Friday, March 20, 2015

Pres. Aquino issues executive order for coco levy fund inventory, privatization



President Benigno S. Aquino III issued Executive Order 179 setting the administrative guidelines for the inventory and privatization of coco levy assets.

Through the EO, the President instructed the Presidential Commission on Good Government (PCGG) to coordinate with other government agencies to identify all known coco levy assets within 60 days from the effectivity of the Order.

The President wants the PCGG, with the assistance of the Office of the Solicitor General, to submit a certified report to the Bureau of Treasury, Commission on Audit, and the Office of the President, identifying and accounting all coco levy assets.

These include sequestered assets; corporations acquired through the use of levy money; shares of stocks of corporations; money, assets and investments of the Coconut Industry Investment Fund (CIIF) managed by the United Coconut Planters Bank (USPB); and money, assets and investments managed by CIIF companies and CIIF holding companies.

The Order also mandates the PCGG and other agencies to reconvey and transfer the title of all coco levy assets to the government within 60 days from the effectivity of EO 179.

According to the Order, money and funds constituting the coco levy or accruing from the coco levy assets must be deposited to the Special Account in the General Fund for Coco Levies (Coco Levy SAGF) with the Bureau of Treasury, pursuant to Presidential Decree 1234.

The President also wants these government agencies to take all the steps to implement the Supreme Court decision on the coco levy fund as well as the orders that he will issue in the future.

The Commission for Government-Owned or -Controlled Corporations (GOCCs), in consultation with the Department of Finance, the Office of the Presidential Assistant for Food Security and Agricultural Modernization, and the Philippine Coconut Authority, shall determine if privatizing the coco levy assets would serve the best interest of the government.

These agencies are mandated to provide the President recommendation on the possible privatization and the mode of divestment.

Once the privatization pushes through, all the proceeds must go to the Coco Levy SAGF after deducting reasonable expenses incurred during the process of privatizing the assets.

The Order takes effect immediately upon its publication in a newspaper of general circulation.

In its previous ruling, the Supreme Court said the coco levy fund is public in nature and cannot be used to purchase shares of stocks to be given for free to private individuals.

Thus, the so-called Farmers' UCPB Shares covered by 64.98 percent of the UCPB shares of stock are owned by the government, the Supreme Court said.

The CIIF companies and holding companies, as well as the converted San Miguel Corp. Series 1 preferred shares, totaling 753,848,312 shares, together will all the dividends, are also owned by the government.


The coco levy refers to the levies, taxes, enforced contributions, collections imposed by the government in connection with the sale or purchase of copra, copra resecada, or its equivalent in other coconut products collected from coconut farmers, planters and millers.

Coco levy funds are funds created or sourced from the coco levy, including the Coconut Investment Fund; the Coconut Consumers Stabilization Fund, later renamed as the Coconut Industry Development Fund; and the Coconut Industry Investment Fund. (PCOO News Release)

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