developing the coconut industry, funds will be more ‘ible for developmental pro; s. improvement of coconut farmer's income, and improvement of the farms” productivity. among others.In line with the 1987 Constitution's mandate, this bill is seem as timely and necessary measure to consolidate all a naling from the coconut levy in order to ereate 4a trust fund for the exclusive benefit of coconut farmers and farm workers as embodied inthe ‘Coconut Farmers Development Fund sets and benctits The coconut industry is an important pillar of Philippine agriculture and its development Mould pave way for the significant improvement of the lives of millions of Filipine people Hence. the pass ly claim hack, for the benefits of the coconut farmers and their families, the billion worth coco levy funds. In positioning. and striving to reach the full pote be persistent in pushing for the disbursement of the coce levy ¢ of this bill is one of the collective efforts exerted 0 fi al of the cloconut industry, the cou iry should In view of the foregoing, the i \mediate passage of this bill is earnestly sought KN oe oe PLORENCIO GABRIEL G, NOELAN ACT ING THE COCONUT FARMERS AND D AND PROVIDING FOR ITS MANAGE! DUSTRY DEVELOPMENT ENT AND UTI TION Be enacted in the Senate and the House of Representatives of the Philippines in Congress assembled. Section 1. Short Title. This Act shall be known as the “Coconut Farmers and Industry Development Trust Fund Act.” Section 2. Declaration of Policy. It is hereby declared the policy of the State to pursue and attain the balanced. equitable, integrated, and sustainable growth and development of the coconut industry. Towards this end, the State shall adopt the necessary measures 10 immediately address the serious problems besetting the coconut industry. protect the socio-economic well-being of coconut farmers, and ensure that the benefits due them, especially the poor and the marginalized, under various statutes shall be consolidated and their delivery expedited Chapter 1 Definition of Terms Section 3. Definition of Terms. As used in this Act 1. Coconut Industry Investment Fund (CIF) refers to the Fund created pursuant to Presidential Decree (PD) No. 1468. which authorized the United Coconut Planters Bank (UCPB) to utilize the surplus funds from the Coconut Consumers Stabilization Fund (CSP) and the Coconut Industry Development Fund (CIDE) for investments in the form of shares of stock in corporations organized for the purpose of engaging in the establishment and operation of industries. commercial activities. and other allied business undertakings related to the coconut industry in all its aspects and the establishment of a research program into the commercial and industrial uses of coconut, CUF Holding Companies refer to the fourteen (14) holding companies, namely: (1) Anglo Ventures Corporation; (2) ASC Investors, Inc.: (3) Are Investors, Incorporated: (4) AP Holdings, Incorporated: (5) Fernandez Holdings. Incorporated: (6) First Meridian Development, Inc.: (7) Randy Allied Ventures, Incorporated: (8) Rock Incorporated: (9) Roxas Shares, Incorporated: (10) San Miguel Officers Corporation. Incorporated: (11) Soriano Shares, Incorporated: (12) Te Deum Resources, Incorporated: (13) Toda Holdings. Incorporated: and (14) Valhalla Properties Limited, Incorporated. created by the CIIF Oil Mills Group to acquire. hold and manage the shares of stocks of ‘San Miguel Corporation (SMC), wel Resources, CUF Oil Mills Group reters to the six (6) CHF companies, namely: (1) Southern Luzon Coconut Oil Mills: (2) Cagayan de Oro Oil Company, Incorporated: (3) Higan Coconut Industries. Incorporated: (4) San Pablo Manufacturing Corporation; (5) Granexport6 Manutacturing Corporation; and (6) Legaspi Oil Company. Incorporated, acquired by the UCPB using the CIF CHF SMC Block Shares refer to the 33.133.266 shares of stock in SMC, sequestered by the Presidential Commission on Good Government (PCGG) in April 1986 representing 31% of the total outstanding capital stock of SMC. Converted SMC Series I Preferred Shares refer to that portion of the CiIF SMC Block Shares covering 753,848,312 preferred shares of stock in SMC representing 24% of the outstanding capital stock of SMC. Coconut Farmer refers: 1. Farmer-owner of a coconut farm who: 4 Tills the land (owner-cultivator); or b. Does not till the land but has control and supervision over the cul of a farm; and 2 Anon-owner of the coconut farm who is either a: Leascholder or tenant who tills or supervises the cultivation of the farm: or b. Farm worker or laborer, whether seasonal or itinerant, engaged in the harvesting of the nuts and processing of copra as major means of livelihood. Coconut Levy Assets refer to any and all kinds of property. whether real or personal, tangible or intangible. wherever situated, which have been acquired through or otherwis funded by the Coconut Levy Funds, including those assets that may be recovered in favor of the Government, as well as the fruits or income therefrom, including those acquired in exchange or substitution thereof, These shall include, among others, the following: The shares of stock in the UCPB determined to be owned by the Government: The CIIF Oil Mills Group: The ClIF Holding Companies ‘The Converted SMC Series | Preferred Shares: and Remaining CHF SMC Block Shares or the proceeds of their sale. Coconut Levy Funds refer to various funds generated from levies, taxes, charges, and other fees exacted or imposed pursuant to or in connection with the sale of copra rececada or its equivalent in other coconut products, and collected for the most part from coconut farmers, planters, millers, refiners, processors. exporters id other end users of copra rececada or its equivalent in other coconut products. Specifically, the term shall refer to any and all of the following: |. -The Coconut Investment Fund created under Republic Act (RA) No. 6260;The Coconut Consumer Stabilization Fund, later renamed as the Coconut Stabilization Fund, ereated under PD No. 276: The Coconut Industry Development Fund created under PD No. 582; The Coconut Industry Investment Fund created pursuant to PD No, 1468; and 5 The Coconut Reserve Fund under PD No. 1468 and PD No. 1842, 1 Investment Guidelines rete to the investment manageme procedures. and polivies to be formulated by the Coconut Farmers and Industry Trust Fund Committee ated under Section I1 of this Act, hereinafter referred to as the Committee, sind as may be amended from time to time, which shall provide the parameters for investments of the ind shall include. among others, asset allocation, eriteria and other investment Trust Fund or any portion thereof, for selection of fund managers, required income from the fund ement threshold requirements, i. Trust Income refers to the income. interest earnings. and other monetary benefits realized by and accruing to the Trust Fund or any portion thereat kh. Trust Principal reters tw: Uhe initial Trust Principal which shall composed of the proceeds from the redemption of the Converted SMC Series | Preferred Shares, dividends declared, paid, or issued on the Converted SMC Series | Preferred Shared, and all income or interest derived theretrom as of of the effectivity of this Act, and anmy other cash Coconut Levy Asswt, that are held by the Bureau of Treaure (BT1) as a special account in the general fund and as an escrow account, and cash held by UCPB as administrator of the CHE 2 Any and all proceeds of privatization of the Coco Levy Assets remitted thereto by the Privatization and Management Office (PMO), and Proceeds of privatization of any or all properties or assets conveyed by any person, group. or entity to the Committee, from time to time, as provided in Section & hereot. Chapter Il Audit and Reconveyance of Coconut Levy Assets Section 4. Accounting, Inventory and Audit and Inventory of Coconut Levy Assets. Upon the effectivity of this Act, the PCGG shall conduct a complete accounting and inventory of the Coconut Levy Assets as well as the investments, disbursement, and expenditures relating to the coconut levy fund and submit a certified report to the BTr, the Commission on Audit (COA), and the Office of the President (OP). The COA shall audit the accounting and inventory of the Coconut Levy prepared and submitted by the PCGG for the purpose of, among. others, determi completeness of said inventory. the ing of the subject assets, establishing the 1, and tracing of the flow of the coconut levy fund ster reasonableness of the asset valu