Executive Order No. 180, s. 2015; ADMINISTRATIVE GUIDELINES FOR THE RECONVEYANCE AND UTILIZATION OF COCO LEVY ASSETS FOR THE BENEFIT OF THE COCONUT FARMERS AND THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND FOR OTHER PURPOSES

See - Executive Order No. 180, s. 2015 | Official Gazette of the Republic of the Philippines

MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER NO. 180

PROVIDING THE ADMINISTRATIVE GUIDELINES FOR THE RECONVEYANCE AND UTILIZATION OF COCO LEVY ASSETS FOR THE BENEFIT OF THE COCONUT FARMERS AND THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND FOR OTHER PURPOSES

WHEREAS, Presidential Decree (PD) No. 755 mandated the acquisition of a commercial bank for the benefit of the coconut farmers (now the United Coconut Planters Bank, “UCPB”) through the use of the Coconut Consumers Stabilization Fund (CCSF) and the distribution, for free, of the shares of stocks in UCPB to coconut farmers;

WHEREAS, pursuant to Section 9 of PD No. 1468, the Philippine Coconut Authority (PCA) was mandated to ascertain the amount of collections out of the CCSF and/or the Coconut Industry Development Fund (CIDF) which may be treated as surplus, and subsequently this ascertained surplus came to be known as the Coconut Industry Investment Fund (CIIF);

WHEREAS, UCPB was authorized under PD No. 1468 to utilize the CIIF in making investments in the form of shares of stocks in corporations organized for the purpose of engaging in the establishment and operation of industries and commercial activities and other allied business undertakings;

WHEREAS, pursuant to the foregoing mandate, and Letter of Instructions (LOI) No. 926 (s. 1979), UCPB acquired six coconut oil mills corporations using the CIIF (collectively, the “CIIF Companies”);

WHEREAS, the CIIF Companies thereafter acquired or organized fourteen holding companies (collectively, the “CIIF Holding Companies”);

WHEREAS, the CIIF Holding Companies later acquired shares of stock of San Miguel Corporation (SMC);

WHEREAS, the Supreme Court held, in Philippine Coconut Producers Federation, Inc. (COCOFED), et al. v. Republic of the Philippines, et al. (G.R. Nos. 177857-177858 and G.R. No. 178193), and Republic of the Philippines v. Sandiganbayan, et. al. (G.R. No. 118661), that:

1. Coconut levy funds are in the nature of taxes;
2. Coconut levy funds cannot be used to purchase shares of stocks to be given for free to private individuals, and thus the so-called Farmers’ UCPB Shares, covering 64.98% of the UCPB shares of stock, are owned by the Republic of the Philippines; and
3. The CIIF Companies, the CIIF Holding Companies, and the Converted SMC Series 1 Preferred Shares totaling 753,848,312 shares together with all dividends, are owned by the Government, and to be used only for the benefit of the coconut farmers and for the development of the coconut industry;

WHEREAS, PD No. 1234 requires that all income and collections for special funds authorized by law, including the Coco Levy Funds, shall be remitted to the Treasury in the General Fund of the State but shall be treated as Special Accounts in the General Fund and shall be released to the implementing agencies subject to the approval of the President; and

WHEREAS, without prejudice to other actions as may be directed by the President from time to time, it is necessary to prescribe administrative guidelines for the reconveyance and utilization of the Coco Levy Assets already declared by the Supreme Court as owned by the Government, to ensure that Coco Levy Assets will only be utilized for the benefit of the coconut farmers, and the Philippine coconut industry.

NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Philippines, by virtue of the powers vested in me, do hereby order and direct:

Section 1. Reiteration of Policy. All Coco Levy Funds and Coco Levy Assets reconveyed to the Government, whether voluntarily or through lawful order from a competent court, and all proceeds of any privatization of the Coco Levy Assets, shall be used solely and exclusively for the benefit of all the coconut farmers and for the development of the coconut industry.

Any disposition and utilization shall be guided by the following objectives:

1. Improving coconut farm productivity, developing coconut-based enterprises, and increasing the income of coconut farmers;
2. Strengthening coconut farmers’ organizations; and
3. Attaining a balanced, equitable, integrated, and sustainable  growth, rehabilitation and development of the coconut industry.

Section 2. Definition of Terms.

2.1 Coconut Levy shall refer to the levies, taxes, enforced contributions, collections, assessments, or exactions imposed by the government pursuant to or in connection with the sale, delivery or purchase of copra, copra resecada, or its equivalent in other coconut products, and collected for the most part from coconut farmers, planters, millers, refiners, processors, exporters, desiccators and other end-users of copra resecada or its equivalent in other coconut products, under, but not limited to, the following:

1. Republic Act No. 6260, otherwise known as the Coconut Investment Act;
2. PD No. 276 (s. 1973), entitled “Establishing a Coconut Consumers Stabilization Fund;”
3. PD No. 582 (s. 1974), entitled “Further Amending Presidential Decree No. 232, as amended,”
4. PD No. 961 (s. 1976), entitled “An Act to codify the laws dealing with the development of the Coconut and Other Oil Palm Industry and for other purposes;”
5. PD No. 1468 (s. 1978), entitled “Revising Presidential Decree 961;”
6. LOI No. 926 (s. 1979);
7. PD No. 1841 (s. 1981), entitled “Prescribing a system of financing the socio-economic and developmental program for the benefit of the coconut farmers, and accordingly amending the laws thereon;” and
8. PD No. 1842 (s. 1982), entitled “Amending certain provisions of Presidential Decree No. 1841, and creating a Coconut Reserve Fund;”

2.2 Coco Levy Funds shall refer to all the funds created or sourced from the Levy, including, but not limited to, the Coconut Investment Fund (“CIF”), the which was later renamed as the Coconut Industry Stabilization Fund, the CIDF, the CIIF.

2.3 Coco Levy Assets shall refer to the money, assets or properties, whether real or personal, tangible or intangible, wherever situated, arising from or otherwise funded by or acquired through the use or by means of any of the Coconut Levies or the Coco Levy Funds, directly or indirectly, including but not limited to shares, rights, and interests, whether vested, contingent, expectant, choate or inchoate, and any and all fruits, income, interest, or profits derived from these assets including those acquired in exchange or substitution thereof.

2.4 Roadmap shall refer to the Integrated Coconut Industry Roadmap and the Coconut Roadmap for Coco Levy, to be developed by the PCA for the approval of the President.

Section 3. Actions to Preserve, Protect and Recover Coco Levy Assets. The Office of the Solicitor General (OSG), the Presidential Commission on Good Government (PCGG), and any other concerned government agency shall, under the general supervision of the Secretary of Justice, file the proper pleadings or institute and maintain the necessary legal actions to preserve, protect, or recover the Government’s rights and interests in the Coco Levy Assets and to prevent any dissipation or reduction in their value.

Section 4. Transfer and Reconveyance of Coco Levy Assets to the Government. Pursuant to the Decisions of the Supreme Court in Philippine Coconut Producers Federation, Inc. (COCOFED), et al. v. Republic of the Philippines, et al. (G.R. Nos. 177857-177858 and G.R. No. 178193), Eduardo Cojuangco, Jr. v. Republic of the Philippines (G.R. No. 180705), Republic v. Sandiganbayan (G.R. No. 118661), Republic of the Philippines v. COCOFED (G.R. Nos. 147062-64), the PCGG, the Bureau of Treasury (“BTr”), the Governance Commission for GOCCs (“GCG”), the OSG, the government representatives to the boards of sequestered or surrendered corporations, and any government agency having any Coco Levy Asset in their administration, authority, custody or control, shall perform or cause the performance of the following:

4.1 Within sixty (60) days from the effectivity of this Order, reconvey and transfer title to the Republic of the Philippines over the Coco Levy Assets, including but not limited to the following:

1. the shares of stock in UCPB determined to be owned by the Government;
2. the shares of stock in the CIIF Companies and the CIIF Holding Companies;
3. the Five Million Five Hundred Thousand (5,500,000) SMC shares paid by SMC and UCPB to and registered in the name of PCGG as arbitration fee on or about 22 March 1999 (“PCGG SMC Shares”).

4.2 Within sixty (60) days from the effectivity of this Order, deposit money and funds constituting the Coconut Levy or accruing from the Coco Levy Assets, in the Special Account in the General Fund for Coco Levies with the BTr pursuant to PD No. 1234, including, but not limited to, the following:

1. With respect to the Converted SMC Series 1 Preferred Shares:
   i. All dividends declared, paid or issued after 17 September 2009;
   ii. The proceeds from the redemption on 5 October 2012; and
   iii. Income, interest, or profits derived from these assets;
2. With respect to the PCGG SMC Shares:
   i. All dividends declared, paid or issued since 22 March 1990;

4.3 Take any and all steps, and perform any and all acts necessary to implement the Supreme Court Decisions, and other lawful orders of the courts, as may be ordered from time to time by the President.

Any and all other Coco Levy Assets that are or shall hereinafter be determined by final judgment to be owned by the Government, together with any and all fruits or income derived therefrom, including those acquired in exchange or substitution thereof, shall likewise be conveyed to or deposited in favor of the Government, and in accordance with this Section.

Section 5. Dissolution of CIIF Holding Companies. The BTr, GCG, OSG, the government representatives to the boards of sequestered or surrendered corporations, and any government agency having any Coco Levy Asset in their administration, authority, custody, or control, shall herafter dissolve or cause the dissolution of the CIIF Holding Companies pursuant to existing laws, provided that, all the remaining money and assets of the CIIF Holding Companies after its dissolution shall be transferred, deposited, or delivered to the Government in accordance with the foregoing provisions.

Section 6. Approval of Roadmap. The PCA, in coordination with the Office of the Presidential Assistant for Food, Security, and Agricultural Modernization, is hereby directed to develop and submit the Roadmap, for the approval of the President.

Section 7. Funding Source. The initial funding for the Roadmap shall be sourced from the money and funds constituting the Coconut Levy and Coco Levy Assets.

The initial funding shall be released upon approval of the Roadmap by the President, and upon compliance with all existing applicable laws and budgetary, accounting, and auditing rules and regulations.

Section 8. Utilization of Funds. The funds, once released, shall be utilized by the PCA together with the government agencies involved in the Roadmap only for the purpose for which such funds have been allocated and released, and in all cases only for the benefit of the coconut farmers and for the development of the coconut industry.

The PCA shall prepare a monthly cash program and shall render an annual report to the President, which shall be considered in the preparation of the annual budget for the Roadmap.

Section 9. Implementing Rules. The PCA may issue such implementing rules and regulations as may be necessary to ensure the fulfillment of its mandate and the purposes of this Order.

To ensure the implementation, coordination, and integration of national efforts and programs towards the total development of the coconut industry for the ultimate benefit of the coconut farmers, the PCA, in carrying out its responsibilities, shall conduct consultations with the coconut farmers, farm workers and other key stakeholders. Government agencies shall extend such assistance to the PCA as may be necessary for the successful implementation of this Order.

Section 10. Separability. If any provision of this Order is declared invalid or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.

Section 11. Repeal. All other orders, rules, regulations and issuances or parts thereof which are inconsistent with this Order are hereby repealed or modified accordingly.

Section 12. Effectivity. This Order shall take effect immediately upon its publication in a newspaper of general circulation.

DONE, in the City of Manila, this 18th day of March, in the year of our Lord Two Thousand and Fifteen.

(Sgd.) BENIGNO S. AQUINO III

By the President:

(Sgd.) PAQUITO N. OCHOA, JR.
Executive Secretary