Philippine gov't eyes levy fund to revitalise coco trade

Kristine L. Alave in Manila/Philippine Daily Inquirer
Asia News Network

Manila (Philippine Daily Inquirer/ANN) - Impoverished Filipino coconut farmers cannot wait forever for the Supreme Court to ease their plight.

Secretary Joel Rocamora of the National Anti-Poverty Commission (NAPC) yesterday said the administration was considering borrowing against the sequestered assets acquired with funds from a coconut levy imposed for nine years during the Ferdinand Marcos dictatorship.

Rocamora said the move was necessary as the court was taking ages to resolve the ownership of 24 per cent of shares of stocks in San Miguel Corp. (SMC), which the government froze after the ouster of Marcos in 1986 pending an investigation into whether the portfolio was part of the ill-gotten wealth the dictator and his cronies had amassed.

NAPC had drawn up a 10-billion-peso (US$233 million), five-year "road map" to revitalise the coconut industry, Rocamora said. The first year of the programme could be funded with loans.

"The plan is to borrow off the coco levy," he told the Inquirer. "By June 30, the Aquino administration would be in power for one third of its term. We don't have a lot of time. Whatever programmes we want to do, these have to be felt by the people. We don't want to wait forever," he explained.

Rocamora said Budget Secretary Florencio Abad had floated the idea to him. The Department of Finance has yet to weigh in on this, he said.

Last January, the Supreme Court affirmed a 2004 Sandiganbayan decision that the controversial portfolio, designated in judicial proceedings as SMC-CIIF shares, was acquired under the state-administered Coconut Industry Investment Fund in an elaborate, clandestine scheme involving 14 holding companies, and, therefore, belonged to the government.

Shares value

The high tribunal said this asset should now be used to rehabilitate the industry, wracked by falling harvests because of aging trees and climate change, and to ameliorate the conditions of some 3.5 million coconut farmers and their families comprising a fourth of the nation's population described as the "poorest of the poor".

A motion for reconsideration has been filed by the Philippine Coconut Producers Federation and the case remains pending. The federation is claiming ownership of the bloc in behalf of 1 million unnamed coconut farmers.

An official paper submitted to a Senate committee inquiry put the value of this 24-per cent bloc of 700 million shares of stocks at 85 billion pesos ($1.98 billion), including interests and dividends.

Implementing agencies

A year ago, the Supreme Court, in a decision derided by a dissenting justice as the "joke of the century," awarded another sequestered SMC portfolio, consisting of nearly 500 million common shares valued at 58 billion pesos ($1.35 billion) at 117 pesos ($2.7)per share, to Eduardo "Danding" Cojuangco, current SMC chairman and uncle of President Benigno Aquino III. Oppositors said Cojuangco had borrowed from United Coconut Planters Bank (UCPB), which he then headed, to purchase the shares in 1983, violating a fiduciary trust.

The Aquino government plans to establish an interagency group to manage the assets that will be placed in a trust fund, according to Rocamora. He said no decision had yet been made on how much money should be borrowed against levy funds deposited in UCPB, which has been criticised for granting questionable loans to SMC.

He said poverty intervention programmes would be implemented by his commission and the Department of Social Welfare and Development.

Aside from poverty alleviation projects, the money will be used for fertilising the soil, replacing old trees, and providing capital for agricultural enterprises for small they can diversify their income sources.

Neglected sector

About 3.4 million hectares of the country's farmlands are planted with 340 million coconut trees, making the country the world's biggest exporter of coconut products, according to the Philippine Coconut Authority.

Although the sector is the biggest dollar-earner in agriculture, it is largely neglected. Rural poverty incidence in coconut-producing provinces is 60 per cent.

The commission has identified 609 poorest municipalities in the country of which 493 cultivate coconut.

In the first year of the road map, the funds will go to 153 municipalities in Camarines Sur, Leyte, Albay, Quezon, Sorsogon, Camarines Norte, Lanao del Norte, Northern Samar, Eastern Samar, Davao Oriental and Sarangani.

Militant groups had urged President Aquino to certify as urgent a bill that would establish a trust fund for coconut farmers, fearing that the levy assets would be diverted to finance agrarian reform and the distribution of Hacienda Luisita, which is owned by his family.

The Cojuangco-Aquino clan is seeking 10 billion pesos as "just compensation" for the sugar plantation, which the Supreme Court, in a unanimous decision, in November ordered distributed to its 6,000 farm workers.