Coco levy fund bill

9-nrcrvep Republicof thePhilippines HOUSE OF R-EPRESENTATIYtrS QuezonCity SEVENTEENTHCONGRESS Third Regrlar Session May22,2019 MEMORANDUM FOR

:

TheDeputySecretaryGeneralfor Operations

ATTENTION

:

TheExecutiveDirector PlenaryAffairs Bureau The ServiceDirector Bills andIndex Service

FROM

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TheDepu$ SecretaryGeneralfor CommitteeAffairs

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We aretransmitfingtkee (3) copiesof the.eoornitteeReportsubmittedby theCommittee on AgricultureandFoodon HouseBill No. $ lffi , entitled: "ANACT ESTABLISHING THE COCONUT FARMERS AIID IFIDUSTRY DEVELOPMENT TRUST FUND AND PRO\TIDING FOR ITS MANAGEMENT AND UTILIZATION" in substitution of HouseBill Numbered9150.

Foryourappropriate action.

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DeputySecretary General forCommitteffibs\

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Repubiicof thePhilippines HOUSE OF REPRESENTATIVES QuezonCity

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(9':irfErvEn :r

SEVENTEENT}I CONGRESS Third RegularSession

COMMTTTEE REPORT NO-

lJ21

Submittedby the Comqrlttpgon AgricultureandFoodon MAY2 2 20lg Re:Houseiiil No. 9l I 7 Recommending its approvalin substitutionof HouseBill Numbered9i 50 Sponsors: Representatives GloriaMacapagal-Arroyo andJoseT. Panganiban, Jr.

MadamSpeaker: The Committeeon AgricultureandFoodto which wasreferredHouseBill No. 9150, introducedby Rep.JoseT. Panganiban, Jr.,entitled: *ANACT ESTABLISHING TIIE COCONUTFARMERSAND INDUSTRY DEVELOPMENT TRUST FLIND AND PROVIDING FOR ITS MANAGEMENT AND UTILIZATIO}T' has consideredthe sameand recommendsthat the attachedHouse Bill No. entitled: "AN ACT ESTABLISHING TEE COCONUT FARMERS AND DE\'ELOPMENT TRUST F'UND AND PROVIDING MANAGEMENT AIID I]TILIZATION'

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INDUSTRY FOR ITS ..

be approvedin substitutionof House Bill Numbered9150 with Representatives Gloria Macapagal-Arroyo, JoseT. Panganiban, Jr.,SharonS.Garin,JesusNonatoSacdalan, Anthony M. Bravo,OrestesT. Salon,Peter"Sr.Pedro"M. Unabia,MicaelaS.Violago, Aaiceto'Tohn" D. BertiziII, LeopoldoN. Bataoil,Jose"Pingping'I. TejadaandDaniloE. Suarezas authors thereof.

Chairman

THEHONORABLE SPEAKER HOUSEOF REPRESENTATIVES QUEZONCITY

Republicof thePhilippines HOUSE OF REPRESENTATIVES QuezonCity SEVENTEETH CONGRESS Third RegularSession HouseBillNo.

9197

Introducedby Representatives Gloria Macapagal-Aroyo.JoseT. Panganiban.

Jr.. SharonS. Garin. JesusNonato Sacdalan.Anthony M. Bravo. OrestesT. Salon.Peter"Sr'. Pedro''M. Unabia. Micaela S. Violago, Aniceto ''John" D. Bertiz III. Leopoldo N. Bataoil. Jose "Pingping''I. Tejadaand Danilo E. Suarez

AN ACT ESTABLISHING THE COCONUT FARMERS AND DEVELOPMENT TRUST FUND AND PROVIDING MANAGEMENT AND UTILIZATION

INDUSTRY FOR ITS

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Section L Short Title. |his Act shall be known as the "Coconut Farmersand lndustry DevelopmentTrust FundAct."

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Section 2. Declaration of Policy. It is hereby declared the policy of the Statc to pursue and attain the balanced.equitable.integrated.and sustainable growth and developmentof the coconut industry. Towardsthis end. the State shall adopt the neces-sarymeasuresto immediatelyaddressthe seriousproblems besettingthe coconut industry. protect the socioeconomic well-being of coconut fa.rmers.and ensurethat the benefits due them. especially the poor and the marginalized. under varioris statutes shall be consolidated and their delivery expedited. Any measure or program undertaken in accordanceto this Act shall be deemed complementary to and shall not be a replacementfor existing and potential coconut developmentprogramsalready conductedby other agencies.

Definition of Terms Section 3. Definition of Terms. As used in this Act: a.

Coconut Industry Investment Fund (CIIF) refers to the Fund creared pursuant to PresidentialDecree (PD) No. 1468, which authorizedthe Unird Coconut Planters Bank (UCPB) to utilize the surplus funds from the Coconut Consumers StabilizationFund (CCSF) and the Coconut IndustryDevelopmentFund (CIDF) for investmentsin 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 businessundertakingsrelated to the coconutindustry in all its aspectsand the establishmentof a researchprogram into the commercialand industrialusesof coconut.

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b.

CllF Holding Companies refer to the fourteen (14) holding companies.namely: (l) Anglo VenturesCorporation;(2) ASC Investors.Inc.r (3) Arc hrvestors.

Incorporated; (4) AP Holdings. hcorporatedr (5) Fernandez Holdings.

Incorporated;(6) First Meridian Development.Inc.l (7) Randy Allied Ventures.

Incorporated:(8) Rock Steel Resources.Incorporatedr(9) Roxas Shares.

Incorporated; (10) San Miguel OfficersCorporation.Incorpolated:(11) Soriano Shares.Incorporated;(12) Te Deum Resources.Incorporated: (13) Toda Holdings. Incorporated: and ( 14) Valhalla Properlies Limited.

Incorporated. created by the CllF Oil Mills Group to acquire. hold and manage the shares of stocks of San Miguel Corporation(SMC).

c.

CIIF Oil Mills Group refersto the six (6) CllF companies.namelv: (l) Southern (3) Luzon Coconut Oil Mills: (2) Cagayande Oro Oil Company.Lrcorporated: lligan Coconut Industries. Incorporated: (4) San Pablo Mat'facturing Corporation; (5) Granexport Manufacturing Corporation: and (6) Legaspi Oil Company.Incorporated.acquiredby the UCPB usingthe CllF.

d.

CIIF SMC Block Slrares refer to the thirty-three million one hundled thirtythreethousandand tw'ohr:ndredsixty-six(33.133.266)sharesof stock in SMC. sequesteredby the PresidentialCommissionon Good Govemment (PCGG) in April 1986representing thirty-onepercent(31o%)of the total outstandingcapital stock of SMC.

e.

Converted SMC Series I Preferretl Shares refer to that podion of the CllF SMC Block Sharescovering seven hundredfif.y-threemillion eight hundred forty-eight thousandand three hundredtwelve (753.848.312)preferled shares of stock in SMC representingtw-enty-forirpercent(24%) of the outstanding capitalstock of SMC.

f.

Coconut Farmer refersto: 1. Farmer-ownerof a coconutfarm who: a) Tills the hnd (owner-cultivator)ior b) Does not till the land but has control and supervision over the cultivation of a farm: and 2. A non-owner ofthe coconut farm who is either a:

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?) Leaseholderor tenant who tills or supervisesthe cultivation of the farm; or b) Farm worker or laborer. whether seasonalor itinerant. engaged in the harvestingof the nuts and processingof copra as major meansof livelihood.

Coconut Levy Assets refer to any and all kinds of property"whether real or personal.tangible or intangible.whereversituated.which have been acquired tbrough or otherwise funded by the Coconut Levy Funds. including those assets that may be recoveredin favor of the Govemment.as w-ellas the fruits or income

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derivedtherefrom.includingthose acquiredin exchangeor substitu.ionthereof" including but not limited to the following:

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1. The shares of stock in the UCPB determined to be owned bv the Govemment; 2. The cllF oil Mills Group, J. I he L llt HoldlngL ompanres: 4. The Converted SMC Series l PreferredShares;and 5. RemainingCIIF SMC Block Sharesor the proceedsof their sale.

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h.

Coconut Levy Funds refer to various funds generated from levies. taxes. charges. and other fees exacted or imposedpur'l-lant to or in connection with the sale of copra rececada or its equivalent in other coconut products. and collected for re most part from coconut farmers.planters"millers. refiners. processors.exporters.dessicators.and other end users of copra rececadaor its equivalentin other coconut products.Theseshall refer to any ariciail ofthe following: '1.

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2.

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5.

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The Coconut InvestmentFund createdunder Republic Act (RA) No. 6260: The Coconut Consumer Stabilization Fund. later renamed as the Coconrit StabilizationFund.createdunderPD No. 276: The CoconutIndustryDevelopmentFundcreatedunderPD No. 582: The CoconutIndustry InvestmentFund created pursuantto PD No. 1468: and The CoconutReserveFund underPD No. 1468and PD No. 1842.

Investment Guidelines refer to the investmentmanagementguidelines. rules" procedures.and policiesto be formulatedb1-theCoconutFarmersand Industry TrustFund CommitteecreatedunderSectionl1 of this Act. hereinafter referred to as the Committee. and as may be amendedfrom time to time. which shall provide the parameters for investmentsof the Trust Fund or any poltlcn thereof. and shall include. among others.assetallocation.criteriafor selectronof fund managers. required income from the fund. and other investment management threshold requirements.

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Trust Income refers to the income. interest eamings- and other monetar) benefits realized by and accruing to the Trust Fund or any porlion thereof.

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Trust Principal refers to: 1. The initial Trust Principal composedof dividendsdeclared.paid. or issued on the ConvertedSMC Series1 Preferredl,harestthe proceedsfrom the redemptionof the ConvertedSMC 1 PrefenedShares;all incomeor interest derivedtherefromas of the effectivityof this Act: or any othercashCoconut Levy Asset depositedin the Bureau of the Treasury(BTr) and the UCPB as administratorof the CllF; 2. Any and all proceedsof privatization of the Coco Levy Assets remitted thereto by the Privatization and ManagementOffice (PMO) organized under Aticle Ill of ExecutiveOrder(EO) No. 323 (s. 2001); and

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3, Proceedsof privatizationof any or all propertiesor assetsconveyed by any person. group. or entity to the Committee. from tin.re to time" as provided in Section 8 hereof.

Chapter II Audit and Reconveyance ofCoconut Leqy Assets Section 4. Audil and Inventory of Coconut LevT-Assets. Upon the effectivity of this Act. the PCGG shall conducta completeaccountingand inventoryofthe CoconutLevy Assets as well as the investments.disbursement.and expendituresrelating 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 Reporton the Accountingand Inventory of the Coconut Ler.y Assets prepared and submitted by the PCGG for the purpose of. among others. determiningcompleteness of said inventory.the existenceol the subjectassets.establishing the reasonableness of the asset valuation,and tracingof the flow of the coconut levy fund.

The COA shall submit to the PCGG its initial audit reporl. the reviewed Rul,ori on the Accountingand Inventory of the Coconnt Levy Assets.and the valuationas well as the empiricalbasisandmethodologies employedfor saidvaluation.togetherwith its observations for revisionand compliance.within ninety (90) days from submissionofthe Reporton the Accounting and Inventory ofthe Coconut Levy Assets. However. if necessary.further audit may be undertakenafter the initial audit.

The PCGG shall then incorporatethe COA's observationsfor revision and compliancein the Report on the Accounting and Inventory of the Coconut Levy Assetsand submit the revised versionto the COA w-ithinthirty (30) days.subjectto reasonable time extension.from the submissionof the COA's observations for revisionand compliance.

After determiningthat the observations for revisionand compliancewere incorporatedin the revisedReporl on the Accor:ntingand Inventoryofthe CoconutLevy Assetsby the PCGG. the COA shall submitthe final versionof the Reporton the Accountingand Inventor,vof the CoconutLevy Assetsto the Committee.as well as the empiricalbasisand nr.:thodologies employedfor the valuatron.

The Committee shall publish the same.within fifteen ( 15) days from its receipt of the final versionofthe Reporton the Accountingand Inventoryofthe CoconutLevy Assets.in at least two (2) newspapersof national circulation.

Section 5. Reconveyanceof Coconut Levy,4sse1s.knmediately upon the eflectivity of this Act. the PCGG. the government representativesto the boards of sequestered/surrendered corporations.and any governmentagency or personin possession.custody. control. or administeringany Coconut Levy Asset shall perform or cause the performance of the following: a. b. c.

Reconveyance of the title of suchasset to the Republicof the Philippines: Delivery of all stock certificatesand other evidenceof ownershipto the BTr fol safekeeping;and Depositall cashassetsinthe Trr"rstFund.

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Anl provision of the law to the contrary notwithstanding.the BTr and the UCPB shall directly remit the initial Trust Principal to the Trust Fund4Protided. That the BTr shall transferthe remainingcashassets from the specialaccountin the GeneralFundwithin a period oI llve {5 } ) earsin equalarnoun ts each1ear.

The COA shall conduct an audit to determine compliance with pertinent laws. r'ules.and regulationson reconveyance ofthe Coconut Levy Assetsto the govemment.

The COA shall also conduct the regular financial and complianceaudit ofthe Coconut Levy Assets.and submit the annual audit report thereon as mandatedby the govemment ar-rditing rulesandregulations. until saidassetsareprivatized.

Chapter III Coconut Farmers and Industry Development Trust

Fund

Section 6. The Coconut Farmers and Industry Developmet:t Trust Fund. Tl.rereis l.rereb1 createda trust fund to be maintainedfor a period not to exceedthirty (30) yearsol.until the fr"rndis fully utilized to be known as the Coconut Farmersand Indr-lstr)'Development Trust Fund"hereinafterrefenedto as the Trust Fund. which shall consistof the Trust Principal and the Trust Income.No portion of the Trust Fund shall be derivedfron-rthe General Fnnd of the National Government;ProvideclTh . any unutilized balancein tl.reTrust Fund after thirty (30) yearsshall revert to the GeneralFund ofthe National Government.and shall be capitalized.managed.utilized. and accountedfor in the manner provided in this Act. Nothing in this Act shall be understoodto preventor prohibit any person.group. or entity fron conveyingto the Committeeother propertiesand/oradditionalassetseither for the use of the coconutindustry or for the purposesof privatization. in w-hichcasethe proceeds of suchprivatization shall form part ofthe Trust Fund.

Section 7. Purpose of the Trust Funtl. The Trust Fund shall be used exclusively for the ultimate benefit of coconut farmers and for the developmentofthe coconut industry. as embodiedin the Coconut Farmers and Industry DevelopmentPIanto be prepareclprirsuant to Section21 hereof.

Section 8. Capitalization of the Trust Funrt. All assetsand/or properriesderived from all coconut levy recoveredassetsland all dividends.interestearnings.and incomesthat are availableripon the effectivity of this Act shall form pafi ofthe initial capital of the Trust Fund. The Trust Fund shall thereafter be augmented with all the proceeds of privatization/disposition of the Coconut Levy Assets remitteddirectlytheretoby the PMO in accordancewith this Act. including any and all forms of income. interests"earnings. yields. or any monetary benefit derived therefrom prior to the privatization/disposition of theseCoconut Levy Assets.

In order to ensurethe enduring characterof the Trust Fund. the Principal thereof shall be augmentedby grants. donations. and other lawful transfers by public or private entities.

At the end of the year, all unspentportion ofthe trust income for the year shall accrueto the Trust Principal.

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Section 9. Management and utilization of the Trust Fund. The Trr-rsrFund shall be available and may be utilized only for the purpose for which it was created and upon authorizationof the Committee.subjectto the following conditions:

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a,

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b.

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c.

Ten Billion Pesos(PHP 10.000.000.000.00) of the initial trustprincipai. w.hich shall be known as the Jumpstart Fund. may be used within two (2) years commencing from the approval of the plan by the presidentto jumpstart the developmentof the industry: All disbursementsshall only be made on the basisof the funding requircment of the program, activity. or project by the Committee as provided in the Coconut Farmersand Industry DevelopmentPlan; profidetl. That an amual allocation of at leastFive Billion Pesosshall be releasedfor the programsand projectsprovided under this Act: and The ceiling for expensesof the Committee for the administration. monitoring. evaluation.information services. and other necessaryactivities for the effective performanceof its functionsunderthis Act shallbe piovidedin the Implementing Rulesand Regulations underSection26 ofthis Act.

All releases from the Trust Fund approvedby the Committeeshall be releaseddirectly to the implementing agencies;Provided rhat. coconut pruductivity and developmental programsand projects shall be implementedby the pliilippine Coconut Authority (pcA) created under PD No. 232 (s. 1973).as amendedby pD No. 146g(s. l97g). orher coconur productivity and developmentalprogramsand projects implementedby other aFenciesshall be closelycoordinatedwith the pCA. Disbursements or expenditures by the concemedimplementingagenciesin violation of the purposeof the Trust Fund shall be void and shall subject the ening officials and employees to disciplinary actions in accordancewith existing laws. and to appropriatecriminal action under existing penallaws.Disbursements of the funds shouldbe donein accordance witl.rthe GovernmentAccountingManual and all other relatedlaws. rules. and resulatrons.

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Section 10. Designation of the Bareau of the Trensury as Depository of the Trust Funtl.

Any law'to the contrary notwithstanding.the BTr is hereby designatedas the depository ofthe Trust Fund.which shall: a. b. c.

d.

Hold and account the Trust Fund in the manner set forth by the Committee; Releasefunds directly to the implementingage'cies 'pon the instmctionof the Committee: When so appointedby the Committee. act as a fund managerof the investments ofthe Trust Fund with the authority and accountabiliq/ as that of a private fund manager: and Perform other tasks as may be authorized by the Committee.

The Commirreemay designatealternative depositorybanks w'hich shall perfom the same functionsasthat ofthe BTr.

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Chapter IV C o c o n u tF a r m e r sa n d I n d u s t r y D e v e l o p m e nat n d I n d u s t r y Committee

Trust

Fund

Section 11. Creation of the Coconut Farmers and Induslry Development Trust Funtl Committee. The Coconut Farmers and Industry Developn ent Trust Fund Committee is hereb"vcreatedunderthe OP. The Committee shall have the following powers and fi-mctions: a.

Coordinateand monitor the implementation of the CoconutFamers ar.d Industry DevelopmentPlan; b. Approve any allowabledisbursement out of the Trust Fundpursuantto Section 14 of this Act: C. Formulatethe InvestmentGuidelinespursuantto the allowable investmentstated in Section28 of this Act: d. Appoint a fund manager. if necessary.to handle the investmentof the Trust Principal: e. Identifu the Coconut Lery Assets that will be privatized. retained. or abolishedand submit its recommendationto the Presidentfor approval: f.

Approve the marketing and disposition program for the Coconut Levy Assets approvedfor prir atizarion: After obtainingthe approvalofthe President.authorizethe saleand other mode S of privatization of Coconut Levy Assetsapprovedfor privatization; h. Authorize the rehabilitation of Coconut Ler'1' Assets approved lbr privatizationpendingactualdisposition; i.

Submit repofts and recommendationsto the Presidentin connectionwith its functions under this Act: and Exercise such other incidental powers and functions as may be necessary J. to attainthe objectivesofthis Act. The PCA shall provide Secretariatsupport to the Committee.

Section 12. Composition. The Committee shall be composed of the following: a.

Six (6) representativesfrom the governrnent who shall be serving in ex o.lrtcio capacities: 1. Secretaryof the Departmentof Agriculture (;)A). as Chairperson: 2. Secretaryof the Departmentof Finance(DOF). as Vice Chairperson; 3. Secretaryofthe DepartmentofTrade and Industry (DTI); 4. Secretaryof the National Economicand DevelopmentAuthoritv INEDA) : 5. Administrator of the PCA; and 6. A representativefrom the Office ofthe ExecutiveSecretary.

Three(3) representatives b. from the coconutfarmers' organizations.one ( 1) from Luzon. one (1) from Visayas" and one (1) from Mindanao. rlho have considerableexperience.substantialmembership"and reputabletrack records. c.

Two (2) representativesfrom the coconut industry sector rlho have considerableexperienceand reputabletrack records.

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The nominees of the coconut farmers' organizations shall be validatedand shonlisted by the PCA. The list ofnominees,which shallnumberat leastthree(3) per islandgroup.shall be submittedto the President not later than thirty (30) days following the effectivity of this Act. The representativesof the coconut industry sectorshall be appointedby the President from a list o.fnominees.which shallnumberat leastsix (6). submittedby the PCA. The governmentrepresentativesin the Committee shall serweonly during their respective terms in office. The representativesfrom the coconut farmers' organizations and the coconut industry sector shall eachhold a term of three (3) years. unlesssooner removed for cause.and may be reappointedonce.Any ofthe represerrtativesshall continue to hold office until their successoris appointed: Provided That. any appointmentto filI a vacancy in the Committeeshall be only for the unexpiredterm.

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Section 13.-Er OlJicio Alternates. The e-t offcio membersof the Committeemay' designate their respectivepermanentaltemateswho shall be the officials next-in-rankto them and their actsshallbe considered actsoftheir principals.

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The Chairperson. if unavailable. may designate the Vice Chairperson to convene the Committeeand presideover the Committee's meeting on behalf of the Chairperson.

Section 14. Meetings of the Committee. The Committee shall meet once a month. or as often as deemed necessaryand expedientto dischargeits responsibilities.The presence.of at least a majority of the members present at a meeting at w-hich a quorum exists shall be adequatefor any decisionby the Committee:Provided. That the approval of at least a majority of the members of the Committee shall be required on matters involving the IOllowlns: a. b. c.

Any single disbursementof funds involvir.rgmore than Fifty Million Pesos(Php 50.000.000.00); Any proposedinvestmentinvolving morethan One HundredMillion Pesos(Php 100.000.000.00): and AIt dispositionsor privatizationproposals.

Provided.further. That the disbursementsrequiring the approval of at least a majority of the membersof the Committeemay be subjectto the President'sdisallowance.

Section 15. Compensationof the Members of the Committee.The membersof the Committee may be entitledto per diemsand reimbursableexpenses. in accordancew'iththe COA rules and regulations.

Section 16. Obligations of the Members of the Committee. The members of the Committee shall act with due care. diligence. skill. and good faith in all its dealings with the Trust Fund and the Coconut Levy Assets. They shall avoid conflicts of interest and declare before the Committee any interestthey may have in any pafticulai inatter.

Where a member of the Committee receivesany profit or benefit by virtue of his office. including acquiring shares in corporations that forrn part of the Coconut Ler,y Assets. using the CoconutLevy Assets for one's benefit.receivingcommissionon contractsfrom the Coconut Levy Assets. or taking advantageof corporateopportunitiesinvolving the Coconut Levy Assets. all such profits or benefits shall be retumed to the Trust Fund

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wltlior{ prejudiceto any administrative.civil. or criminal action against such me'nber. This provision shall be applicable notwithstandingthe fact that such member of the Committee used one's own funds in the venture.

The Committee shall recommend to the President the removal and reolacement of the member who performs such acts.

Section 17. Executive Director of the Committee. The administmtor of the PCA shall be appointedas Executive Director of the Committee.

The Executive Director shall have the following pow-ersand functions: a. b. c. d. e. f.

Executepolicies and administerthe programsapprovedor promulgatedby the Committeel Monitor the progress of the implementation of the Plan and submit periodic reportsto the Committeel Preparean annual report on the activities of the Committee at the ciose of each fiscal year and to submit a copy thereof to the Presidentand Congress: Keep and maintain official records and reports of the proceedings of the Committee; Administeroathsin all mattersfalling within the jurisdiction of the Committee; ano Exercise such other duties as may be vested by the Committee that are consistentwith the provisionsofthis Act.

Section 18. Cooperation with the Committee. The Committee may also call upon any department. bureau. office. agency. and instrumentality o'i the Government. including Govemment-Owned (GOCCs).for any assistance o r -ControlledCorporations it may need in the dischargeof its functions and responsibilities as well as in the implemer.rtationof its programsand projects.

32 Section19.Accounting and Auditing. The Committee shall maintain records ar-d accounts 33 of all investments. income. receipts. disbursements.and other transactionsrelating to the 34 management,administration. and disposition ofthe Trr"rstFund. These recordsand accounts 35 shall be maintained in accordancewith existing accounting and auditing laws. rules, and 36 regulations.The Trust Fund shall be audited by the COA. 37 38 Section 20. Legal Counsel. The Solicitor-General shall be the ex fficio 39 counselof the Committee on lesal matters.

40 4'J42 Chapter V 43 Coconut Farmers and Industry DeveloqrmentPlan 44

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Section 21. Preparation of tlte Coconut Farmers and Industry Development PIan. An Ad Hoc Committee is hereby created to be composed of technical officials fiom the Departmentof Agriculture. the Department of Agrarian Reform" t h e Departinent of the Interior and Local Govemment.the Department of Finance. t h e Department of Public Works and Highways. t h e Department of Science and Technology.the Department of

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Social Welfare and Development. Department of Health. the Depaftment of Trade and Industry. the Department of Budget and Management. the National Economic and DevelopmentAuthority.the NationalAnti-Poverly Commission.t h e TechnicalEducation and Skills DevelopmentAuthority.the Land Bank of the Philippines.and the D:l'elopment Bank of the Philippines.

In addition.twelve( 12) representatives from the coconutfarmers' organizationscomposed of four (4) from Luzon, four (4) from Visayas,and four (4) from Mindanao: and four (4) representatives from the different coconut industry sectors who all have considerable experience. substantial membership. and reputable track records. shall also be members of the Ad Hoc Committee.

The nominationprocessofthe representatives from the coconutfarrnersorganizationsand the different coconut industry sectors shall be the same as that in Chapter IV. Section 12 of this Act: Provided, That" the list of nomineesfrom the coconut farmers' organizatior.rs shall number at least twelve (12) per island group: Provided. also, that eight (8) of the twelve (12) representatives lrom the CoconutFarmers'Organizationsmust not ltave more than five (5) hectares of coconut farm landholding:. Provided Further, TJ1ot.the list of nomineesfrom the coconutindustry sectorshall number at leasttwelve ( 12).

The Administrator of the PCA shall act as the Ad Hoc Committee'sChairperson.

The membersof the Ad I1oc Committee shall be compensatedin the samemanner as that of the CommitteeunderChapterIV. Section15 of this Act. The Ad lloc Committee. in consultationwith coconut farmers'organizations.industrl associations. civil societyorganizations. academe-concernedgovernmentagenciesandother stakeholdersin the coconut industry shall indicate in an integrated coconut industry strategy the policies for the developmentand rehabilitation of the coconut industr\ . It shall prepare every five (5) years,or as determinedby the Comr.rittee.a medium tenn plan of programs. activities. and projects. which shall be funded out of the Trr"rstFr"rndand which shall be know'n as the Coconut Farmersand Industry DevelopmentPlan.hereinafterreferred to as the Plan. The Plan shall be consistentwith the PhilippineDevelopmentPlanand shall be subjectto mandatoryreviewevery year.

The Administrator of the PCA shall submit an amual report to the Committeeon the statusof the implementationof the PIan and its correspondingprograms/projects.

The PCA shall commissionan independentstudy on the third year. or any other date as may be determinedby the Committee.to assessthe impact of the programsand projectsin the Plan.

The resr-rlts ofthe independentstudy shall be one ofthe basesto updatethe Plan. The conduct ofthe studyshallbe chargeable to the regularfundsofthe PCA. In the formulation of the Plan, the Ad Hoc Committee shall be guided by the following objectives: a. b.

Increasein the income of coconut farmers and increasecoconut productilitl includinsintercropping and livestock-raisine: .Establishmentofcoconut-basedenterprisesincluding integratedprocessingof coconutproductsand downstreamproducts: 10

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c. d. e.

Rehabilitation and modemization of the coconur industry towarcls global competitivenessl Provisionof timely and critical supportto coconutfarmersorganization:and Establishmentof social protectionprogramsthat directly benefit the coconut fatmers and farm workers, in case these social protection progritms are not funded by an appropriations law or any other special laws. or where fr-rndin-eis insufficient. The social protectionprogramsshall include: (1) social services such as life, medical, and accidentinsurancecoverageof the coconut farmers and farrn w-orkers;(2) scholarshipsfor the benefit of the deserving descendants ofthe coconut farmersand farm workers: and (3) livelihood programs.

The Plan shall provide an indicative funding requirement or allocation for the implementationof any and all of the programsand projects.which funding or allocation shall be itemized or broken down on a proj ect-to-project basis: Provided. That (a) for projectswhich are recuning, or to be implementedon a regularbasis.the allocationshall indicatethe annualfund that may be requiredto implementthe project:and (b) for projects that are to be irnplementedor concluded within a period of time. the allocation shall indicatethe total fund that may be required for the implementationof the whole project. itemized accordingto the phasesor stagesof the project. The Plan shall also include the contributionofthe regularbudgetofthe PCA. Within ninety (90) days from the appointment of all farmer-representativcs and the industry representatives,the Plan shall be submitted by the Ad l1oc Committee to the Committee which shall, in turn. submit the Plan to the President.as endorsedby the Economic Development Cluster, for approval.Immediately upon its approval. the Plan shall be returnedto the Committee for the disbursementof funds in accordancewith the provisions of this Act. Any amendmentto the Plan shall require the appror,al of the President,as endorsedby the Economic DevelopmentCluster.

Ifthe Presidenthas any objectionor any amendmentthereto.the Presidentshall notift the Committee within thirty (30) days from receipt thereof: otherwise. the Plan shall be deemedapproved. chapter vI Privatization of the Coconut Lelry Assets Section 22. Privatizntion of Coconut Levy Assets. Pursuantto the national policv on the efficient and transparentprivatization of govemment assets(including GOCCs) which are unnecessaryor inappropriatefor the govemmentsectorto maintain: a.

b.

The GovemanceCommissionfor Govemment-Ownedor -Controlled Corporations shall determinewhether it is to the best interestof the Goverment to privatize any non-cashCoco Levy Asset and recommendto the Presidentthe privatization and the mode of the divestment.taking into account the need to generatemaximum cash recoveryand the implications ofsuch divestmenton rhe coconutindustry.

The PMO shall be the dispositionentity for non-cashCoconutLevy Assetswhich shall have been approvedfor divestmentby the Presidentand shall expeditiously sell. alienate.or disposeofthe sameupon securingthe favorablerecommendation of the PrivatizationCouncil pursuantto EO No. 323 (s. 2000) and other relevant laws.orders.rules.andregr:lations. and the prior approvalofthe Committee.In the 11

1 2 3 4 5 6 7 8 9 10 11 12 13 1'4 15 17 L8 19 20 2L 22 23 24 25 26 27 28 29 30

c.

dischargeof this additional mandate.the PMO is hereby empoweredto implement the actualmarketing/dispositionprogram for the non-cashCoconutLevy Assets.to executeand deliver.on behalfofthe Govemment.the deedsofsale"contracts.and other instrumentsas may be necessaryor appropriareto convey title to such assets to take possessionofand conservethe non-cashCoco Levy Assetstransferredto it. and engageextemal expertise as may be necessaryin the fulfillment of its tasks r"lnderthis Act. Any saleand other rnodeofplivatization shall not be consideredfinal unless favorably recommendedby the Privatization Council and apprcved by the Committee.

The PMO shall. within three (3) months from the closureof its books at the end of eachfiscal year. submit a comprehensiveannualrepot to the President.through the Privatization Council. on the status of its privatization efforts and its disposition programfor the non-cashCocoLevy Assets.which reportshallincludea description ofthe assetsprivatized and disposedof. the purchasers.the considerationreceived. and the agreedterms ofpayment.

Section23. Proceedsfrom Privatization. All proceedsand receiptsor revenuesarising out of or in comectionwith the privatizationof the CoconutLevy Assetsshall be depositedto the Trust Fund.after deductingreasonableexpensesactually. directly. and exclusivelyincuned by the PMO in comection w-ithsuchprivatization as statedundei Section22 hereof.

Section 24. Allowable Investment. The Committee shall managethe Trust Principal with the skill. care. pntdence.and diligence necessaryunder the circumstancesthat a pr.ldent person acting in like capacityand familiar w'ith such matterswould exercisein the conductof an entetpriseof a like characterwith similar aims. Pursuantthereto and in line with the basic principles of safety.growth. and liquidity. the Trust Principal shall only be investedrn any or all ofthe follow-ing: a.

II

32 33 34 35 36

b.

37 38 39 40 41, 42 43 44 45 46 47 48 49 50

C.

Bonds.securities.securities.promissorynotes.or otherevidenceof indebtedness ofthe Govemmentofthe Phitippines.or in bonds.securities. promissorynotes.and other evidence of indebtednessto which fr-rll faith. credit. and r"rnconditional guarantee ofthe Republicofthe Philippinesis pledged: Bonds. securities.promissory notes. or other evidence of indebtednessof government financial institutions or govemment corporations with acceptable credit or guarantee,Proyitled, That sLrchinvestmenisshall be subjectto a ceiling to be fixed by the Committeein the implementingrulesandregulations;and Depositsand loans and/or investmentsin any domesticbank doing businessin the Philippines and in good standingw-iththe Bangko Sentralng Pilipinrs: Provided.

Thcl in caseof such deposits.these shall not exceedat any time the unirnpaired capital and surplus or total private depositsof the depositorybank. whichever is smaller: Provided Further. That the bank shall have been first designatedas a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas; Provided Finall1,. That slch investmentsshall be subjectto a ceiling to be fixed by the Committee in the implementingrules and regulations.

7?.

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Chapter VII Final Provisions Section25. SuppletoryApplication of Republic Act No. 10149 and Executive Order No. 323.

In the interpretation ofthe provisionsofthis Act. the provisionsofRA No. 10149.otherwise known as the "GOCC GovemanceAct of 2011." shall apply suppletorily. EO No. 323. entitled. '-Constitutingan Inter-AgencyPrivatizationCouncil and Creatinga Privatizationand Management Office under the Department of Finance for the Continuing Privatization of Govemment Assetsand Corporations."shall also apply suppletorily.

Section26. Implementing Rules and Regulations. Within thirty (30) daysfrom the date of the constitution of the Committee,it shall formulate and promulg..tethe rules and regulationsfor the proper implementationof this Act. in consultationw-iththe PMO. Section 27. Congressional Oversigltt. The Congressional Oversight Committee on Aglicultural and Fisheries Modemization shall exercise oversight functior's over the implementationof this Act. The financial review of the program in relation to its pertormance indicators shall be subject to the oversight functions of the Joint CongressionalOversight Committeeon Public Enterprises.

Section 28. Separability Clause. If any provision of this Act is declared invalid or unconstitutional.the other provisionsnot affectedby suchdeclarationshall remain in full force and effect.

Section 29. Repealing Clause. AII laws. executive and administrative orders. rules and regulationsinconsistentwith this Act are herebyrepealedor amendedaccordingiy.

Section 30. Effectivity. This Act shall take effect fifteen (15) days after its publication in the Official Gazetteor in a newspaperof generalcirculation.